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Why U.S. Needs Wholesale-Retail Separation


Just a little over a year ago, most analysts thought the U.S. market would only see deployments of fixed WiMAX in rural areas with little or no DSL or cable modem service. During the summer of 2006, however, the bar of expectations was raised off the ground -- but it needs to go much higher.

In July, Clearwire made a firm commitment to shift its proprietary network to mobile WiMAX, receiving investments from Intel and Motorola. Shortly afterwards, Sprint announced its plans to deploy mobile WiMAX to make use of its extensive 2.5 GHz spectrum, becoming the first major mobile operator to commit to WiMAX.

"Today we are watching major strategic alliances, partnerships, and mergers starting to take place," says ABI Research principal analyst Philip Solis. "DirecTV and EchoStar announced a partnership with Clearwire, allowing Clearwire to bundle broadcast video and -- when its network is deployed -- provide the DBS companies with a fast, low-latency pipe into the home."

ABI believes that Sprint and Clearwire will at least form a roaming arrangement, if not actually merge in some form. NextWave also has a lot of WiMAX-friendly spectrum, and its NextWave Broadband subsidiary will be selling mobile WiMAX chipsets, helping to enable more WiMAX devices faster, thus increasing the value of the spectrum it holds.

In addition, there are many wireless ISPs looking to deploy mobile WiMAX. Horizon Wi-Com, for example, holds 2.3 GHz spectrum that it acquired from Verizon across much of the Northeast.

However, I believe that the only way that Americans will experience a meaningful increase in broadband wireless network innovation is when the FCC insists that the separation of wholesale and retail are mandatory "open access" requirements for bidders on the upcoming 700MHZ spectrum auction.

That said, it will be several years after that decision that the U.S. market can start to catch up to the global leaders in broadband market development. Therefore, time is of the essence.

These market trends and more are discussed in a new ABI Research Brief entitled "Mobile WiMAX in the United States" which provides detailed analysis of these service provider's past and present efforts, and future directions.

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