This page is an archive from our previous website. Please check out our new website where you can read new COMMENTARY eNewsletters, TELL IT LIKE IT IS blog posts or Press Releases.
The one really true statement in this entire press release is that consumers are voting with their dollars as they choose to purchase Internet-enabled devices

Wanted: Truth In Advertising

Thursday, February 19, 2009

It amazes me still how creative some people can get with a press release! After Verizon announced it was moving ahead quickly with LTE (Long Term Evolution), which might be referred to as 4th-generation technology, the PR company representing Clearwire had to take its shot. I would not have minded so much except that it was short on facts and long on hype, typical of SOME of the WiMAX community for a long time now.


Let's start at the very beginning of the press release. The first paragraph says, "Verizon's 4G deployment plans are a testament to the fact that the existing 3G networks simply won't support a rich 'true broadband' experience. The Internet has become an indispensable part of our lives, and consumers want to access it wherever they are - not just at home or in the office. Clearly, having more operators espousing the benefits of 4G can only serve to increase consumer awareness and demand for better services. This is a great place for Clearwire to be."


I have a number of problems with this statement, the first of which is that according to the International Telecommunications Union (ITU), this current flavor of WiMAX mobile is a 3G technology, not a 4G technology. But the biggest problem I have with it is that the Baltimore Clear system (launched as Xohm by Sprint), provides data rates (published) of 2-4 Mbps down to the devices and 1-1.2 Mbps up from the devices-and  that is using cell sites with 30 MHz of spectrum! The Baltimore system, when it was turned on, had 170 cell sites, each using 10 MHz of spectrum per cell sector for a total of 30 MHz per cell site. Its spectrum reuse, I was told, was 3:1, which means that each group of 3 cell sites uses a total of 90 MHz of spectrum. Yet Clearwire is only providing 2-4 Mbps down to devices? This is nowhere near 4G data speeds by anyone's estimates.


Next it says that 3G networks simply won't support a rich "true broadband" experience. I guess its 2-4 Mbps down and 1-1.2 Mbps up does provide a true broadband experience? As I sit writing this, my DSL connection is running 2.86 Mbps down and 786 Mbps up, and my Verizon EV-DO Rev A is running 2.3 Mbps down and 786 Mbps up. And, I might add, the Verizon EV-DO Rev A data rate is using 1.25 MHz of spectrum, NOT 10 MHz.  


The very next paragraph states, "Not all 4G networks are created equal. Differences in spectrum holdings and underlying network architecture will deliver different user experiences. Today, Clearwire customers experience better speeds and bandwidth than what is being described as next year's LTE networks. Clearwire continues to move full speed ahead with plans to introduce new mobile WiMAX markets, services and devices this year." I guess Clearwire has a point here, it is burning 30 MHz of spectrum where EV-DO uses 1.25 MHz and UMTS/HSPA with similar or higher data rates is using 5 MHz. Though to be absolutely accurate, since EV-DO and HSPA use different uplink and downlink spectrum, the comparison should be 2.5 MHz (1.25 MHz x2) for EV-DO and the HSPA spectrum should be shown as 10 MHz (5 MHz x2). However, HSPA has already achieved data speeds of more than 3 times what Clearwire is providing in Baltimore. Verizon's LTE nationwide network will be running in at least 12 MHz (6 MHz x2) and in many areas double that amount of spectrum. If you plotted today's WiMAX mobile technology in 12 MHz of spectrum against LTE in 12 MHz of spectrum, you would find there is a huge difference in favor of LTE.


What galls me the most about this particular release is that there are a number of good, honest WiMAX vendors out there selling systems on a worldwide basis and doing well, especially in underdeveloped countries or regions, by being honest and demonstrating the true capabilities of WiMAX. Unfortunately, they are being tainted with this type of press raising expectations well beyond what is real.  WiMAX works, we all know that. So do EV-DO and HSPA, and the tests for LTE are going well. But WiMAX is certainly not head and shoulders above any other radio technology that is available. WiMAX operators might have more spectrum in which to build their systems than those who will be building LTE, but it isn't only how much spectrum you have that is important, it is also how efficiently you use that spectrum.


