New Yorkers know the end of summer is upon us when the New York State Fair opens every year at the end of August in centrally-located Syracuse. But at this year’s fair, Time Warner Cable has also made it clear the season for its 4G mobile broadband service has also come to at least a temporary end.

Fierce Cable’s Steve Donohue noticed big changes at the cable company exhibit:

When I attended the New York State Fair outside of Syracuse last year, the Intelligo mobile hotspot–which Time Warner Cable offered to subscribers through a partnership with Clearwire –was one of the hottest pieces of technology that it had on display. Time Warner Cable said that it tripled the number of 4G wireless hotspots that it sold at the fair in 2011 compared to 2010. Here in Central New York, where subscribers don’t have access to the Wi-Fi networks that Time Warner Cable, Comcast and Cablevision offer in the New York area, apparently there was a significant demand for mobile hotspots.

‘Intelligone’

This year, the mobile broadband technology is all gone. Both Time Warner Cable and Comcast are no longer selling access to Clearwire’s 4G WiMAX service marketed under each cable company’s brand. Once it became clear they were partnering up with Verizon Wireless to sell each other’s products, the days of Clearwire were numbered.

Both cable companies are still supporting existing Clearwire mobile broadband customers, but for how long nobody is certain. Verizon Wireless’ products have not yet appeared on the western or central New York regional Time Warner Cable websites, but may be forthcoming soon.

Meanwhile, Time Warner’s push this year is on home automation and security. The company has been test marketing its IntelligentHome service in Rochester for quite awhile and has now expanded to other upstate areas. The service offers a respectable suite of traditional security products apps ranging from watching your pets over webcams to controlling your home’s heating and cooling system from remote locations.

In 2010, Time Warner Cable featured celebrity Mike O’Malley at the Fair to shake hands and sign autographs. This year, they have a player and “spokesmodel” from the Syracuse Crunch, a minor league pro hockey team. Time Warner Cable also hired a juggler on a unicycle to attract crowds to their pavilion.

History repeats itself. In 1889, it was railroads, steel, iron, and energy. Today it is telecommunications.

My first introduction to the concept of corporate doublespeak — designed to cushion the blow of bad news behind a wall of barely-comprehensible babble came in October 1987 when I heard one Wall Street analyst refer to the great stock market crash that had just befallen the financial district as a “fourth quarter equity retreat.”

Holy euphemism, Batman!

You weren’t fired — you were “made redundant.”  The bankruptcy of Detroit automakers and the layoffs that followed were not as bad as they looked. It was merely “a career-alternative enhancement program.”

And, no, Verizon and AT&T are not engaged in should-be-illegal marketplace collusion on pricing and services. They are just practicing some harmless “price signaling.”

That’s the awe-struck view of management consultant Rags Srinivasan, who just gushes over the marketing “stroke of genius” that threatens to give customers a stroke when they open their monthly bill.

Srinivasan’s piece, worthy of the Wall Street Journal editorial page, turns up instead on GigaOm, where it gets some pretty harsh treatment from tech-lovers who hate the rising prices of wireless service.

Price signaling has always existed between the number one and number two players in any market. Agreeing to not engage in a price war is truly a win-win for the market leaders. Since outright price fixing is illegal, market leaders resorted to signaling to tell the other company their intentions or send a threat about their cost advantages.

But traditionally, it was more like flirting — ambiguous enough that the underlying intentions could be denied. Why are these two not shy about admitting to flirting now? The simple answer is the iPhone.

Not too long ago we worried about running out of talk minutes and paying overage. Service providers offered us tiered plans that offered more minutes for a higher price and unlimited minutes for an even higher price. With the additional revenue flowing directly to their bottom line, these higher priced plans were real cash cows.

For those who have any doubt about the profits from unlimited plans, I’d point out that the costs of a mobile service provider are sunk with zero marginal cost for additional minutes. And texts don’t even consume traffic channels — they piggyback on control channels.

[…] In another genius pricing move, Verizon Wireless is presenting this $100 mobile service plan to customers in a bundle — talk minutes plus data. In the past, around $70 was allocated to talk because consumers valued it more. Now subscribers pay only $40, but they still pay the same $100 total price. This is nothing short of pricing excellence, protecting customer margin while also using strong price signaling to make sure that the next biggest market share leader follows suit.

