Monetizing the Middle Band EBS - The Clearwire Opportunity

Clearwire's opportunities are dwindling when it comes to defining it's own path for sustainability. Sprint, the majority owner of Clearwire is just sitting back waiting to see what wholesale price they will get on the 152MHz of LTE ready Educational Broadband Service (2.5 GHz EBS) spectrum that Clearwire has the rights to nationwide. Or Sprint/T-Mobile could just buy Clearwire out, assume the $290M per year EBS license holder lease payments, and migrate the commercial EBS spectrum to LTE. And while support for a Sprint/T-Mobile merger is out there it is unclear as to where Clearwire, through possible ownership restructure of the Company, will stand when all is said and done.

One option that Clearwire has is to fully exploit the synergies available between the Educational Broadband Service (2.5GHz EBS) spectrum they have the rights to and the booming education technology market that is growing exponentially within the United States. Companies like Pearson and Monster (other potential Clearwire wholesale partners) are carving out their own niches in education technology and newcomers like News Corporation, and their new Education Division are investing in education applications and technology coming to market through companies like Wireless Generation (News Corp equity investment of $360M in this company)

Of course their is Microsoft who can drop immense dollars towards education reform in this Country - and VC's like Tomorrow Ventures, an investment arm for Google's Eric Schmidt, who is buying up/funding and inventorying mobile educational service applications that will catalyze how students, teachers, parents and administrators interact, learn, train, and exchange data using 21st century educational infrastructure. All of these players would love to have access to revenue from wireless infrastructure to offset costs associated with delivery of their respective educational applications and services... perfect Clearwire partners if they plan to move their wholesale model forward.

If Clearwire took the traditional carrier blinders off and saw the alliances and strategies available to them in a changing educational ecosystem they could really take hold of a huge emerging education technology market that represents economic recovery and sustainability for the U.S., workforce development/jobs creation and overall improvement of our education system.

A good starting point would be to coordinate and promote use of the Middle Band EBS wireless spectrum in the build out of a nation wide interoperable educational broadband service network.

During the first week in March NEBSA (National EBS Association) held their yearly conference in which hundreds of educational agencies attended. These entities represent our regional EBS spectrum license holders from whom Clearwire leases most of their spectrum. The breakout sessions introduced specific educational applications that would allow EBS license holders to better serve their growing commuter and off-campus populations with broadband access to critical course related materials, Mentor/Protégé programs, campus security, expand the collaborative efforts between area K-12 schools, students and teachers and continue the development of new wireless services that are critical to education reform in the United States.

This is where the opportunity lies for Clearwire as a Company. Let Sprint, T-Mobile, Comcast and Time Warner haggle through their future commercial offerings using the EBS spectrum and while they are doing that Clearwire could tap a huge educational market in need of infrastructure to support education reform programs like Race to the Top and a revamped Universal Services Fund. This market easily represents one third of the Country and through a conscious and differentiating business and revenue model Clearwire could capitalize to the extent that they would define their own destiny in the wireless carrier market.

They had already started to do this through a partnership with Mobile Citizen and the Instructional Telecommunications Foundation but it seems that this program has fallen off a bit based upon dated news coming from Mobile Citizen. This is probably due to lack of cash on Clearwire's balance sheet... and the economy in general, but the premise is there.

[From Mobile Citizen] "Mobile Citizen provides the most advanced, reliable and secure mobile broadband service exclusively to education and non-profit organizations at remarkably low cost. Unlike other broadband services, Mobile Citizen’s wireless broadband is powered by WiMAX, a 4G technology from Clearwire Corporation, the country’s leading mobile broadband network provider. So schools and nonprofit's, students and mobile workers will enjoy reliable and secure access to the Internet, wherever they may wander, wherever their work, or their homework takes them."

Herein lies a new Clearwire conscious business model in which they could fully monetize the Middle Band Segment (42MHz) of the EBS spectrum and really make a name for themselves as a partner in education reform. Bring in the likes of News Corporation's new Education Division and Wireless Generation and you have potential News Corp funding and a working model going forward. And all of this compliments Clearwire's wholesale model.

Newspapers and Education

Another compliment to Clearwire's wholesale model are newspaper publishers. A dedicated and revenue generating infrastructure for digital delivery of publisher content would be ideal. 4G advancing media publishing is a natural marriage. Newspapers have plenty of subscribers, too. And when you tie in synergistic educational and regional employer group content you have a formula for economic recovery and sustainability within the region.

Case in point was when I wrote a piece called "4G to Become the New e-Printing Press - Saving the Newspaper Publishing Industry" back in June of 2009. The title speaks as to the content of the piece. Schurz Communications publishes eleven daily and eight weekly newspapers in medium and small markets with a combined circulation of nearly 225,000. Digital Bridge (partner with Clearwire) provides broadband wireless to small and medium-sized communities of up to 150,000 people nationwide through using the 4G technology standard. As a result Digital Bridge and Schurz Communications partnered. 

In the end this will all hash itself out over the coming months. The most plausible scenario is that Sprint and T-Mobile will come together... and Clearwire has the opportunity to support and build large scale education infrastructure through the very EBS license holders (and their EBS spectrum) that got them to where they are today.