The Clear Significance of Being in Play

With the resignation of Craig McCaw from Clearwire’s board, the future of Clearwire is going to be settled in the near future. 

“The game is afoot” is the famous quote from Shakespeare’s Henry the Fifth and Doyle’s Sherlock Holmes.  It has double meanings that are rich in context for what is going on at Clearwire.

First of all, the question of Clearwire being hunted “game” is appropriate.  Clearwire has more spectrum in it than any other carrier and would be a great target for all the players.  Even Verizon Wireless and AT&T which have the 700 MHZ channels would benefit from the addition of the spectrum, but the more logical choice is T-Mobile.

However, if we choose to dream, we can throw some other players in the mix that make a good case.  For example, Microsoft has the Redmond location and is not particularly finding the wireless world as friendly as they would like. In many ways the Clearwire model is truly an Internet model and the use of their existing services would be well aligned with other strategies.  However, it’s hard for Microsoft to get ahead of these kinds of opportunities quickly, so it probably is only a dream.

Existing investor Google could continue to save the day, but it seems to be an idea that is past its prime.  When Google joined the Clearwire investors, members were looking to break out into wireless- and from the walled garden it did not look like a back gate was available.  Now Apple & Android has leveled at least two sides of the walled garden and it’s hard to see a rationale that makes sense from a pure wireless play.

However, the case for Clearwire can be made as an alternate delivery for fixed wireless and from that perspective that Google has ample reason to invest. Clearwire could be the glue that connects up their adventures in SuperWiFi / White Space including the use of their spectrum database to support wholesale services.

This is the second meaning of the word game as in the business model of wholesale.

The wholesale model itself is being called to question for wireless.  Sprint and the cable operators all have been using the Clearwire roll-outs to augment their strategies, but the reality is the marketing has never made a great deal of difference in catching the consumer’s attention.  This has implications for not only the existing Clearwire crowd, but the LightSquared investors as well.

If you recall Reed Hundt had tried to form a coalition of the willing for the D block of 700 MHz, but without much interest.

Wholesale are fun stories to cover, the realm of possibilities make for utopian dreams, but the reality is new entrants in the access space need to show they are survivable. 

The sad reality is that when new entrants fail they have implications for all the smaller players.

For that reason, I see the probable outcome is that Clearwire becomes part of Sprint again.