Media excitement about recent iterations of allegedly “4G” networks aside, no currently available wireless broadband service will replace the need for traditional wired broadband so long as providers limit consumption to 5GB (or less) per month.

As average consumption per household is now at least three times that level, wireless broadband customers will be faced with three choices:

1. Supplement a wireless broadband account with an unlimited, wired broadband service;
2. Be prepared to pay overlimit fees or purchase additional accounts or “usage packs;”
3. Reduce usage to remain within plan limits.

Sprint currently remains the largest carrier offering unlimited access to its 4G network, also sold independently under the Clearwire brand.  But as Clear subscribers found out, “unlimited” comes with “unlimited hassles” if Clear’s “intelligent network management” software catches you using it “too much.”  Speeds are quickly throttled downwards, well below even Sprint’s slower 3G network.

Many of Clear’s customers signed up in response to ads promising the 4G wireless service as a “home broadband replacement.”  Ditch your cable modem or DSL service for a wireless alternative!  Some salespeople even dared to suggest Clear was faster than cable or DSL.  Only for most it is not.

Every carrier has their own version of “4G” here or on the way, most of which can deliver better and faster service than the 3G alternative, but wireless providers are hellbent on ensuring customers never get used to the concept of truly unlimited service.

Glenn Britt, CEO of Time Warner Cable, admits the wired broadband industry erred when it got people used to all-you-can-use broadband.

“We made a mistake early on by not defining our business based on the consumption dimension,” Britt told investors back in 2009 when the company was contemplating its own metered usage trials.

4G networks can bring out the "data hog" in everyone if you actually take advantage of the faster speeds to stream multimedia.

Wireless providers are working hard not to repeat that mistake.

AT&T found usage caps anger customers, but got away with implementing a 2GB monthly wireless usage cap tied with the introduction of the wildly popular newest iPhone (and helped by grandfathering existing unlimited customers until their next phone upgrade.)

“If I had a baby in my hand and my iPhone and I had to drop one, I’d drop the baby,” laughed Dallas iPhone owner Luisa Benton.  But Benton’s love for her Apple phone does not extend to AT&T’s network, noting she has dropped calls and had poor reception in certain areas.

Many iPhone owners retain their cable or DSL broadband service because AT&T’s wireless usage cap limits what they can manage online, and the company’s network problems only adds insult to pocketbook injury.  With many locked into two year contracts, few are going to brave early termination fees to find an alternative.

As providers upgrade their networks, they are also upgrading their prices.  Verizon’s new LTE network, for example, carries a premium price tag for those wishing to use it.

Customers looking for a faster wireless experience will pay $50 for 5 GB or $80 for 10 GB of data on Verizon’s new network.  Run over those limits and an overlimit fee of $10 per gigabyte kicks in.

“People are never going to use wireless networks the way you see them on the commercials,” writes Stop the Cap! reader Jo-Anne in Seattle.  “They are always watching movies or TV shows — services you absolutely don’t want to risk at those prices.”

J0-Anne asked a Verizon representative if new 4G smartphones would be permitted to use unlimited data plans.

“‘Don’t bet on it,’ was the reply I got — Verizon may keep unlimited around for 3G network users only,” she said.

If true, Verizon will deliver overpriced, inadequate service for any customer looking to leave their home broadband account behind.  As soon as multimedia gets involved, usage caps rapidly become a dealbreaker.

Verizon recently contracted with Bridgewater Systems Corporation to supply it with data management software.  Bridgewater is also a major supplier of network throttling solutions to ferret out heavy users and impede their speed, as part of “fair use policy” regimes.

Some wireless companies are trying to have their cake and eat it too — selling “unlimited” wireless broadband service hampered by an aggressive “policy control” network management scheme.  You’ve seen the ads promising unlimited access, but probably missed the fine print warning the provider will throttle your wireless broadband speed to something comparable to dial-up once they deem you a data hog.

Cricket and Clear are both notorious for throttling customer speeds and delivering disclosures of the practice more impenetrable than North Korea.

A Clear blog entry tried to simplify the legalese:

During times of high network utilization our network management system may limit speeds, but we never limit the amount of data a customer with an unlimited data plan may use. The algorithm in place reviews several factors including long and short-term usage, current network capacity, and network demand to determine if network management needs to be applied.

The end result is that a few heavy users temporarily give up some speed during limited times of high demand so that everyone can have a good experience. A majority of customers are having a positive experience and experiencing faster speeds during times of greatest demand since these enhancements were enacted.

The “positive experience” Clear’s blogger reports may be wishful thinking, however, after reading the company’s support forums.  They’re overloaded with thousands of angry customers and probably many more ex-customers.  An “unlimited” broadband experience is meaningless if customers endure speeds well below the minimum acceptable definition of “broadband,” often for days on end.

Cricket is no better:

Cricket sets usage levels on the amount of data a customer can upload and download within stated periods of time. If you exceed your rate plan usage levels, Cricket will temporarily reduce the speed at which you can send and receive data over the Cricket network. You will still be able to use the service but your speed will be slower. Cricket may use other traffic management and prioritization tools to help ensure equitable access to the Cricket network for all customers. Your service speed is not guaranteed and is subject to this Fair Use Policy.

