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LAS VEGAS--Sprint Nextel will launch its first commercial WiMax service in Baltimore in September, Sprint CEO Dan Hesse said Wednesday during a speech at the NxtComm trade show.

Dan Hesse, Sprint Nextel CEO

(Credit: Marguerite Reardon/CNET Networks)

Sprint will turn up WiMax service in two other cities, Chicago and Washington, before the end of the year, Hesse added. But he didn't give a specific time frame for these deployments.

The much-anticipated WiMax service has been delayed several times. Initially, the company had said it would launch the service in the first half of the year. More recently, it has been vague about when it would deploy the service. It's been testing the mobile WiMax service with download speeds of between 2 megabits per second and 4 Mbps since the end of last year in Chicago and the Washington-Baltimore area.

The company has faced some delays due to technical issues having to do with backhauling or connecting traffic back to Sprint's core network. But much of the delay seems to be a result of financial and management issues at the company.

In an effort to appease shareholders and refocus the company on its core cell phone business, Sprint announced last month that it would spin off its WiMax assets and team with another service provider, Clearwire, to build a nationwide WiMax network. Clearwire has already been offering a fixed WiMax service in parts of the U.S., and it is currently testing a mobile WiMax service in Portland, Ore.

The new joint venture, called Clearwire, will be majority-owned by Sprint and has taken investment from cable operators Comcast and Time Warner Cable as well as from big tech companies such as Intel and Google.

During his speech, Hesse said that the new Sprint Clearwire venture has at least a two-year advantage over other wireless operators who plan to build 4G wireless networks. And he emphasized that this was a key differentiator given the fact that existing 2G and 3G networks were already running out of capacity for data services.

"As fast as (3G networks) are today, nothing will define wireless broadband like WiMax," he said. "The 4G technology is wireless at rocket speeds. And Sprint could have a two-year head start in providing broadband wirelessly at landline speeds."

He talked about using the new WiMax network to provide Internet connectivity to a slew of consumer electronics devices such as cameras, as well as bringing new services to cars, allowing parents to download videos directly to their cars while traveling so their kids could watch movies in the back seat.

Experts following the WiMax market say it is critical for Sprint to get a commercial WiMax up and running as soon as possible.

"Nothing beats proof of concept," said Paul Kapustka, founder and editor of Sidecut Reports, which has recently published a report on the WiMax market. "It's great to talk about this stuff, but seeing a network in action goes a long way. If Sprint wasn't able to get a commercial deployment out before the end of the year, then there would have been real questions about the viability."

But even if Sprint is able to hit its new September deadline, there are still big questions surrounding WiMax's future. Even with big technology companies such as Intel and Motorola backing the technology, some experts question whether mobile WiMax can be anything other than a niche market. Most of the world's major cell phone companies including AT&T, Verizon Wireless, and Vodafone, the world's largest cell phone operator, say they will use a competing technology known as Long Term Evolution or LTE to build their 4G wireless networks.

LAS VEGAS--Verizon Communications is looking toward big cities as the next big opportunity for its Fios broadband and TV service.

The company said Wednesday that it expects to get approval from the New York Public Service Commission to offer its Fios video service in New York City as early as next month.

"Our plan is to cover all of the 3.1 million households in all five boroughs in the next five to six years," Verizon's COO Denny Strigl said during a keynote speech at the NxtComm trade show here. "We will start this year as soon as we receive the approval of the New York Public Service Commission, which we expect will be next month."

Denny Strigl, COO of Verizon Communications, speaks at NxtComm.

(Credit: Marguerite Reardon/CNET News.com)

Verizon is also working to get video franchise approval for the Fios TV service in other large cities such as Philadelphia and Washington, D.C., Strigl said at a press conference after his keynote.

Verizon sees cities as a huge opportunity for the Fios service, which provides high-speed Internet service, telephony, and cable TV service over a super-fast fiber connection. Because most customers in big cities such as New York City live in large apartment buildings, Verizon has had to adapt its installation process.

This proved to be a technical challenge for the company when it first started deploying Fios a couple of years ago. But the company has since started using bendable fiber optic cabling and has solved many of the issues associated with deploying the service in these buildings.

"Providing Fios in large cities is very important to us because the economics of multiple dwelling units is very good for us," Strigl said at the press conference. "When you think about it, the ability to pass a building that has 300 apartments is much easier than deploying service to an acre or half an acre for a single-family dwelling. So it's a very good growth opportunity for us."

Strigl also confirmed that the company is looking to expand its Fios service out of region on a limited basis. Specifically, he said the company will look to deploy Fios service in neighborhoods that are adjacent to its current footprint. The company has already begun deploying fiber in certain neighborhoods around Dallas, where AT&T also provides service.

But Strigl emphasized that this was not a wide-scale change in strategy to take the Fios service out of region.

"What we are doing on a limited basis is, where it's economical, we are offering the complete Fios solution in neighborhoods next to ones we already serve," Strigl said.

