Sprint's decision to use WiMAX for its 2.5 GHz spectrum starting in 2007 shifted the industry's attention away from U.S. service providers that already have customers and are continuing to expand their own networks with WiMAX equipment.

These operators aren't using WiMAX yet; rather, they are using pre-WiMAX technologies that still employ most of the same schemes and offer broadband wireless access for businesses and consumers.

Among these operators are Clearwire and Towerstream, two providers with dissimilar strategies and financing that are both focused on the WiMAX dream. One major difference is that Clearwire focuses on consumers while Towerstream is after business customers.

Another distinction is the level of funding. This year, Clearwire received $1.5 billion in investments from Intel and Motorola, enough to cancel a planned initial public offering of stock. Intel also invested in Clearwire three years ago as a way to prove its WiMAX technology. Meanwhile, Towerstream declines to talk about its finances, but obviously doesn't have Clearwire's deep pockets.

After three years in business, Clearwire has 162,000 subscribers for its fixed wireless access, according to Ben Wolff, co-CEO of Clearwire with Craig McCaw. Wolff says the company will cover 34 markets by the end of 2006. Clearwire, along with Intel and other partners, also has started a trial of the mobile version of WiMAX in Oregon, although Wolff isn't ready to talk about plans to offer that technology.

Among the three cities that Clearwire will launch by the end of the year, Seattle will be its largest to date. The other two, Chico, Calif., and Raleigh, N.C., are more typical Clearwire markets in size. Prior to Seattle, Honolulu was Clearwire's largest market.

SMALLER IS BETTER The smaller markets are easier to build out, Wolff says, implying that the market opportunity to supplant DSL or cable Internet access might be more attractive in those locations. But he emphasizes the level of penetration Clearwire has achieved.

Clearwire has reached 10 percent penetration or higher in 20 percent of its markets, Wolff notes. In older markets, that penetration is as high as 15 percent. Jacksonville, Clearwire's first market, had its first 1,000 subscribers within 30 days. "We believe that is unprecedented growth in the communications industry," Wolff says, adding that Clearwire is reaching 1 percent to 2 percent penetration in its markets every three months. He says that is faster than the uptake for cellular communications a decade ago.

Clearwire also has licenses for 2.5 GHz spectrum covering 210 million people in the United States, he says, including spectrum covering all or parts of 72 of the top 100 markets.

The operator, with headquarters in Kirkland, Wash., also has built networks in Europe, with operations up and running in Brussels, Copenhagen and Dublin. In addition, it has nationwide licenses for Poland, Romania and Spain. Wolff says in Brussels, where it offers data rates of 1 Mbps on the uplink and 3 Mbps down, Clearwire is realizing average revenues per user (ARPU) of $35.40 after just nine months of operations.

The carrier provides two levels of access in the United States as alternatives to DSL and cable Internet access. One offers 768-kbps data rates for $29.99 a month, while another is 1.5 Mbps for $36.99. Subscribers can purchase premise equipment or Clearwire rents it for an additional $5 a month.

Roughly 58 percent of Clearwire customers had DSL or cable access in the past; 32 percent formerly used dial-up access; and 10 percent had no access. Nearly two-thirds of the customers use the service in their homes.

"We're making the WiMAX vision a reality today," Wolff says. "With 162,000 subscribers, we've demonstrated this is a viable business and we're here to stay."

ALTERNATIVE MODEL Towerstream was one of the first operators with a WiMAX strategy, although the company was created in 2000 initially looking at the backhaul market. Two years ago, it had 700 customers in five cities, but it hasn't grown much since then. Its focus has been on small and medium businesses in large cities, initially in New York City and now with Boston, Chicago, Los Angeles, San Francisco and Providence, R.I.

CEO Jeff Thompson says Towerstream plans to add one or two new markets annually. He declines to talk about subscriber numbers, but says Towerstream's service is available in 750 buildings in the cities it serves. The company's model is to sell service to customers in the buildings and then negotiate the right to put its equipment on the roof. The company offers various levels of service, starting with a T1 equivalent at 1.5 Mbps for $525 per month up to 100 Mbps for $5,000 per month.

Like Clearwire, Towerstream uses proprietary "pre-WiMAX" equipment, but Thompson says the company will move to WiMAX equipment once it becomes certified. He's not interested in mobile WiMAX, however, only fixed.

Towerstream also bypasses the RBOCs completely, eliminating the cost of backhaul and connecting instead through Internet providers such as Level 3 and Cogent Communications. This means the company can turn on service to a location in a matter of days or even hours, which it has done for the Republican and Democratic National Conventions and for security purposes at the United Nations.

"We see wireless as an alternative to the RBOCs," Thompson says. "I can build a gigabit mesh architecture that is more reliable and more redundant than the traditional SONET [synchronous optical network]."

Towerstream uses equipment primarily in the unlicensed bands, although it does own some 2.5 GHz spectrum and may enter the anticipated auction of 700 MHz spectrum in a couple of years. Most of its traffic is handled over license-free, 2.4 GHz spectrum and the operator is eyeing license-free, 5.8 GHz spectrum as well.

Asked if Towerstream's market rollout is stalled since it has added only one market in the last two years, Thompson says the challenge has been hiring sales people and acquiring real estate in markets it wants to add. He also says equipment prices remain high but will fall rapidly as more is certified.

Although industry eyes are currently fixed on Sprint's WiMAX move, with the different market strategies and level of financial backing, Clearwire and Towerstream could offer compelling case studies on which direction the emerging technology may head in the not-too-distant future