Cricket has set a data usage level (“Usage Level”) per customer. As shown in your rate plan brochure or on www.mycricket.com, this Usage Level varies based on the rate plan you’ve selected. Every day, we measure your upload and download data usage (“Actual Usage”) to determine if your total Actual Usage, as aggregated over your bill cycle (“Usage Total”), exceeds the Usage Level for the rate plan you selected. During hours of operation, you can inquire about your Usage Total versus your monthly Usage Level by calling 1-800-Cricket and speaking with a Care representative.

Once you begin a new bill cycle your rate plan Usage Level upload and download speeds will be restored.

The average Cricket customer is unlikely to grasp anything beyond the fact their speed sucks if they are targeted by Cricket’s throttle.  It’s not as simple as breaking through your monthly usage allowance.  Cricket can and does throttle customers who seem like they could exceed the limit, based on their daily account activity.

In the end, most wireless customers pay more for less service.  The primary benefit is portability, and carriers consider that worth the premium prices charged.  But as the Internet’s love affair with all things multimedia continues, none of these providers will provide a suitable alternative to the traditional home-wired broadband account.

Last year like this year, WFAA-TV in Dallas reports frustrations continue with AT&T’s wireless data network.  The company’s response?  Limit customers’ use of it and push more of them off to Wi-Fi alternatives.  (2 minutes)

Clearwire’s often-unclear “network management” policies are the subject of a lawsuit filed yesterday in Seattle seeking class action status.

Angelo Dennings vs. Clearwire Corporation was filed in the Western District of Washington federal court, and seeks refunds for consumers who were mislead by the company’s failure to disclose its network speed throttling and usage limitations, and charged early termination fees when subsequently canceling service.

Clearwire promises that its high-speed Internet service provides a “fast” and “always on, always secure” Internet connection allowing users to “[d]ownload pictures, music and videos.” But Clearwire does not provide an “always on,” “high-speed” connection as it promises. Clearwire purposefully slows the connection of its users because it cannot accommodate the high volume of traffic. Clearwire engages in a practice known as “throttling,” which is the intentional delay and/or blocking of Internet communications. This practice deprives Clearwire customers of the ability to “[d]ownload music and videos,” and leads to slow connection speeds.  Clearwire engages in throttling at times when demand for Internet use is highest, beginning at approximately 7:30 p.m. and ending at about 1:00-to-2:00 a.m.

If users attempt to cancel their service, Clearwire claims that, pursuant to its “contract” with them, it is entitled to collect an early termination or a re-stocking fee. The “contract” referred to by Clearwire is not a contract between it and its customers. The contract between Clearwire and its customers is simply that the customers will pay for, and Clearwire will provide, “unlimited” Internet usage at certain speeds, depending on the speed and payment plan selected in Clearwire’s stores, kiosks, or online.

The remaining “terms” invoked by Clearwire at its convenience are embedded in a document that consumers never see prior to subscribing to Clearwire’s service. Clearwire sells its services in its stores, kiosks at shopping centers, and online. Clearwire’s stores and kiosks do not have copies of this “contract” on hand for potential subscribers to read before they “agree” to its terms. Users who subscribe through Clearwire’s website never see the contract either because the link to it is at the bottom of a page, in substantially smaller font and lighter shade than all of the other text on the page. The text states: “Want to read the fine print (and who doesn’t read the fine print?) It’s all there in the CLEAR Legal Index.” No one wants to read fine print legalese and almost no one does. The statement is obviously and sharply ironic, and mocks anyone who may have been fussy enough to have considered continuing.

Despite not showing its terms to consumers, Clearwire refuses to allow users to cancel their service without paying the unconscionable fees it claims it is owed under this “contract.” These fees include an early termination fee (“ETF”), which penalizes consumers that want out before the end of the two-year term. Although Clearwire breached its contract with its customers, Clearwire insists on the payment of this ETF when customers realize they are not getting what they bargained for.

The suit argues that Clearwire has oversold its wireless broadband network, and allegedly quotes a company representative at one point telling Dennings, “Clearwire had signed up more customers than its cell towers could accommodate, and that therefore it was ‘managing’ users’ accounts.”

Attorney Clifford Cantor argues in the filing that Clearwire reduces customer speeds to 300kbps or lower when their network is congested, making the service unsuitable for most broadband applications.  Dennings, who lives near Ft. Worth, Tex., was outraged to learn Clear sold him a home and mobile broadband account that was advertised as a replacement for wired cable or DSL broadband, but was left with service he considered largely useless when throttled.  Even more upsetting, the suit alleges, Denning was asked to pay a $219 early contract termination and restocking fee when he tried to cancel service over the matter.

Cantor is asking for a court ruling declaring Clear’s policies to be unconscionable, attorneys’ fees of at least $5,000, and refunds for all impacted subscribers.

Thanks to Stop the Cap! reader Michael in Chicago for sending along a copy of the lawsuit.  He runs the “Clear/Clearwire internet not as advertised” Facebook group.

A Facebook group has been established to oppose Clear's Internet Overcharging schemes

The clock may be running out on Clearwire, America’s “4G-WiMax” wireless broadband provider controlled by Sprint, with close investment ties to Comcast and Time Warner Cable, who both resell Clear wireless broadband under their own brands.

At issue is money — the lack of it, and the wireless company’s cash on hand has grown so perilously low, Clearwire was forced to admit to its investors it may not survive beyond the first half of next year:

Based on our current projections, we do not expect our available cash and short-term investments as of September 30, 2010 to be sufficient to cover our estimated liquidity needs for the next 12 months. We also do not expect our operations to generate positive cash flows during the next 12 months. Without additional financing sources, we forecast that our cash and short-term investments would be depleted as early as the middle of 2011.