He explained that these neighborhoods can easily be served by existing Verizon central offices, which means the capital expenditure to move into the neighboring area is minimal. He wouldn't say where, other than the Dallas area, Verizon had considered doing this. But he didn't rule out extending service into some areas in California, such as around Los Angeles.

Strigl also announced Wednesday that Verizon has upgraded the speed of its Fios broadband service across its 16 state region. The highest-tier service will offer 50 megabit-per-second downloads and 20Mbps uploads. Verizon had offered this upper tier of service in only a handful of markets previously.

The company has also doubled the upload and download speeds of its lowest-tier Fios broadband service. The service will now offer 10Mbps downloads and 2Mbps uploads.

LAS VEGAS--Verizon Communications is boosting speeds for its Fios fiber-to-the-home service, the company plans to announce Wednesday.

The company's COO Denny Strigl is expected to announce the speed upgrades during his keynote speech at the NxtComm trade show here. The upgrades come as Verizon customers use more bandwidth intensive applications such as video downloading and photo sharing.

"The appetite for bandwidth shows no sign of slowing down," Strigl said in a statement. "Neither will we. We've already had successful trials of the 100-megabit home, which will be a reality faster than anybody thinks."

As part of the upgrade, all Fios customers will now have access to download speeds of 50 megabits per second and uploads of 20 Mbps for about $140 a month. The company is also offering its symmetrical 20 Mbps download and 20 Mbps upload service to all Fios customers for $65 a month.

Verizon had already been offering these speeds in certain markets such as Connecticut, Massachusetts, New Jersey, and New York. But now the service will be expanded to Verizon's entire Fios customer base, which is spread throughout its 16-state territory. Previously Fios in these states, such as Delaware, Maryland, and Virginia, topped out at 30Mbps/15Mbps and 15Mbps/15Mbps.

Verizon will also upgrade its mid-tier offering increasing speeds from 15Mbps/2Mbps to 20Mbps/5Mbps. And the low-end service will increase from 5Mbps/2Mbps to 10Mbps/2Mbps.

Correction: This story misstated a quote from Tom Tauke, executive vice president of public affairs and policy for Verizon. Tauke said that it was in the best interest for the FCC to make a decision on the Comcast/BitTorrent case. He did not say that it was in the best interest for the FCC to make a decision against Comcast.

LAS VEGAS--Executives from AT&T and Verizon Communications said Tuesday that it's important for the Federal Communications Commission to take action in the Comcast debate over slowing down certain forms of peer-to-peer traffic in order to prove that legislation is not necessary when it comes to Net neutrality.

Jim Cicconi of AT&T (left) and Tom Tauke of Verizon (right) appeared on a panel together at the NxtComm trade show Tuesday.

(Credit: Marguerite Reardon/CNET Networks)

Comcast, the largest cable provider in the U.S., has been under fire for months after it was discovered the company had been slowing down peer-to-peer traffic on its network. The company claimed it had singled out peer-to-peer, file-sharing traffic, because it was eating up an inordinate amount of bandwidth, which caused degradation across the rest of its customers.

Consumer groups were incensed by the tactic, and the blogosphere filled with criticism. And as a result the FCC has been examining whether Comcast violated any of the agency's Net neutrality principles. A hearing was held earlier this year, and the FCC is expected to make a ruling on the matter sometime this summer.

Jim Cicconi, senior executive and vice president for legislative affairs for AT&T, and Tom Tauke, executive vice president of public affairs and policy for Verizon, told an audience at the NxtComm trade show here that it's important for the FCC to make a decision in this case to show that the agency's Net neutrality principles are enough to keep service providers honest.

"It's in the best interest of the industry for the FCC to make a judgment on the Comcast/BitTorrent case," Tauke said. "None of us want to be in a world where there is a sense that nobody is watching what is going on. We have the FCC and the Federal Trade Commission, which have authority to enforce some policies in this area. And if they do their jobs properly, they can make positive contributions on how the Internet develops."

Cicconi agreed, saying that the FCC has the opportunity to prove to Net neutrality supporters and Congress that it can enforce its own policies and keep the Internet open.

"The Comcast case has brought the debate over Net neutrality into specifics," Cicconi said. He added that this is important because up until now the discussion has centered on hypothetical problems. And creating new laws to deal with problems that haven't yet occurred could be disastrous for the industry.

LAS VEGAS--Executives from AT&T and Verizon Communications defended early termination fees for wireless customers Tuesday, but said they wouldn't oppose Federal Communications Commission rules that required these fees to be "reasonable."

Jim Cicconi, AT&T senior executive and vice president for legislative affairs for AT&T, and Tom Tauke, executive vice president of public affairs and policy for Verizon, said following a panel discussion at the NxtComm tradeshow here, that their companies are justified in charging early termination fees for wireless contracts, which often top out at $200.