What Srinivasan calls “business at its best” and “pricing excellence” we call collusion at its most obvious. The GigaOm author says he does not want the government tinkering with this kind of marketplace “signaling,” and it does not appear likely he has much to worry about. AT&T and Verizon executives have grown increasingly brazen (and obvious) with their near-identical pricing and “me-too” plans which leave little to differentiate the two carriers from a pricing perspective. The likely result will be at least 100 million cell phone customers eventually stuck paying for unlimited voice and texting services they neither want or need.

Wireless Wonder Twins Powers Activate: Shape of anti-competitive marketplace for consumers; form of collusion.

True, AT&T charges Cadillac prices but has the customer service image of a used 1995 Kia… but they did have the original exclusive rights to the Apple iPhone and Apple devotees proved they will endure a lot. Verizon Wireless has a better network and has always charged accordingly.

Unfortunately for consumers, the also-rans Sprint and T-Mobile (and the smaller still) depend on AT&T and Verizon for roaming off the city highway and into the countryside, and they are often stuck with devices that are a step down from what the bigger two can offer.

Srinivasan would have a better argument if the wireless marketplace had not become so consolidated. Had AT&T had its way with T-Mobile, America would have just a single national GSM network — AT&T. Verizon does not consider its CDMA competitor much of a bother either, and Sprint Nextel CEO Dan Hesse has to divide his time between fighting with Wall Street over why the company has not already sold out to the highest bidder (and now wants to spend a fortune upgrading its network) and customers who consider Sprint too much of a trade-off in coverage and its dismal “4G” Clearwire WiMAX network too slow for 2012.

Srinivasan is probably too young to understand AT&T and Verizon never invented “price signaling.” A century ago, the railroad robber barons did much the same, leveraging their anti-competitive networks-of-a-different-kind to maximize prices in places that had few alternatives. Where competitors did arrive, they were typically bought out to “maximize savings and eliminate market inefficiencies.” The same was true in the steel and energy sector of the early 20th century.

The result is that consumers were turned upside down to shake out the last loose change from their pockets. Eventually, government stepped in and called it marketplace collusion and passed antitrust laws that began a new era for true competition.

How soon some forget.

Sprint Nextel has allowed its majority share in Clearwire Corporation to drop below 50 percent in a strategic move to rebalance its voting and economic interest in the wireless partnership.

Clearwire runs the WiMAX 4G network Sprint sells to its customers, but America’s third largest cell phone carrier shares that 4G network with several other companies that resell access under various brands, including Time Warner Cable Mobile, Best Buy Mobile, and a range of smaller “MVNOs,” which mostly offer prepaid access.

Clearwire’s troubled existence forced Sprint to reduce its involvement and ownership in the company last year, when some analysts predicted the company faced imminent default on its debt. Had that happened, Sprint would have found itself inextricably tied to Clearwire’s fate as a majority owner, and could have been forced to help bailout the enterprise.

Clearwire has been trying to reinvent itself after Sprint declared it planned to construct its own 4G LTE network that would gradually replace the older WiMAX technology Clearwire uses.  That news challenged Clearwire because Sprint in the largest user of the network, providing 9.7 million customers with access. Clearwire’s own retail service, under the Clear brand, has just 1.3 million customers. More than one-third of Clearwire’s income comes from Sprint.

As Sprint customers gradually depart from WiMAX, Clearwire is trying to find new markets reselling access to the older technology to prepaid startups and discount resellers including FreedomPop, NetZero, Simplexity, and most recently Jolt Mobile.

But even Clearwire understands the days of its WiMAX network are limited. The company plans to build its own TD-LTE 4G network to remain competitive, and will resell wholesale access to prepaid services and to larger concerns like Leap Wireless’ Cricket and Sprint as those companies work to gradually expand their own LTE networks.

Clearwire believes their enormous spectrum assets could help smaller wireless companies fulfill demand for 4G service, particularly if those companies lack sufficient spectrum to fully provide the service themselves.

“We believe that, as the demand for mobile broadband services continues its rapid growth, Sprint and other service providers will find it difficult, if not impossible, to satisfy their customers’ demands with their existing spectrum holdings,” Clearwire indicated in its last quarterly report. “By deploying LTE, we believe that we will be able to take advantage of our leading spectrum position to offer offload data capacity to Sprint and other existing and future mobile broadband service providers for resale to their customers on a cost effective basis.” .