The Securities and Exchange Commission rules governing public companies represent a public relations nightmare for anyone trying to put a positive spin on bad news, and Sprint chief Dan Hesse desperately tried to make lemonade out of the financial lemon Clearwire increasingly represents for the wireless company.

“If you get to the point where you don’t have 12 months of cash in the till, even if you’ve got negotiations going on, or what have you, you have to, from an accounting perspective, say you have a going-concern issue,” Hesse said. “That doesn’t mean that Sprint and other partners won’t continue to fund Clearwire.”

With Sprint’s 54 percent stake in Clearwire defining the entity as a subsidiary of Sprint, its demise could risk Sprint’s own financial well-being, something Sprint plans to address in 2011, potentially ending its majority stake in the company.

For Hesse and his cable partners, Clearwire’s financial problems are being spun as a result of the venture’s success.  The company says it cannot afford the rapid expansion it has undertaken to expand its WiMax network into additional cities across the country, and faces serious financial challenges from the subsidies consumers demand when buying smartphones.

Hesse particularly complains about the latest whiz-bang smartphones consumers demand, many costing upwards of $600.  Consumers in the United States don’t pay full retail price.  In return for two year contracts carrying steep cancellation penalties, carriers cut the price of most high end phones to $200 or less.

“Subsidies are going through the roof in our industry,” Hesse said. Nearly 40 percent of Sprint customers use the company’s 4G network, and that number is rising.

Revenues are up 114 percent from a year earlier to US$147 million. But Clearwire’s losses for the last quarter alone amounted to $139 million, or $0.58 per share.

As a result, Clearwire slashed 15 percent of its staff, laying off nearly 600 employees and has indefinitely suspended its expansion plans to bring the network to additional cities.  Clearwire will also shutter many of its planned retail outlets — some already built — and delay the introduction of its own branded smartphone.

But even that may not be enough.

Although Clearwire’s growth has been double the level anticipated, achieving a net gain of 1.23 million subscribers in the third quarter — reaching 2.84 million total subscribers, not all of those customers are sticking around once they begin using the service.

Complaints about the company’s poorly disclosed speed throttling continue to be a regular topic on Clear’s support forums.  At least 1,000 complaints have been logged on Clear’s own support forums and elsewhere online about the speed traps.  A Facebook group opposing the schemes has also been established.

Stop the Cap! filed a formal complaint with the New York Attorney General’s office accusing the company of false and misleading advertising and fraud for claiming customers would enjoy “blazing fast speeds” with no limits or speed throttling, despite the fact company officials later admitted they were throttling customers deemed to be “using the service excessively.”  Dozens of additional complaints from Clearwire customers have been filed with state Attorneys General across the country, as well as with the Federal Trade Commission in Washington.

Just how much is too much has never been made clear by the company, but many users report the speed throttle reduces speeds to 250kbps, often for hours at a time.

Clearwire told Electronista:

Throtting is based on the current utilization for each cell tower, and many low-use towers do not throttle speeds at all. For high-use towers, throttling occurs during peak-use times.

A customer’s maximum speed is based on the number of gigabytes of data transferred in the past seven days and the download speeds for the past 15 minutes. Speeds are recalculated every 15 minutes, at which point a throttled customer will be bumped up to a higher speed. Rather than implementing one speed for throttling, the calculations will move customers between 48 different speed brackets.

The worst offenders using peer-to-peer software on Clearwire’s network may face repeated throttling.

Clearwire advertises a faster Internet experience for their 4G service, but many report they receive speeds far slower, even if they have engaged in very little usage.

Many consumers are also unknowingly finding themselves back on Clear’s network even though they signed up with a third party provider.  Clear resells access to its network under a variety of different brands not limited to Sprint, Road Runner Mobile, Comcast Internet2Go, and Best Buy Mobile/Wireless.

This Clearwire customer visits a Clear hotspot location and discovers even on a Wi-Fi network, Clear’s speeds don’t match their advertising claims.  Then, he discovers just how sneaky Clearwire gets in disclosing important information about the company’s wireless speeds customers might want to know before signing up.  (5 minutes)

Stop the Cap! reader Kevin dropped us a note again this evening to let us know Clear users are still being throttled even without running peer-to-peer software, and that those throttled experiences run into days, not the 15-minute increments a company official claimed yesterday.  Perhaps Clear’s definition of “minutes” differs from the acceptable norm.  Regardless of the reason, it’s an unpleasant experience at best to pay a generous fee every month for service that effectively tops out at 250kbps (that’s 0.250Mbps) when the punishment throttle is active.

But even more ironic, Clear’s annoyance with a purported flood of customers running peer-to-peer applications on their network could have been tempered had the company avoided advertising the service in 2009 on the very notorious Pirate Bay:

Ahoy mateys: Clear's 2009 advertisement on The Pirate Bay, as captured by one of our readers. (click to enlarge)

Although we enjoy the irony ourselves, it is fair to mention Clear probably didn’t intentionally target the world’s largest torrent tracker website, but was instead mass advertising on a range of websites targeting users thought to be “early adopters.”  But every advertising network we’re aware of allows advertisers to opt-out of specific websites, and Clear hadn’t bothered when our reader captured this image.

