Rural WiMax Dreams Fade

The collapse of the Clearwire LLC (Nasdaq: CLWR) and Sprint Corp. (NYSE: S) WiMax deal has left many, many questions in its wake. One of the less explored issues was how WiMax might help bring broadband to rural areas and other parts of the U.S. where cable, cellular, and DSL operators fear to tread.

One of the early promises of WiMax was that it might make it economically viable to deploy wireless broadband services in areas where it isn't fiscally or technically feasible for other operators. Over at the Technocrat blog, one poster fumes about what the deal's dissolution will mean for broadband in the U.S.:

    It's pretty clear to me now that this is it, you either have access to broadband in the US or you don't, and won't. Forget red state or blue state, this is the true 'great divide', you get 21st century access, or last century's.

I think that's putting a little more responsibility on the Clearwire and Sprint pact than the parties ever claimed or the deal ever warranted. Certainly Clearwire has been rolling out pre-WiMax networks in smaller towns for a while now, but the agreement was supposed to help both Sprint and Clearwire set up networks in major cities, not small towns. I never got the sense from talking to Sprint that the operator was looking to address rural markets in its initial WiMax deployment through 2008.

Still, I can understand the frustration at Technocrat, WiMax was supposed to help bring broadband to the boondocks. Even if Sprint wasn't actually going to be the one to deploy it, the competition may well have encouraged AT&T Inc. (NYSE: T) to exploit some of the Southern licenses it inherited from BellSouth and opened the way for other, smaller players to get involved.

All of this now seems somewhat up in the air. The official word from Sprint is that it will still build out WiMax infrastructure and launch services in 2008, though the extent of its plans are now unknown. Many are already questioning where the money will come from. Clearwire is in a similar position. (See Sprint Reconsiders WiMax Plans.)

I think it is too early to pronounce WiMax dead in the U.S., but we could say it is now on hospital watch. There are still specialist players like dedicated enterprise WiMax service provider Towerstream Corp. (Nasdaq: TWER) working on deploying WiMax. There's no denying, however, that the drive to deliver affordable wireless broadband to everyday users in the town and country has been significantly diminished by the wheels falling off the Sprint-Clearwire deal. No matter if the vision of actual countrywide coverage was something of a pipe dream in the first place.

There are, however, some signs that much-maligned municipal WiFi mesh networks could potentially be a stop-gap broadband technology at the least. The latest report from Heavy Reading finds that the market is still growing, despite some spectacular metropolitan flameouts, and demand for the technology is actually coming from smaller cities and towns. (See Mesh on the Up & Up?)

— Dan Jones, Site Editor, Unstrung

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