A question: what really is the market opportunity for WiMAX in the U.S. market? To figure that out, I think you'd have to interpret what Sprint Nextel and Clearwire have been doing and saying, then adjust for the likely changes as Clearwire assumes management control of a revamped company that includes both the Clearwire and Sprint Nextel assets.

 

To review, Clearwire — up to this point — -has been a DSL or cable modem alternative, with some incremental VoIP services on top. Sprint executives have had a different vision: an open, broadband mobile version of the Internet.

 

Going forward, what has Clearwire's CEO designate, Ben Wolff, said? Clearwire will provide fixed and mobile broadband; fixed and mobile voice. That sounds like a "take market share from the existing wired and wireline providers" strategy. There's nothing wrong with that, but it makes a fourth generation network an alternative to 3G mobile or fixed line high-speed Internet access, with more bandwidth.

 

The danger there is that the incumbents will keep ratcheting up their own bandwidth to match, piling on new services, bundling and offering longer-term contracts to protect their base, which is Clearwire's potential share-stealing target.

 

Those of you who have been in the business long enough have seen this before and can predict the likely response. To take share, the easiest value proposition is "same or better product, but lower price."

 

The mobile voice part of the offer might take a bit longer to finalize, so the initial going will be "same as DSL and cable modem but faster and cheaper." And the cable company partners won't want to cannibalize their existing cable modem base, so there will be some owner conflict about pricing and packaging, almost from the inception.

 

Not to mention that Sprint will want to keep growing its 3G mobile broadband and data card business as well.

 

It's a classic problem. To win massive new investor resources, a contestant has to promise something very different from the service it seeks to supersede. So Sprint's language has been about mobile Internet, open and more flexible, not a replacement for current mobile services. Certainly that is Google's interest, and Google is a financial participant in Clearwire.

 

In practice, what one tends to see is that, after the money has been raised, contestants diligently attack the low-hanging fruit. In this case, that will be DSL and cable modem services. That doesn't mean the competition will stay at that level. Over time, the positioning can change.

 

In the early going, it really will be fixed broadband and fixed voice that offer the immediate upside. But then you run into partner conflict. Cable companies sell fixed voice, successfully, over their wired networks and won't be happy to cannibalize that revenue stream, either.

 

Clearwire's immediate problem will be that it starts to sound like "more of the same." Maybe it is cheaper or faster. But the value proposition won't be so distinct.