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Clearwire looks to white space for savings

New network approved, needs paying for

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While the white space vote might have got all the attention last week - along with that other vote - the FCC also approved the creation of "New Clearwire" and it turns out that the two votes could well prove complementary.

The vote was passed 5-0 and will allow Google and friends - including Time Warner, Comcast, and Intel - to pour their $3.2bn into the venture and take 22 per cent of the company. That leaves Clearwire shareholders with 27 per cent and Sprint Nextel with a controlling 51 per cent ownership.

But even that infusion of cash isn't going to be enough to build the 140 million points of presence New Clearwire is expected to need for national coverage. That's going to set the company back another $2.5bn at least - possibly a lot more, which explains the sudden interest in white space spectrum.

"I think that presents some interesting opportunities for us, and we'll be looking at how we might leverage it in the rural areas," said CEO Benjamin Wolff, in a conference call following the filing of Clearwire's Q3 results, as reported by Information Week. This fits in well with how Motorola sees white-space spectrum being used: medium-distance fixed connections for telco backhaul, rather than the "Wi-Fi on steroids" that some have been promoting.

Clearwire has been running fixed WiMAX services in Baltimore and has been testing mobile WiMAX in Portland. The roll-out is already knocking half a million subscribers thanks to another 8,000 signing up in the last three months - during which it managed a loss of $166m against a revenue of $60.8m.

That Portland, Oregon deployment should be demonstrating the in-building penetration of the technology, though public technical evaluations will have to wait until next year when the service goes commercial. Clearwire is operating around 2.5GHz, which has real trouble getting through walls despite the ways in which the WiMAX protocol attempts to mitigate.

Deploying a national network won't be cheap, and it's not a good time to be raising capital - but this is a long-term investment that will have to outlast the current economic strife. Intel will make sure there are plenty of WiMAX laptops knocking around, and the first WiMAX handsets are already emerging. Clearwire's problems will be building penetration and the cost of rolling out - both areas where white space could offer some relief, assuming that white-space devices end up working at all. ®

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