That makes Clear’s apparent battle with peer to peer traffic partly one of their own making.

Clear made itself unclear about its speed throttle.

Clear, the 4G wireless broadband service backed by Sprint, Comcast, and Time Warner Cable is under fire for selling customers an unlimited use/”no speed limit” service plan that is heavily throttled to as low as 250kbps once customers are deemed “heavy users” by the provider.

Stop the Cap! reader Kevin in Rochester dropped us a note to share his frustration at Clear’s bait and switch marketing that promises one thing and delivers another.

It’s becoming common knowledge – but not common enough – that Clear is throttling their in-home broadband subscribers. For $30 a month, Clear delivers “unlimited 3Mbps” download speed, but after 8-10GB of usage in a month, they cut your speed to 250kbps as a punishment.

Scores of customers share Kevin’s problems, with complaints pouring in on broadband forums and on Clear’s customer support website (which crashed earlier today).  It is not known whether these usage limitations are also imposed on Comcast and Time Warner Cable’s branded 4G wireless services, which are also delivered by Clear’s network.

Remarkably, Clear’s website has marketed its broadband service as free from classic Internet Overcharging schemes like usage caps and speed throttles/network management:

Clear's own marketing promises unlimited usage with no speed reductions, unlike those "other" providers, which now also includes Clear itself. (Courtesy: Michael46)

Despite the marketing, Clear’s Rob Lenderman today admitted the company implemented a speed throttle system on Wednesday, Sept. 29 and placed the blame for doing so on peer-to-peer torrent traffic:

Last Wednesday we deployed a new automated algorithm that tries to even the playing field for all users. Essentially we tried to take users that were downloading large amounts of data over a week’s period of time and limit their top speeds during periods of high tower utilization. This system is based on a tower’s current utilization, GB’s downloaded in the past 7 days and current download speeds in the past 15 minutes. it recalculates your max D/L speed every 15 minutes based on these factors. All in there are 48 buckets of max D/L speeds based on these factors.

The expected results of these changes was that a small percentage of users would be slowed down for short periods of time but only during high utilization times on the tower.

Theoretically the very slow speeds would only last for 15 minutes and then readjust based on tower usage and the last 15 minutes of slower speeds.

The reality is that a very small percentage of users are being set at very low D/L speeds for hours at a time.

We are gathering more data as I write this and we are looking at adjustments to the policy so that the connection becomes more usable. Expect further details this week.

One thing I want to stress is that this algorithm does not apply to towers that have a low utilization which is a large percentage of the towers. Since high utilization is usually at night most users that are seeing slower speeds at night would see increases at other times of the day. We realize this is not ideal but using the system for large downloads outside normal usage hours(evening) will allow you to get higher speeds. This rule applies even if you are not being slowed. Fewer users = Higher speeds.

Expect more details in the next few days as we drill into the details and let you know what changes we will be making to make the experience better.

In the short term you can increase the speeds of your experience by reducing the number of GB sized downloads that take place. Our data shows that running a torrent is one of the reasons that people start to experience slower speeds.

[...]I use the word limit when talking about D/L speeds. Not in terms of amount of data you can download. I can assure you this is being handled at a very high level in the organization as some of the experiences some of you are having is not in the spirit of the program. As for using a P2P you will improve speeds if you run them at off peak hours. As tower utilization drops during those hours the algorithm will release more bandwidth and the apps will pick up speed. In addition fewer users will also yield an increase since the algorithm does not affect low utilization tower at all. So you get a double benefit from using off peak hours for large downloads.

We are looking at how to set the speed limits to ensure things like web browsing and youtube are useful even though large downloads may be limited in terms of speed during peak hours.

We are meeting every day to go over new data and determine a longer term solution instead of just throwing new solutions out there without putting some thought into them.

We apologize for this but we need to get it right and not just change for the sake of change.

RobL

Of course, customers promised repeatedly they would receive lightning-fast, unlimited wireless broadband from the company were unimpressed with the company’s argument that artificially slowing their speeds after as little as 20 minutes viewing Hulu or Netflix to 250kbps for several days qualified as ensuring the subscriber experience.  Many customers report Clear’s throttling is hardly limited only to peer to peer torrent traffic.  Online video streaming, in particular, routinely triggers the speed throttle for customers, something Lenderman admitted might be an issue:

We are looking at the impact of the new policy as we speak and will be reevaluating it shortly to determine what changes might need to be made.

The algorithm we use is complicated and is not intended to shut down users that use the service in a normal manner. It was intended to slow down usage from users that have bit torrents, etc running all day long.

For some of the customers that have complained we have researched it in detail and they were not being slowed by the algorithm. We have to make sure that everything is running properly as it makes no sense for us to limit users so much that the service becomes unusable.

We should have more info on what we plan to change in the next few days as we evaluate the data.

Clear becomes just the latest provider poster child for Net Neutrality in the United States.  While there may be reasonable capacity issues at stake on wireless networks not designed to accommodate 24/7 peer to peer traffic, throttling online video is another matter entirely — it’s one of the services Clear has promoted as possible using their higher speed network.  Artificially slowing a network the company sells as not being hampered by such traffic control measures is a classic case of false advertising.

One vocal Clear customer created this avatar

Customers have noticed and have attacked the company for dishonest business practices, bait and switch marketing, and violating their own internal policies.

