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Battle of the broadband

A new venture could expand service across much of the nation and shake up the provider duopoly.

May 08, 2008

Typical broadband speeds in the United States are barely in the top 15 globally, trailing such technological hotbeds as Luxembourg and Norway. DSL and cable modem services are unavailable in many rural areas, leading to far lower broadband use in the country than the city. And even in the city, consumers often have only two choices of provider -- the dominant local phone company or the local cable monopoly.

On Wednesday, prospects brightened for a new national broadband service that would increase competition, drive innovation and improve service. Slumping telco Sprint Nextel, which holds a trove of valuable airwaves, announced that it was joining forces with Intel, Google and several other companies to build a broadband network based on WiMax, a long-range version of the popular WiFi technology. One of the partners is Clearwire, which already operates WiMax-based Internet service in California and 13 other states (mainly in small towns and rural areas).

Sprint has tried to use these frequencies before, first with a TV service that competed unsuccessfully with cable, then with a short-lived wireless alternative to DSL. It eventually settled on plans for a $5-billion network to deliver a mobile version of WiMax, with service slated to start last year in Chicago and Baltimore. The rollout was pushed back, however, as Sprint struggled to fix problems in its main wireless business. Those problems, combined with the investment required to build the new network, led some skeptics to doubt that Sprint would ever deliver on its WiMax promises.

Wednesday's deal didn't dispel all doubts. WiMax technology has some notable shortcomings -- for example, its frequencies don't penetrate physical obstacles as well as some other bands do, and like all wireless offerings, its speed tends to be lower than advertised. More troubling, three of the partners are major cable companies that won't be eager to lose their own Internet customers to the new venture. But with Sprint and Clearwire combining their airwaves, and their partners ponying up $3.2 billion, the venture probably has what it takes to field a WiMax offering across a large swath of the country. If it lives up to its potential, it will be a true alternative to today's broadband duopoly -- and a mobile one at that. With some luck, it might even speed other wireless phone companies to upgrade their networks and join the scrum.

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