WiMAX Adoption in Rural Areas

Charles A. (Chip) SpannWireless Business Analyst

cspann@connectednation.orgwww.connectednation.org

WiMAX: What Is It?

• Worldwide Interoperability for Microwave Access

• 3G wireless service – based on 802.16 standards which include both fixed and mobile capabilities

• Common misnomer: “WiFi on steroids”

• Ideally suited for most rural deployments

WiMax Adoption in Rural AmericaPros and Cons

Pros:• Cost effective “last mile” solution• Single base station can cover large areas• They make great WiMAX “laboratories”• Equipment is also available for unlicensed bands

Cons:• Limited vertical assets (elevated water tanks, etc.)• Many small towns are in mountainous areas (WV, KY, AR)• Excessive windshield time when encountering truck rolls

The “Visible” WiMAX Operators

WiMAX: Ecosystem at a Glance

Spectrum & Amount

Allocation Who Has It? Pros Cons

2.5-2.6 GHz

(196 MHz available)

2495-2690 MHz Clearwire

Xanadoo

DigitalBridge Communications

A few rural operators (e.g. Evertek, MVTV Wireless etc.)

Substantially unused

Primary WiMAX band in US

Commercial equipment available – operational WiMAX and pre-WiMAX systems

Re-banded to improve broadband and create mobility

Two thirds of the spectrum is allocated to educational entities and “not-for-profit” license holders

Bifurcated GSA areas create some unusual market “patterns”

AWS

(90 MHz available)

1710-1755 MHz

2110-2155 MHz

Verizon

T-Mobile

Cavalier Wireless

Relatively untouched spectrum

Rules written for broadband & mobility

Requires significant band-clearing Spectrum was more expensive to purchase than BRS but substantially cheaper than leasing EBS

700 MHz

(108 MHz available)

698-806 MHz AT&TVerizonCox WirelessAccess Spectrum Cavalier WirelessCenturyTel

Rules permit TDD or FDD

Flexible use

Superior propagation characteristics compared to higher frequencies equals lower cost to deployments

Incumbent TV station licensees have until February 2009 to vacate spectrum

60 MHz auctioned in 2007

2.3 GHz

(30 MHz available)

2305-2320 MHz

2345-2360 MHz

Bell SouthNextWaveComcastAT&TVerizon

Supports TDD and FDD

Secondary WiMAX band in US

Commercial equipment available – AT&T conducting BETA in 10 markets

Substantial interference issues with SDARS

Significant OOBE limits

Build-out deadline extended

Coveted Spectrum

Where’s the “Beach Front” Spectrum?

Who’s On First?

1. 1st “known” mobile WiMAX system launched by AT&T in Pahrump, NV using WCS spectrum – Nov. 2006

2. AT&T soft launches additional markets (Juneau, AK) – Aug. 2007

3. 1st “claimed” mobile WiMAX system launched by Digital Bridge Communications in Jackson Hole, WY using BRS/EBS spectrum – July 2008

4. Large scale launch announced by Sprint (Xohm) in Baltimore, MD using BRS/EBS spectrum – Sept. 2008

5. Clearwire launches 54 “pre-WiMax” markets, acquires almost everyone, sets stage for national deployment.

BRS Spectrum: What Took So Long To Launch?

1990 – 2000: Addition of PSAs, Digital and Two Rules

2001: Mobility allocation

2004: Cellular ability

2005: Transition mandate

De Facto Lease Agreements

2006: Transitions commence

BRS History at a Glance: Key Drivers

1997: BellSouth enters market

1999: Sprint and Worldcom enter market

2003: Nucentrix & Worldcom bankruptcies (Sprint allows leases to lapse,

2006 BellSouth does same)

2004: Clearwire enters the market

2004: Nextel acquires assets from Nucentrix & Worldcom bankruptcies for

$200 million

2004: Operators begin paying licensees based on spectrum values – not

per subscriber/per channel or gross recurring revenue

2005: Sprint/Nextel merger

2006: BellSouth – AT&T merger approved with divestiture condition

BRS History at a Glance:Key Drivers (cont.)

2006: Intel and Motorola invest $1B in Clearwire

2006: Sprint and Clearwire push WiMAX standards

2006: Spectrum transitions commence

2006: AWS auction price per MHz/POP

2006: BellSouth – AT&T merger with divestiture condition

2007: 700 MHz auction

2007: Clearwire acquires BRS/EBS from BellSouth

2008: Clearwire and Sprint/Nextel merge wireless portfolio to create “New Clearwire” – $3.2 billion invested from “partners”

WiMAX: Players to Watch

Vendors: Vecima, Alvarion, Redline, Motorola, Intel

Operators: New Clearwire, DigitalBridge and . . .

just about any rural WISP withan entrepreneurial spirit!