Stop the Cap! has not seen any reports of company officials attempting to enforce early termination fees for those exiting contracts early.  Kevin noted his service was turned off as he was on the phone with a representative to process the disconnect request.  The representative also demanded Kevin return his modem.

Most who are dropping service are resuming service with their old providers, mostly cable broadband and telephone company DSL providers.  If online forum posts and Twitter tweets are to be believed, the company is losing hundreds of customers per day over their Internet Overcharging scheme.

Most likely, Clear has turned to vendors like Sandvine for “usage management” equipment that can automatically slow service for those who actually utilize the service they pay to receive.

“It is no longer about the broadband-connected home but about the broadband-connected individual,” said Tom Donnelly, EVP marketing and sales, Sandvine. “Service providers worldwide are looking for tools that enable their subscribers to stay within their service plans regardless of when, where or how they connect to the network.”

Sandvine’s products detect network conditions that trigger policies within the network to help service providers control subscribers’ Internet experience.  The latest version integrates with 3G and 4G networks to throttle speeds based on time of use or volume of data transferred.  A provider sets the parameters and the “network management” solution does the rest, automatically.

Stop the Cap! intends to monitor this situation carefully over the coming days to learn what the company intends to do with its network management scheme.  If they continue to use it, we will do our part and file a formal complaint against Clear with New York State Attorney General Andrew Cuomo for false advertising and misleading business practices.

It is only a matter of time before a law firm begins a class action against the company for similar reasons.  Stop the Cap! encourages Clear customers to use the company’s forum to vocally demand an end to all Internet Overcharging schemes or else you will take your business elsewhere.  You should also demand full credit for the days you experience artificially slowed speeds, and please let us know if you are asked to pay any early termination fee for exiting a Clear term contract.

Craig E. Moffett joined Sanford C. Bernstein & Co. as the Senior Analyst for U.S. Cable and Satellite Broadcasting in 2002.

Craig Moffett, a Wall Street analyst with Sanford Bernstein, is sounding the warning bells that if AT&T and Verizon assign usage caps to their forthcoming LTE wireless broadband services, they will never provide suitable competition for American consumers.

The implications of Internet Overcharging schemes in wireless broadband go well beyond the two companies’ broadband offerings.  Investors expect either AT&T or Verizon to attempt a buyout of DirecTV in the coming months, hoping to pair the satellite service with broadband packages delivered by DSL, fiber, or wireless broadband.  Because many DirecTV subscribers are located in rural areas where even DSL service is often not available, wireless broadband networks would be the most likely means of reaching customers, but not with onerous usage caps.

“If LTE networks are going to be usage-capped, then the last pretense that LTE networks can be positioned as a substitute for terrestrial broadband would seem to be gone,” Bernstein told his clients. “And if LTE can’t be offered as a replacement for wired broadband, then the notion of an out-of-region bundle of DirecTV and LTE is no more.”

Unlike earlier broadband technologies, WiMax, LTE, and other 4G broadband platforms can deliver far more data to subscribers at reduced costs.  With the increased efficiencies offered by the faster networks, carriers can provide customers with considerably more wireless broadband service, unlike heavily capped 3G networks, most of which are limited to 2-5GB of monthly usage before the penalty rates or speed throttles kick in.  While completely unlimited service is unlikely until capacity increases, there is plenty of room to allow customers to access 4G networks without thinking twice about everything they do on them.

Sprint is betting its comeback on its virtually-unlimited Clear WiMax 4G service, now becoming available in an increasing number of cities across the country.  Marketed as a replacement for wired broadband, Sprint is hoping customers will flock back to the carrier, especially if AT&T and Verizon’s 4G LTE offerings are capped.

But AT&T and Verizon have both made noises about usage capping their LTE offerings, if only to increase revenue.  These profit raising Internet Overcharging schemes come despite efforts by the Obama Administration to dramatically increase wireless spectrum available for wireless broadband services.  Dave Burstein from DSL Prime says Federal Communications Commission chairman Julius Genachowski is betting the farm on wireless broadband being the best chance for increased broadband competition.

“The heart of the U.S. broadband plan is to release more spectrum – enough for 10-20 networks like Verizon’s LTE now building – and pray that will be enough competition in five to seven years to check price increases,” Burstein writes.

Making wireless an important substitute for DSL requires raising bandwidth caps from today’s typical 5-10 gigabytes to several times as high as LTE makes the cost reasonable. If Verizon follows AT&T with an abusively low cap of 2-5 gigabytes and Sprint etc. don’t clobber them, the whole broadband plan falls apart because that’s not enough for competition in the future.

I doubt Julius understands this, because he would be doing everything in his power to avoid low caps. It’s just one more strike against “affordable” broadband, like the recent Comcast and Verizon price increases. People need to laugh out loud when Genachowski says “affordable” while tolerating continuous price increases.

Dave Burstein, DSL Prime

While wireless broadband can deliver access to many Americans who have never had broadband service before, it’s not well-positioned to compete for customers seeking to use the next generation of high bandwidth Internet applications.

None of the current wireless services are suitable for high quality video streaming of HD TV shows and movies, a crucial application for many broadband users. Burstein also notes large uploads are painfully slow on Clear’s WiMax network because of limited upstream speeds, but he expects improvements in time, assuming carriers expand with demand.  If not, as more users pile on the next generation wireless networks, their suitability for high bandwidth services becomes even more questionable.