Clearwire plans to have 5,000 TD-LTE cell sites functioning by mid-2013 and quickly grow the network to 8,000 cell sites nationwide. Among the first cities expected to get the new LTE 4G service first are New York, Los Angeles, Chicago, and San Francisco.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Clearwire 4G LTE Trials Results 1-2011.flv[/flv]

Clearwire holds more wireless spectrum than any other American wireless company, with 150 MHz in the 2.5 GHz band in the nation’s top 100 metro areas. Unfortunately for them, their high frequency spectrum does not penetrate buildings  as well as lower frequencies, such as 700MHz (Verizon & AT&T), making reception problematic indoors, especially in areas where signal strength is lower. Despite that, Clearwire believes its huge swath of spectrum gives it the ability to deploy extremely wideband 4G LTE service, which this video shows can support faster speeds. But the tests were conducted outdoors, where Clearwire’s network typically performs better. (2 minutes)

A Sprint spokesperson this week confirmed the company will continue selling “unlimited data” service on their forthcoming LTE 4G network.

Sprint’s Nichole Cappitelli told TechHog the carrier plans to extend unlimited access, with no speed throttling, to those buying Sprint’s first LTE phone, the Viper 4G.

Sprint begins accepting pre-orders for the LG phone April 12, with an anticipated shipping date by the end of the month.

Sprint’s 4G LTE network, still under construction, will provide improved 4G speed and value for customers looking for some savings over AT&T and Verizon Wireless.  Sprint currently delivers slower 4G WiMAX service from its partner Clearwire.

The Viper 4G phone will sell for $100 with a 2-year contract and $50 mail-in rebate.  With Sprint’s Everything plan, $80 will buy you unlimited mobile data, texting, and calling.  A similar plan from Verizon that only includes 2GB of mobile data is priced $40 higher.

Until July 22, Sprint will bundle 50GB of free cloud storage and sharing from Box, available from the Google Play app store.

Sprint is America’s only national mobile phone company offering unlimited and unthrottled data plans.

“Disruptive” is perhaps too timid a word to use for Skype co-founder Niklas Zennstrom, the man who brought Excedrin-strength headaches to the music industry with file-swapping software Kazaa and streamed video across the net for free with Joost.  Now he wants to blow up America’s business model for expensive wireless data by literally giving it away to wireless phone users.

FreedomPop has a “freemium” business model of its very own — give away 1GB of 4G data through Clearwire to iPhone owners willing to use FreedomPop’s WiMAX-fitted phone case with the hope users will throw more business their way for around $10/GB after the first gigabyte is gone.

Zennstrom

Clearwire has been in the mood to make deals with all-comers to leverage its WiMAX network that carriers like Sprint plan to abandon for LTE 4G service in the not-too-distant future.  By giving away 1GB of free usage (and it remains unclear whether this is a “one-off” deal or if the meter resets to zero every month), the company is set to draw plenty of free press.

FreedomPop is likely to appeal to price-sensitive customers who don’t want to pay providers $30 a month for 2-3GB of usage when a much smaller, cheaper data plan combined with the free service will do.

The WiMAX case, which will fit over Apple’s iPhone, also acts as a mobile hotspot, supporting up to eight concurrently-connected devices.  No change of phone is required as users can connect to the service through Wi-Fi.

Customers will have to place a deposit on the case, likely less than $100, refundable when returned in good condition.

With most people not exceeding 1GB of usage per month, the only cost will be the “bare minimum” data plan customers are required to take with AT&T, Verizon Wireless, or Sprint, which currently runs $15-20 for a few hundred megabytes.

Clearwire’s WiMAX doesn’t deliver coverage to all points in the United States, and its speeds are considerably lower than 4G LTE service.  But free is free – a concept NetZero hopes to use to pitch a similar free 4G Clearwire WiMAX service.  The primary difference is your granted usage allowance.  FreedomPop will provide 1GB — NetZero 200MB.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/WSJ How Skype Co-Founder Hopes to Make Money Giving Away Mobile Broadband on FreedomPop 3-23-12.flv[/flv]

The Wall Street Journal explores the business model of FreedomPop.  How can giving away 4G data succeed financially?  (4 minutes)