Clearwire's 4G Hotspot: How to Make the Wired Internet Seem Stodgy and Overpriced

Last Updated Oct 18, 2010 5:37 PM EDT

Clearwire (CLWR) is launching its 4G wireless service in New York City on Nov. 1, putting a capstone on Clearwire's nationwide coverage, which it says is available in over 50 markets in the US. It's also going to put a cattle prod to major Internet providers -- and not because of the speed.

Mobile hotspots are nothing new; Verizon (VZ) and Sprint (S) have both been selling the MiFi for almost a year. (The MiFi is the same gizmo that Verizon will be packaging with the iPad when it begins selling the Apple (AAPL) device on October 28.) Mobile hotspots are basically cell phones without screens, and they share their data connection with other devices (like your laptop) so you can get Internet anywhere. The 4G hotspot is different only in that it runs on a new, faster network that can achieve about 6Mbps, which is about as fast as the average home or office broadband connection.

I've been testing a pre-release 4G hotspot from Clearwire's consumer-facing subsidiary, which it calls Clear. Unlike the other 4G hotspots offered by Sprint and TimeWarner Inc. (TWX), this one is different because it is marketed to the elusive tech-happy 18-34 demographic. It's called the Rover Puck.

The guts of these 4G hotspots are all similar. Sprint owns a majority share of Clearwire, so their networks are one in the same, and TimeWarner has arranged to offer their own version of the Sprint mobile hotspot in the New York area markets. (The Sprint and TimeWarner versions also come with 3G radios inside, meaning that they can jump back and forth between 3G and 4G signals as each becomes available.) The Rover Puck is only available with a 4G radio, so once you're out of 4G range, you're stuck without Internet.

But the Rover's secret sauce is its prepaid price plan. The device itself is only $150, and $5 a day to operate (though cheaper if you buy weeks or months at a time).

The revelation about the Rover: when you use it, you become acutely aware the Internet has nothing to do with wires.

This sounds like a facile observation, but most of us -- even technophiles -- are really used to using two "Internets." The first kind is the reliable, speedy variety we find at home and at work, where things download instantly over WiFi and pages load quickly. The other variety is the mobile kind: the crawling, awful 3G connection that we use on our smartphones. I doubt anyone walks around thinking about the taxonomy of these two Internets, but in reality, we are all sadly acclimated to the disparity.

A 4G or "fourth generation" connection is a pleasant disruption. Suddenly, the mobile and "broadband" Internets are one, erasing any pretense that you need to be at home or at work to actually accomplish something online.

You can also share the 4G connection with others. Most mobile hotspots can connect a handful of computers to the Internet; the Rover does eight. This completely changes co-location and remote working. It changes the way groups of students can work off-campus. And it changes the way we see the cost.

If 4G hotspots proliferate, it will alter the "Internet" from being a utility (like gas or electric) to being more like, say, Sirius XM Radio (SIRI). When the 4G hotspot is with you, your iPhone or Android phone downloads mail faster. It streams music faster. It makes flawless VOIP calls. Your computer fires up web pages at full speed, and you can actually rent and download an entire movie. The power is a little bit intoxicating. Finally, the Web is following you. And yet, if you choose to unplug for a day -- at least with the prepaid Rover -- you pay nothing.

It all makes your home broadband feel stodgy and somehow over-priced. If you pay for a full month of the rover, it costs about $50. That's the same as most home Internet connections in New York City -- but those don't travel with you. To anyone who owned an early mobile phone, the feeling will be eerily familiar. Expect no less a sea change from 4G.

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