“How much wireless could compete with landlines, especially as all cable connections are moving to 50 meg, was a crucial question for the broadband plan,” Burstein writes. “The consensus of several good engineers is that 4G competes fine with DSL if not many people expect video or other high-bandwidth apps. Wireless certainly can’t keep up if many people want to watch their TV over the net, so it’s only a partial substitute.”

As for AT&T and Verizon, Moffett suspects both may have to take a pass on DirecTV, consumed with fighting against broadband reclassification and Net Neutrality policies in Washington.  Taking on a second battle to run another dog and pony circus to gain regulatory approval for a buyout of DirecTV may be more than they’re willing to deal with at the moment.

I’d like to hear your impressions of Clear’s 4G wireless broadband service, which is also known as Road Runner Mobile in Time Warner Cable territories or Comcast High Speed 2Go where Comcast provides cable service.

I am specifically looking for speed results, coverage impressions — whether the coverage maps reflect reality or not, and what type of wireless modem you’ve chosen with the service.  Also, customer service impressions are welcomed.  Feel free to leave your comments in our comment section or use the Contact Us link above if you’d prefer to remain anonymous.  Please remember to include your city and state.

YouTube is littered with negative reviews and complaints about the service, but I’d like to hear from our readers.

Here is one annoyed customer who literally attached her USB modem to a broom handle and mounted it halfway up the side of her home and still could not connect. (Warning: Profanity) (3 minutes)

[The article was updated at 10:30am to include promotional and coverage information not available when the article was published late last night]

Clearwire today announced the launch of its 4G mobile broadband service for businesses and consumers in Rochester and Syracuse, New York.  Designed to deliver the Internet at speeds four times faster than 3G, CLEAR is priced comparably to many wireless broadband plans, but has no usage caps.

Pricing from their website offers customers stay-at-home and mobile service plans (or both).  Customers choosing month-to-month service have to buy the equipment up front, starting at $70 and pay a $35 activation fee.  Those who commit to a two-year service contract can lease the equipment for $4-6 a month and skip start-up fees.  Packages start at $40 a month for 6/1Mbps service.  At $55 a month, they take the speed limit off, providing occasional bursts of wireless speed up to 10Mbps.  Another $15 on top of that buys you nationwide 3G roaming.  Sales tax is not included.  Customers get a 14 day trial period to evaluate the service and can cancel within that window with no obligation, although our Jay Ovittore reports they’ll drag you through the cancellation process.

At $40 for unlimited use, CLEAR’s 4G service beats Cricket, which charges the same price for 3G speeds, but limits consumption to 5GB per month before they start throttling your speed to dial-up.  Other mobile broadband services typically charge up to $60 for 5GB of usage at 3G speeds.  Ironically, while 4G service from Clearwire is unlimited, the slower 3G speed service is not — there is a usage limit of 5GB per month on the 3G network, and then overlimit fees of five cents per megabyte kick in.

A statement from the company released early this morning talks up the fact CLEAR does not burden their 4G customers with Internet Overcharging schemes like other wireless broadband providers.

“Our residents now have a fast Internet connection that’s as mobile as they are,” said Jerry Brown, regional general manager for CLEAR. “And we’re thrilled to offer affordable rate plans with no limits on the amount of data customers use. No caps on usage, no penalties – our customers just use the Web as much as they want wherever they go – it’s that simple.”

Clearwire's coverage area in Rochester & Syracuse

In Rochester, CLEAR covers approximately 560 square miles and more than 600,000 people with service extending as far north as Lake Ontario, as far south as Canandaigua and Geneva (Ontario County), as far west as Spencerport, and as far east as Webster.

In Syracuse, CLEAR covers nearly 230 square miles and more than 265,000 people with service extending as far north as Brewerton, as far south as Nedrow, Auburn, and Cortland; as far west as Village Green, and as far east as Fayetteville and Manlius.

However, the company’s 4G coverage area is spotty in many areas in both cities.  Verifying coverage from their website is essential before considering CLEAR.  Anecdotal reports from some of our readers and others suggest 4G service from Clearwire is not nearly as robust as 3G service from some other providers, and dead zones and slow speeds have caused some to cancel service.  Here’s an example of their coverage in my part of the town of Brighton, just southeast of Rochester:

Clearwire's coverage of the 12 Corners/Elmwood Avenue area of Brighton, N.Y.

Some minor gaps in coverage are apparent near Commonwealth Drive, and if you were getting gas at the 12 Corners Mobil station or visiting Citizens Bank behind it, you’d be out of luck, but otherwise coverage looks fairly good to the west of Interstate 590.  However, a very strange gap pops up between Valley Road and South Grosvenor Road, also impacting a few apartment buildings at Elmwood Court Apartments, 3100 Elmwood Avenue.  That’s odd because although that part of Elmwood slopes slightly downwards, it’s still much higher than the homes on Valley Road or the apartments further back in the complex.  A major service gap opens up on Elmwood at Clovercrest Drive and extends into the very tony neighborhoods around Ambassador Drive and Clover Street.  But the country club set will do fine browsing away on the golf course at the Rochester Country Club further east.

In short, service can vary dramatically street by street, block by block, from nothing at all to full speed ahead.  Be sure to check your area before you commit to keeping the service, much less sign a two year contract for it.