In the United States, WiMAX is deployed in islands, not to a nationwide footprint. If you have been smart enough to buy a dual-mode device for when you are out of WiMAX coverage so you fall back to Sprint's EV-DO Rev A network, I doubt very much that you will notice any difference in performance. When LTE does go commercial, you will fall back to EV-DO or HSPA until the networks are built out, but you will also have devices that support  2G, 3G, and LTE, which will give you a real coverage advantage.


Next up, the same press release states, "Just last week, the WiMAX forum announced that WiMAX service providers now cover - that means they have signal reach - out to 430 million people globally and the WiMAX forum will announce that the service provider members believe they are on path to double that number of 430 million people by the end of 2010, to having 800 million people covered by these next generation WiMAX networks. Over 450 service providers now have active trials and deployments for fixed, portable, and mobile use. In addition, the technology keeps moving ahead: the IEEE is on track to approve 802.16M, the next generation WiMAX technology, which will maintain WiMAX's position as the fastest fourth generation technology." To which I say congratulations, that is a great start. The real question is how many of these people have a choice between WiMAX, commercial HSPA, and/or EV-DO systems? Of those who have a choice, how many will opt for WiMAX rather than one of the others? Time will tell, but today, the "other technologies" are serving more than three billion customers-actual subscribers, not just population covered.


Finally it states, "And let's not forget consumers who have demonstrated an appetite for connected electronics, even in this economy. They are voting with their dollars as they choose to purchase Internet enabled devices. ABI Research has announced that the market for netbooks should hit 35 million during 2009." And so I ask exactly how many of them will be used on WiMAX systems with the addition of a USB modem and how many will have WiMAX built in? How many will have EV-DO and/or HSPA built in?


The one really true statement in this entire press release is that consumers are voting with their dollars as they choose to purchase Internet-enabled devices. And that is, after all, the way it should be. Consumers should be given the facts, try out what is available, and vote with their wallets. Such is the marketplace of life. Perhaps is it time to go back to truth in advertising and let customers sample the wares and make up their own minds.


I don't understand why a company such as Clearwire believes that slamming existing 3G technologies and making claims it cannot back up about WiMAX versus LTE makes sense. You might remember in August of 1981 when IBM first entered the PC market. Apple took out a full-page ad in most of the newspapers around the United States welcoming IBM to the industry-and then fought it out in the marketplace. What a refreshing idea!


Andrew M. Seybold

COMMENTS: This is an archived post. Commenting is no longer available.

Martyn Roetter - 02/19/2009 13:59:00

I agree. i wonder whether this particularly egregious example of "misstatements" in advertising is fueled (a well established principle is that by repeating a nonsensical claim often and loud enough you may be able to fool enough of the people enough of the time) by the impact of the recession upon Clearwire's already uphill battle to win enough customers to achieve a return on its investment and attract more capital. After all if a customer of , say Verizon decides to postpone acquiring a new handset, he/she will still generate revenues for Verizon, while a non-customer of Clearwire concerned about his/her own finances will probably be more likely not to switch (maybe moving to a lower priced plan with an existing provider),unless the WiMax operator has a truly compelling offer, and will therefore remain a source of zero revenue for Clearwire. I add that I also find Intel's continuing WiMax propaganda , globally as well as in the U.S., to be as deceptive as Clearwire's with the risk of additional potential harm if this powerful and widely admired company inspires some regulators with few resources and little experience to take decisions about spectrum and technologies that are not in the best interests of customers in their jurisdictions.

Andrew Seybold - 02/19/2009 14:41:45

Martyn-thanks for the comment and all I can do is agree with you, and your point about Intel is also well taken. It is a shame because I talk to some of the WiMAX equipment vendors and they are tired of having to be the ones to bring things back to reality for their potential customers--there are still benifits to WiMAX it just isn't the black magic some people say it is.

Nick Ruark - 02/19/2009 15:34:31

Kinda/sorta the same type of PR "snow" that our friends at Nextel - Reston excelled at with their also egoistic and egregious "how business got done" propaganda in the LMR/SMR marketplace a few years back....seems like the folks at Clearwire et all have picked up where Nextel left off and are taking things to next level. Unfortunately, as someone once said, "there's a sucker born every minute". Fortunately, someone else came up with "let the buyer beware". Too bad most folks don't.