The FCC is seeking comments on its plan to auction AWS-3 spectrum with a mandate that the winner provide free broadband wireless coverage to 95% of the population after 10 years of winning the license. The mandate would require the licensee to set aside at least 25% of their network capacity to provide broadband service of 768K downstream (or better), free of charge. In addition, the licensee would have to filter out content that would be objectionable to children and families. This FCC Further Notice of Proposed Rulemaking focuses on AWS spectrum in the 1915-1920 MHz, 1995-2000 MHz, and 2155-2180 MHz bands.

This rulemaking looks to be a breeding ground of lawsuits, should it move forward as presently discussed. There is huge opposition on multiple fronts. Existing AWS spectrum holders, including T-mobile claim considerable interference challenges to this plan. Considering the billions T-mobile is spending on both AWS spectrum and a 3G build out, they certainly plan to be heard on this issue. Additionally, all broadband carriers (wireless or otherwise) are not exactly thrilled at the “free” service mandate associated with this auction. After all, it’s kind of hard to compete with free. A wireless 768K service certainly does not send shivers down the backs of providers of multi-megabit broadband service offerings, but it’s the precedent that is scary. A contrarian view says that such a development might actually be beneficial to broadband carriers. Consumers who choose a 768K service certainly won’t be pleased with it for long. Perhaps it will serve to whet their broadband appetites for something more robust, and lead them to better and fee based broadband services. Whatever the case, expect this issue to get a lot of opposition and a ton of debate before ever seeing the light of day.

A stated desire of regulators is to foster competition for broadband. They claim that many of their policies are created to achieve such a desired outcome. Sprint and Clearwire are exploiting this desire with regulators with their most recent regulatory filing. They are positioning WiMAX as the desired “third pipe” into the home - a broadband pipe that will compete with the other two dominant broadband pipes, DSL and cable modem. While still a concept, a wireless third pipe into the home is building momentum.

Whether it’s Sprint/Clearwire with WiMAX or Verizon/AT&T with LTE, wireless broadband technology is evolving quickly. Its ability to rival wireline broadband service is approaching – and quickly. I’ve heard the argument that wireless broadband will never really rival wireline broadband services, especially with FTTH gaining momentum. That’s certainly true. But I wonder if it misses the point. Wireless broadband won’t rival FTTH speeds, but it doesn’t have to. All it has to do is provide “enough.” When it does provide “enough,” a fair number of customers will see the same compelling convenience with wireless broadband that they saw with wireless voice. Those customers will cut the wireline broadband cord, in much the same way they cut the wireline voice cord. Will it be everyone? No. But will it be enough to create serious competitive implications. Absolutely.

AT&T is leveraging their broadband wireless capability with DSL service to provide a converged broadband to go service. Branded as AT&T Net Reach, the new $79.95/month service targets laptop carrying customers with seamless access to Wi-Fi, 3G wireless, and home DSL/Wi-Fi service. Net Reach provides a laptop broadband connection manager that automatically connects with the strongest available broadband service among AT&T's 17,0000 Wi-Fi hotspots, 3G GSM wireless network, or the customer's home broadband service (via a home wireless network). Conceivably, customers won't know (or care) which network they're connected to - they'll just be connected to broadband. Customers must opt-in to unified billing of wireline and wireless services.

The strategy makes great competitive sense. It creates competitive differentiation between AT&T and their cable competitors. It's a great example of how telecom carriers can leverage their wireless advantage. But for how long? Cable will soon catch up. Between Cablevision's (granted they don't compete directly with AT&T) pending launch of a mesh Wi-Fi network and cable's involvement in the Clearwire WiMAX joint venture, the cable industry will soon try to flex some broadband wireless muscle of their own.

Covad, a San Jose, CA based competitive services provider, announced the successful trial of WiMAX services in the San Francisco market. The trial results will lead to a commercial launch of WiMAX service later this year. Covad intends to offer a business class symmetrical 6 Mbps service, using equipment from Axxcelera. The service will initially launch in Los Angeles, Orange County and the San Francisco Bay Area.

Cablevision, a cable triple play pioneer, announced plans to launch a broadband wireless network covering their New York metro footprint within two years. The new network will be based on Wi-Fi mesh technology and will be offered at no charge to existing Cablevision customers and for a fee for non-Cablevision customers. Cablevision has about 3.3 million customers and an industry leading broadband penetration rate of 50%. This launch follows a trend by other smaller cable MSOs and broadband service providers, who see broadband wireless networks as a value add opportunity for existing customers.