For the rest of Rochester, if you live in the city or an inner-ring suburb, coverage is generally available.  Those further out in towns like Henrietta, North Chili, southern Pittsford, Honeoye Falls, Avon, Scottsville, Churchville, Brockport, Penfield and Perinton face significant gaps or no coverage at all.  Things improve dramatically in Ontario County in towns like Farmington and Victor and the cities of Canandaigua and Geneva.

For the greater Syracuse area, coverage pops up in Auburn and then disappears eastward until reaching Camillus.  Generally, coverage in Syracuse is not nearly as dense as in Rochester, with large gaps opening between suburbs and the city itself.  Mattydale is solidly covered, for instance, while Minoa isn’t.

Now that CLEAR has launched 4G service in Rochester and Syracuse, Road Runner Mobile, which is simply CLEAR rebranded as a Time Warner Cable service (they partly own Clearwire) will also soon be on the way.  Pricing in other Time Warner Cable cities wasn’t much different than from Clearwire direct, and some cable plans really push service contracts, which you really do not want on a service this new.  Do not commit to one unless you are satisfied with the service where you plan on using it.

Clearwire’s 4G Network in 2010

CLEAR 4G service is currently available in 44 markets across the United States, including: Syracuse and Rochester, N.Y.; Atlanta and Milledgeville, Ga.; Baltimore, Md.; Boise, Idaho; Chicago, Ill.; Las Vegas, Nev.; St. Louis and Kansas City, Mo.; Philadelphia, Harrisburg, Reading, Lancaster and York, Pa.; Charlotte, Raleigh, and Greensboro, NC; Honolulu and Maui, Hawaii; Seattle, Tri-Cities, Yakima and Bellingham, Wash.; Salem, Portland and Eugene, Ore.; Merced and Visalia; Calif.; Dallas/Ft. Worth, Houston, San Antonio, Austin, Abilene, Amarillo, Corpus Christi, Killeen/Temple, Lubbock, Midland/Odessa, Waco and Wichita Falls, Texas; central Washington, D.C.; Richmond, Va.; and Salt Lake City, Utah.

In the summer of 2010, CLEAR 4G will launch in Tampa, Orlando and Daytona, Fla.; Nashville, Tenn.; Modesto and Stockton, Calif.; Wilmington, Del.; and Grand Rapids, Mich. By the end of 2010, CLEAR 4G will also be available in major metropolitan areas such as New York City, Los Angeles, the San Francisco Bay Area, Boston, Denver, Minneapolis, Miami, Cincinnati, Cleveland and Pittsburgh.

You can read a company-provided tutorial about the service below the jump.

… Continue Reading

Clearwire this week changed their terms and conditions governing the use of their service.  The changes are sufficiently materially adverse that subscribers under contract should be able to cancel service, if they wish, without incurring any early termination fee.

The most prominent change is Clearwire’s ability to crack down on whatever they define “excessive usage” to be, and the redefining of ‘unlimited service’ as ‘limited and speed throttled service.’

All-New to the Clearwire Terms & Conditions:

Nature of the Service.The Service provided to you is intended for reasonable, periodic, non-continuous use by a person using a computing device, consistent with the type of use made by a typical individual consumer of our Internet services. Examples of allowed uses of our Service include web surfing, sending and receiving email, sending and receiving photographs, occasional on-line gaming, and the occasional non-continuous streaming of videos and downloading of files. Examples of uses that are not permitted include the continuous unattended streaming, downloading or uploading of videos or other files, maintaining an unattended or continuous uninterrupted connection to the Internet such as through a web camera or machine to machine connections that do not involve active participation by a person, or operating an Internet hosting service such as web hosting or gaming hosting. You may not use the Service in a manner that impairs the user experience of other users, or that otherwise impairs network performance. Both fixed wire-line Internet service and wireless Internet service have limited bandwidth capacity. Like fixed wire-line service, CLEAR’s Service can suffer from congestion and reduced performance when usage by some individuals exceeds the usage of typical individual consumers, thus having a negative impact on the entire network. This AUP is intended to ensure that the activities of a few users do not unfairly impair the activities of all users of the Service.

Clearwire’s unlimited use plans have always carried a clause giving the company the right to terminate or suspend service for exceptionally excessive usage, after several contacts with customers.  The old language:

Unlimited Use Plans. (Effective January 9, 2009)

While the determination of what constitutes excessive use depends on the amountspecific state of data you may download or upload during a monththe network at any given time, you shouldexcessive use will bethat such unlimited” plans are nevertheless subject todetermined by resource consumption and not by the provisionsuse of this AUPany particular application. What this means is that allWhen feasible, upon observation of the provisions described in this AUPan excessive use pattern, including those that describe how Clearwire may perform reasonable network management such as reducingwill attempt to contact you by e-mail at the data ratee-mail address on file or otherwise to alert you to your excessive use of bandwidth intensive users during periodsand to help determine the cause. Clearwire representatives also are available to explain the parameters of congestion, will applythis AUP and to yourhelp you avoid another excessive use incident or to upgrade you to a different class of the Service that comports with your usage. The term unlimited” means that we willIf you are unavailable or do not place a limit on how much datarespond to Clearwire’s attempt to contact you uploadregarding excessive use, or download during a monthif excessive use is ongoing or other particular periodrecurring, howeverClearwire reserves the right, it does not mean that we will not take stepsset forth in the “AUP Enforcement and Notice” provisions below, to reduce your data rate during periods of congestionact immediately and without further notice to restrict, suspend or take other actions described in this AUP whenterminate your usage is negatively impacting other subscribers to our Service.

