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.

Leveraging their investment in Clearwire, a WiMax provider, Time Warner Cable on Monday announced it will officially launch the Time Warner Cable 4G Mobile Network in Dallas on December 1st. The first product to launch is Road Runner Mobile, which will essentially resell access to Clearwire for as low as $44.99 per month for Time Warner Cable customers. North Texas customers using the service can expect speeds up to 6Mbps.

“With Time Warner Cable’s 4G Mobile Network, we now offer the fastest mobile data service available,” said Barry Rosenblum, executive vice president of the Texas Region for Time Warner Cable. “We’re extending our reach outside of the home and giving our customers the convenience of mobility and the speed of 4G. Road Runner Mobile lets customers take their favorite Internet service wherever they go. This is an important part of our strategy to give our customers any content, on any device, anytime, anywhere.”

The launch literally echoes that planned in the Triad region of North Carolina, right down to the nearly word for word identical introductory quotes.

Customers face equipment fees, contracts typically extending two years, and usage caps on lower tier service.  Actual speeds vary considerably.  Consumers using Clearwire’s WiMax service have experienced problems using the service indoors, particularly in homes equipped with energy efficient windows.  It seems window coatings can block or reduce reception in certain cases.

On December 9, Time Warner Cable will host an exclusive event in Dallas at the House of Blues in celebration of the launch of Road Runner Mobile. The “Life in the 4G Fast Lane” event will feature an appearance by “The Fastest Woman in the World,” Indy Race Car superstar Danica Patrick. Along with being able to sample the service, guests will enjoy musical performances by Eagles tribute band, 7 Bridges, and Dallas’ own The King Bucks. A limited number of tickets will be available to the public leading up to the event.

North Texas residents can register to win $4,000 in the Life in the 4G Fast Lane Sweepstakes. One grand prize of $4,000 plus an HP Mini 311 Notebook will be awarded on December 9. An additional ten (10) HP Mini 311 Notebooks will be given away to 10 first prize winners.

Residents of Austin and San Antonio are expected to get access to Road Runner Mobile in early 2010.

Time Warner Cable also announced it would utilize the services of Brightpoint, a fulfillment house, to support the launch of Road Runner Mobile nationwide including wireless data card, accessory and collateral fulfillment and returns, triage and repairs.

Customers ordering products for Road Runner Mobile are likely to receive them shipped directly from Brightpoint, which will also manage customer returns and repairs.  Brightpoint is also known for supporting rebate programs and supplying retail locations with products from a variety of wireless equipment manufacturers.

Carol Hevey, executive vice president of operations for TWC’s Carolinas region.

Stop the Cap!’s strong readership in the Triad region of North Carolina comes from their experience with Time Warner Cable’s Internet Overcharging experiment this past April.  For residents in greater Greensboro and surrounding communities, now you get a chance to be pioneers of a different sort.

Time Warner Cable today announced Greensboro, Raleigh, and Charlotte, all in North Carolina, among the first in the nation able to purchase Road Runner Mobile, a new 4G wireless mobile broadband service designed to accompany your existing Road Runner subscription.

On December 1st, Time Warner Cable customers can sign up for the service, providing speeds up to 6Mbps, starting at $34.95 per month, if you are on a Price Lock Guarantee (a service commitment requiring you to remain with Time Warner Cable in return for service discounts) and subscribe to a bundle of services.  That low priced option has a usage allowance of 2 gigabytes per month.

Time Warner Cable's Carolinas region service area

“With Time Warner Cable’s 4G Mobile Network, we now offer the fastest mobile service available and extend our reach outside the home.” said Carol Hevey, Executive Vice President of the Carolina Region for Time Warner Cable.  “Giving our customers the convenience of mobility and the speed of 4G, Road Runner Mobile lets customers take their favorite Internet service wherever they go.  This is an important part of our strategy to give our customers any content, on any device, anytime, anywhere.”

Time Warner Cable is using the Clearwire WiMax network to provide the service, a benefit it gained along with Comcast when they became part-owners of the Sprint-Clearwire venture.

Pricing will vary depending on the level of service customers need:

• Road Runner Mobile 4G National Elite gives unlimited access to both Time Warner Cable’s 4G Mobile Network and a national 3G network (Sprint, presumably), for use when traveling.
  o $79.95 per month for Road Runner Standard or Turbo customers.
  o Further discounts for Double and Triple play customers and those on a Price Lock Guarantee.
• Road Runner Mobile 4G Elite gives customers unlimited access to the Time Warner Cable 4G Mobile Network.
  o $49.95 per month for Road Runner Standard or Turbo customers.
  o Further discounts for Double and Triple play customers and those on a Price Lock Guarantee.
• Road Runner Mobile 4G Choice gives light users 2GB of service on the Time Warner Cable 4G network each month.
  o Available for $39.95 per month to customers of at least one other Time Warner Cable service.  Additional $5 off if you have a Price Lock Guarantee and bundled service package.

Time Warner Cable plans to launch additional mobile services to customers in the future such as the ability to program a DVR from a mobile device and the ability to take their video content with them on the go.  Time Warner Cable will be expanding its 4G Mobile network to additional service areas over the next few months including Dallas, TX and Honolulu and Maui, HI.

Customer experiences with the Clearwire network have been decidedly mixed.  In Portland, uneven signal coverage has plagued service and fueled customer returns.  In Greensboro, some who have tested the Clearwire-branded version of the service report earlier speeds close to 5Mbps that have since slowed to below 2Mbps.

As with any wireless mobile service, inquire about trial options and cancellation policies before signing any contract.  Consumers should always verify service is available to them at tolerable speeds before committing to any contract.