This is not just about broadband Internet access though. For example, Multichannel News describes a possible scenario offered by Cisco, where “… a Wi-Fi mesh network could allow a cable operator to offer subscribers ubiquitous connectivity in a metro area for any service. For example, someone watching TV could choose to transfer the video signal to a cellular phone and walk outside if Cisco’s Cable Service Mesh is deployed in the subscriber’s neighborhood.” Applications like that could provide tangible competitive advantage. At least until Verizon integrates a similar service utilizing FiOS and LTE. With announcements like this and the recent WiMAX joint venture featuring prominent cable companies, it appears as if cable is getting their wireless mojo going.

CTIA and the wireless service providers they represent, weighed in on the wireless white space spectrum debate, and their view is squarely counter to Google’s. CTIA says wireless white space spectrum should be auctioned and licensed, not designated as unlicensed as Google advocates. Google made a lot of noise earlier this week with an ex-parte letter to the FCC, urging that white space spectrum should be unlicensed and used for wireless broadband applications. Wireless white space is spectrum allocated to television channels between 2 and 51. It’s great spectrum for broadband wireless and will come into serious play after the 2009 digital TV transition (although some of it is free now, depending on geography).

CTIA argues that licensing the spectrum is the surest way to reduce interference potential. That argument does have some validity. But it also doesn’t hurt that CTIA’s largest members are probably in the best position to win that extremely valuable spectrum at auction. If it goes unlicensed, interference issues aside, it could empower a variety of competitors for the likes of Verizon, AT&T, and Sprint, among others. Depending on your perspective, that could be good or bad. CTIA would fall in the “bad” category and hence will push hard for some form of licensing.

The 700 MHz auction ended on Tuesday after 30+ days, 261 rounds, and $19.5 billion pledged. The speculation now shifts to who won the spectrum, and what will they do with it. Industry consensus is that the auction did not produce a new nationwide competitior for wireless service, like say a Google or someone else. The usual suspects of AT&T and/or Verizon are the likely winners of the coveted C block spectrum, which conceivably could have introduced a new national player in the wireless arena. There is potential for competitors at the local level of several markets through spectrum obtained in the B blocks. As time unfolds, and the FCC reveals the results, we’ll be in a much better position to understand the competitive implications of this record breaking (in terms of dollars pledged) spectrum auction. Stay tuned.

Stelera Wireless, an Oklahoma City based wireless provider, has been approved for a $35 million RUS broadband loan. Stelera intends to use the loan proceeds to launch broadband wireless service using HSUPA technology in 55 markets. Stelera intends to target rural or “underserved” markets with populations of 20K or less. The immediate planned markets are located in Texas, Kansas, New Mexico, Colorado, New Mexico, North Dakota, South Dakota, Oregon, Washington, and Arizona. “This is only the beginning,” says Ed Evans, Stelera CEO.

Clearwire announced fourth quarter and total year 2007 results today, ending the year with 394K subscribers. Clearwire grew their subscriber base by 91% over comparable numbers from year end 2006 and added 47K subs in the fourth quarter. Clearwire is now in 50 markets (including 4 international markets) and covers 16.3 million people. Clearwire generated $151 million in revenue for all of 2007 and ended the year with a $289 million loss. They attributed the loss to expanding sales and marketing costs as they try to expand penetration in existing markets and launch new markets. They launched in Charlotte, NC and Rochester, NY during the fourth quarter. Some metrics of note include:

• ARPU for 2007 was $36.81, an increase of 5% versus the 2006 full-year ARPU of $35.06 for 2006
• Churn increased slightly in 2007 to 2.1% from 1.9% in 2006
• CAPEX was $361.9 million in 2007, versus $191.7 million in 2006
• Covered POPs increased 70% during 2007

Clearwire’s scenario garners great interest from those of us who cover the competitive landscape. They are one of the few companies who are actively executing a competitive play on a fairly nationwide scale, using pre-WiMAX (which will eventually evolve to true WiMAX). They are somewhat of an indicator of the competitive implications that WiMAX and other 4G technologies can bring to the marketplace. Clearwire is far from profitable, and its long term prospects are questionable unless they successfully negotiate a business relationship with a partner who brings nationwide scale. All the talk is that Sprint/Xohm will be that partner (with funding Intel and others). You can’t help but question whether that makes sense given Sprint’s challenges these days. Unfortunately for Clearwire, Sprint may be there only option. The same holds true for WiMAX in general, because should both Sprint and Clearwire falter, WiMAX as a viable technology in North America would be in grave danger.

DigitalBridge Communications (DBC) announced the launch of WiMAX service in Hailey, Idaho. This is DBC’s third Idaho market, which also includes Rexburg and Pocatello. DBC’s WiMAX product is branded as BridgeMAXX. DBC claims BridgeMAXX delivers download speeds of up to 3Mbps and upload speeds of up to 2Mbps. DBC says they plan to launch BridgeMAXX service in over 15 cities in early 2008, including Idaho Falls and Twin Falls, Idaho; Butte, Montana; and Jackson, Wyoming.