The new language now permits the company to use “network management” techniques such as reducing your speed if they feel you are excessively using Clearwire’s “unlimited” service.  Although the new language sounds friendlier — deleting references to suspending or terminating your service — Clearwire’s Acceptable Use Policy (AUP) maintains those rights in another section.  When all is said and done, Clearwire still gets to limit your usage -and- can now also reduce your speed:

Unlimited Use Plans. (Effective November 22, 2009)

If you subscribe to a service plan that does not impose limitsWhile the determination of what constitutes excessive use depends on the amountspecific state of data you may download or upload during a monththe network at any given time, you shouldexcessive use will be aware that such “unlimited” plans are nevertheless subject todetermined by resource consumption and not by the provisionsuse of this AUPany particular application. What this means is that allWhen feasible, upon observation of the provisions described in this AUPan excessive use pattern, including those that describe how Clearwire may perform reasonable network management such as reducingwill attempt to contact you by e-mail at the data ratee-mail address on file or otherwise to alert you to your excessive use of bandwidth intensive users during periodsand to help determine the cause. Clearwire representatives also are available to explain the parameters of congestion, will applythis AUP and to yourhelp you avoid another excessive useincident or to upgrade you to a different class of the Servicethat comports with your usage. The term “unlimited” means that we willIf you are unavailable or do not place a limit on how much datarespond to Clearwire’s attempt to contact you uploadregarding excessive use, or download during a monthif excessive use is ongoing or other particular periodrecurring, howeverClearwire reserves the right, it does not mean that we will not take stepsset forth in the “AUP Enforcement and Notice” provisions below, to reduce your data rate during periods of congestionact immediately and without further notice to restrict, suspend or take other actions described in this AUP whenterminate your usage is negatively impacting other subscribers to our Service.

Clearwire (and the soon-to-be-launched Road Runner Mobile from Time Warner Cable and Comcast’s mobile broadband option) share the same Clearwire WiMax network.  As investors in Clearwire, the cable operators have won the right to rebrand the service to provide a mobile option for their broadband customers.

Customers considering signing up for service should carefully verify the terms and conditions of their contract, as well as the quality of service provided where you expect to use the service the most.  Several websites highly critical of Clearwire have been established with hundreds of upset customers who were promised broadband speeds and barely managed much more than dial-up speeds using the service.

“Clearwireblows” ran a speed test illustrating serious speed problems using Clearwire in Texas this past April.  (2 minutes)

Customers who wish to end their contract without incurring a cancellation fee can do so following this procedure:

1. Contact Clearwire in writing and inform them you are exercising your right to terminate service without charge or penalty because of materially disadvantageous changes to the Clearwire Terms and Conditions effective November 22, 2009.  Under their terms, you have a right to discontinue service in accordance with the section “Revisions: Reservation of Rights.”  Namely, “…if you do not wish to continue Service after a change that is materially disadvantageous to you, you may terminate this Agreement by providing written notice to Clearwire within twenty (20) days of the effective date of the modification.”  The link above contains contact addresses you may use.
2. Contact customer service by telephone and inform them you have followed the written cancellation procedure outlined above.
3. Be certain to insist Clearwire not charge any termination fees, and that you do not agree to pay any such fees.
4. Should you experience any difficulties, contact the Better Business Bureau as this customer did.  The BBB helped facilitate an immediate cancellation with no termination fees.

Cable operators have been looking for a way to expand their broadband service to outside the home, and Comcast, Bright House, and Time Warner Cable have found their answer: WiMax technology from Clearwire.  They’ve joined Intel and Google as minority investors, collectively owning 25% of Clearwire, after investing more than $3 billion dollars in the wireless broadband service.  What do they get for the buy-in?  The chance to market Clearwire services to their cable broadband customers for “on-the-go” broadband.

Comcast High-Speed 2go Metro service launched Tuesday in Portland, Oregon providing consumers with portable speed up to 4Mbps in Clearwire’s own 4G network service area.  Comcast customers can sign up for a promotion for $49.95 a month for one year, which includes their wired cable modem service, a Wi-Fi router, and Clearwire wireless service (regular price after the promotion is $72.95 monthly).  Customers can access the service in any Clearwire 4G service area nationwide.  Where Clearwire doesn’t offer service, customers can “roam” on Sprint’s 3G data network nationwide for an additional $20 a month more.  There are no known usage limits at this time.  Existing Comcast broadband customers in Portland can add the Clearwire-based service starting at $30 a month.

The service will work for laptops, but not mobile data devices.  Comcast’s investment in Clearwire made such a venture possible, and is expected to compete with mobile phone broadband data plans, which typically offer 5GB of service for $50 a month.

Comcast will sell service in Atlanta, Chicago and Philadelphia by the end of 2009.

While the service will be useful for Comcast customers who travel or who want more reliable, fast wireless data access, Clearwire’s ability to serve as a true competitor to Comcast, Time Warner Cable, and Bright House may be compromised by those partnerships.

Could Clearwire effectively create promotions and plans that could lead to customers cutting the cord on their cable broadband provider?  Should cable companies increase their investments and ownership interest in Clearwire, would it ultimately matter to them where you obtained service?