“Comcast isn’t looking to make a $50 billion purchase.”

Stephen Burke, Comcast Chief Operating Officer

Now that Comcast has been freed from that pesky provision of the 1992 Cable Act, authorizing the Federal Communications Commission to set a maximum size for large corporate cable operators, the nation’s largest cable operator is now considering breaking out the checkbook and going on a shopping spree.  That is likely to spark a merger and acquisition frenzy among several players in the industry which could dramatically reduce America’s choices for telecommunications services.

Bloomberg News this evening quotes Stephen Burke, Comcast’s Chief Operating Officer, that it will consider buying other cable operators at a “good price.”

“If there is a way to acquire cable systems for what we consider a good price, ones that are well managed, we would certainly look at whatever is out three,” Burke, 51, said today at a Bank of America Corp. conference in Marina del Rey, California. Still, the company “isn’t waking up every morning” evaluating how it can become bigger, he said.

The Wall Street Journal calls the decision by the U.S. Court of Appeals in Washington, freeing Comcast from its limits, the start of “the coming cable consolidation.”

Martin Peers, writing for the Journal, said that when the dust settles, phone companies might own satellite TV providers and cable companies might end up consolidating into one or two super-sized providers blanketing the entire country with service.

Consumers would be left with a handful of providers for all of their communications needs, from telephone to broadband to television, if the courts open the door with more decisions favorable to the industry and antitrust reviews aren’t aggressively undertaken.

Starting with Comcast, Burke thinks Comcast’s first priority might be to buy up more programmers.  Comcast already has ownership interests in several cable networks, and Burke feels “content channels are good businesses, and we wouldn’t be doing out job if we didn’t try to figure out a way to get bigger in those businesses.”

With Comcast and Cablevision joining forces to sue their way out of the cable network exclusivity ban, owning and controlling those networks, and what competitors get access to their programming, could be an important asset in an ever-consolidating marketplace.  Imagine if U-verse or FiOS was denied access to ESPN, The Weather Channel, CNN, and other popular cable channels.  Would subscribers be compelled to switch providers if they could no longer get the channels they want to watch?

The Journal ponders the coming consolidation frenzy:

Comcast and other cable companies will probably need to consider more consolidation — if not now, in the next couple of years. They are still losing market share to satellite and phone rivals. Comcast lost nearly 700,000 basic subscribers in the year to June. Time Warner Cable has fallen to No. 4 among TV providers, behind satellite firms DirecTV Group and Dish Network.

Cable operators are more than offsetting video losses by selling phone and Internet-access. Eventually, though, those opportunities will peter out. And phone companies’ competitive threat in video could be enhanced by a combination with satellite TV.

The newspaper speculates about this kind of marketplace in the near future:

Today's pay television marketplace

AT&T DirecTV: The Journal ponders an AT&T buyout of DirecTV resulting in a reduction in AT&T’s investment in U-verse, pushing consumers to its newly-acquired satellite service and redirecting investment into the overburdened AT&T mobile phone network.

VerizonDISH: A Verizon buyout of DISH would allow the phone company to push more rural customers to DISH satellite service, and reduce the expense of wiring all but the nation’s largest cities with fiber optics.

Comcast (formerly Comcast & Time Warner Cable, if not others): A supersized Comcast absorbs Time Warner Cable and becomes an even more dominant cable operator, leveraging its investment in Clearwire to offer a  wireless data option to stay competitive with the mobile phone companies like AT&T and Verizon Wireless.

That would leave most Americans with just three choices for telecommunications services capable of bundling multiple products together.  Wouldn’t such a merger-mania trigger antitrust implications and government review?

The Journal doesn’t think so:

Would such a deal pass antitrust scrutiny, even absent the ownership cap? There is a good chance, say several antitrust lawyers. A major focus of antitrust law is whether a merger reduces competition in a way that could raise prices or otherwise hurt consumers. As cable operators generally don’t compete with one another, merging wouldn’t cut competition.

But what kind of benefits would be found for consumers?  If one resides in a city too small to be judged worthy of fiber optic deployment, consumers could be told to get the satellite television service and live with the copper wiring the phone companies provide today.

Cable operators would be in a fine position to compete, as they traditionally have, against satellite television because of the technical limitations of satellite service, ranging from consumer objections to having a dish on their home, to a limit on the number of sets that can be wired, to the inability to get a clear view of the satellite because of nearby trees or other obstructions.

Who pays for the debt likely incurred from a bidding war during a merger frenzy?  Guess.

One of the benefits of being an investor in Clearwire is that Time Warner Cable will get to leverage the benefits of that investment.  This fall, Time Warner Cable will introduce a wireless broadband option, similar to what Comcast is offering, to provide a portable version of Road Runner.

The Time Warner Cable WiMax service will launch first in Dallas and Charlotte, North Carolina.

If it is anything comparable to what Comcast is providing through Clearwire, expect 4Mbps service for about $30 more a month.  Roaming service may also be an option outside of Clearwire service areas on Sprint’s 3G data network.  Comcast charges an extra $20 a month for that capability.

No usage allowance information has been released.

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?

I continue to hear from a few of the “competition is breaking out all over” crowd claim that people who can’t get DSL service from Frontier and don’t want Road Runner after “things just aren’t the same with us anymore — the trust is gone,” can jump to Clearwire and they will live happily ever after. Sure, if you are well within their current service area, depicted below for the Rochester market. They aren’t available in any of the other “experiment” markets in western New York. By the way, I am told their speeds currently max out around 2.1Mbps. That’s slower than DSL.  If anyone here uses them and would like to write up a review, please let me know.

Clearwire Coverage Map - Rochester, NY