4G Networks Promise True Wireless Broadband

Despite today’s overtaxed networks, cellphone companies stand to become tomorrow’s Internet providers.

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With promises of true broadband speeds, consumers are beginning to enjoy new networks that push cellular connections into the next generation. The "4G" (fourth-generation) tech is the next step for mobile surfers who want anytime, anywhere downloads of music, video, and other Web fare. 

The initial speeds are fast enough that some consumers are even cutting the wire for home data service. They're replacing their cable and DSL modems in much the same way that they cut landline voice service in favor of cellphones. 

Clear, a brand launched by 4G pioneer Clearwire, reports that more than half of its customers depend entirely on wireless as their Internet link. "They get an Internet connection that gives them speeds as fast while on the go as at their house," says Michael Sievert at Clearwire, which is launching the first nationwide 4G network. "And they only have one subscription to worry about." 

[It was in the past decade that mobile tech began to dominate.] 

Looming issues such as potential usage caps and overstrained networks make it unclear how many consumers can wholly depend on the new 4G networks as their Internet provider. But the fact that it's a potential option marks a shift for cellphone companies, which for decades were primarily about voice calls. The 4G networks are turning the wireless voice providers into true Internet providers, says Phil Solis, a market analyst with ABI Research. "4G is definitely about data," he says. "I wouldn't rule out voice later, but it's now about data." 

That means data as in photos, videos, and the apps popularized by the iPhone and that are now found in other smart phones. The new services don't yet work with phones, but they work initially with laptops, netbooks, and desktop computers. Hybrid smart phones that will tap the high-speed networks for Internet access and make voice calls on the old 3G and 2G networks won't arrive until later this year, and the selection could be limited for several years. 

[New smart phones with Google software are all the rage.] 

Clearwire's initial 4G service, which is rebranded and sold by Sprint and several cable TV companies, can download data at average speeds of 3 to 6 megabits per second, or Mbps. That's about four or five times faster than the current 3G connections. And while it's well short of premium cable and DSL speeds offered in many markets, it's fast enough to stream basic Internet video. It's also faster than many homes now get from their wireline broadband. 

Even higher speeds are promised by the biggest wireless companies, Verizon Wireless and AT&T Mobility, which are assembling their own versions of 4G wireless broadband. Verizon has been testing its service and reports that average downloads zip along at 5 to 12 Mbps. The carrier says it will launch its high-speed data service in at least 25 U.S. markets this year. 

AT&T is trailing a bit, with hopes to switch on its 4G service in 2011. Ma Bell is first scrambling to soothe customers angered because they can't get current 3G speeds with their iPhones. AT&T's executives explain that they didn't anticipate data demands from smart phones, saying that customers are using 50 times more data than they did before the iPhone was introduced. The result is that the Internet and iPhone apps just don't work for many customers. 

But consumers shouldn't get discouraged at the prospect of wireless Internet, says Larry Swasey, a wireless consultant with Visant Strategies. AT&T's problems are largely limited to specific markets such as New York City and Los Angeles and can be fixed in coming months with interim steps, he says. "AT&T is doing a very smart thing with a series of incremental upgrades." 

The experience nonetheless has AT&T, Verizon, and other carriers talking publicly about deep-sixing unlimited data plans. "We'll progressively move towards more of what I call variable pricing so the heavy (use) consumers will pay more than the lower (use) consumers," AT&T CEO Randall Stephenson told analysts last week.