The battle over early termination fees is heating up as wireless operators face multimillion-dollar class action suits from consumers who say these fees are unfair and deter competition. So far, wireless operators seem to have the upper hand in the battle, as a California state jury ruled in favor of Sprint Nextel last week in the first of these class action lawsuits.

But now, the FCC is considering taking jurisdiction over early termination fees. And the agency is considering a proposal from Chairman Kevin Martin that would require consumers be given a 30-day grace period to cancel their contracts without penalty. After those 30 days, early termination charges would then be prorated or reduced over the duration of the contract. Martin also proposes that fees should be based on the cost of the phone and that they should be "reasonable."

Cicconi and Tauke said that they are confident they could reasonably justify the cost of their fees, despite criticism from consumer advocates who say these fees are not used to recover costs but are merely used to deter customers from switching services. One industry expert who testified at a recent FCC hearing said that the early termination fees wireless operators charge are roughly 12 times higher than the cost of the actual phone subsidy they claim to be recovering.

"The fact is that it costs us hundreds of dollars more than the fees we charge to acquire a customer," Tauke said.

The executives also argued that consumers have many choices when it comes to the phones they buy and the services they subscribe to. Both carriers offer some phones at full price and allow customers to subscribe to month-to-month contracts, they said.

While AT&T and Verizon Wireless might offer some phones at full retail price in exchange for month-to-month service contracts, most of the hottest and most popular phones are not offered in this way. For example, the new 3G version of Apple's iPhone offered exclusively on AT&T's network can only be bought for the subsidized price of $199. AT&T also requires new iPhone users to sign up for a two-year contract. The previous version of the iPhone, which was not subsidized by AT&T, also required customers to sign up for a two-year contract with AT&T.

When asked why AT&T isn't giving consumers the choice of buying the new iPhone for the unsubsidized retail price without the constraints of a contract, AT&T's Cicconi had this to say: "Apple is providing the iPhone on these terms and conditions that it negotiated with AT&T. And if customers don't want to accept these terms, they can buy other devices."

While that's true, consumers still have no other way to buy this particularly innovative phone without agreeing to strict contractual terms from AT&T. This is despite the fact that AT&T said it has found its iPhone users to be among its most loyal customers.

"People have a choice," Cicconi continued. "They make decisions based on a lot of factors, like features and functionality of the phone and the terms and conditions under which that device is offered. Why should the government intercede on a deal that was struck between AT&T and Apple? I don't think the FCC should single out any one device in making policy."

Verizon's Tauke chimed in by saying that other industries also require term contracts.

"My gym requires me to have a year contract," he said. "The lawn service that cuts my grass has a one-year contract. Tivo requires a year service. This isn't unusual, and it's questionable that any government should regulate fees on any service."

This might be true, but there are many goods and services, particularly utility services, which don't require contracts. I've never had to sign a contract to get water or electricity. And I never signed a contract for my landline telephone service. I'm interested to hear what readers think about this issue. So please share your thoughts in the "Talk Back" section below.

LAS VEGAS--Mobility will be the key driver of growth for phone companies in the coming years as they expand their businesses to include new services like TV and broadband, AT&T CEO Randall Stephenson told attendees at an industry trade show here Tuesday.

AT&T CEO Randall Stephenson

(Credit: Marguerite Reardon/CNET Networks)

AT&T and the entire telecom industry have been transforming themselves over the past few years as traditional phone business slowly dies. No longer are these companies simply offering telephony, but they also offer TV, high-speed Internet, and wireless services. But it will be the mobilization of new services that will drive growth for companies in the next few years, Stephenson predicted during his keynote speech at the NxtComm trade show.

He used Monday's U.S. Open final as a perfect example of how mobility is changing usage. Stephenson said that he wasn't able to watch Tiger Woods clinch the U.S. Open golf title on his big screen TV at home, so he watched it on his mobile handset that uses the MediaFlo mobile broadcast TV service offered through AT&T.

He also made historical references to the Sony Walkman cassette player that essentially changed the music industry and made LP records obsolete. The same thing has happened to music yet again with devices like the iPod and now the iPhone, which allow people to take their digitized music on the go and even allow them to get their music wirelessly.

When devices and services are mobilized, Stephenson said, usage of all services shoots up. As an example, he said that even as AT&T's traditional phone business declines, voice minutes are growing 10 percent every year.

"As we mobilize services more things accelerate," he said. "We stimulate economic growth and drive prosperity on a global scale."

And as AT&T and other phone companies grow their video and broadband services, mobility will once again accelerate the market.

Today, roughly 2 billion people connect to the Internet. And by 2011 that number is expected to increase by another billion with most of these new broadband users coming from the developing world. But unlike the first 2 billion Internet users, these new users will access the Net from mobile devices, like Apple's new iPhone, Stephenson said.

With about 80 percent of the world's population living within range of a cell phone network, Stephenson believes the industry is poised for tremendous growth that will impact economies throughout the world.

"These are exciting times to be in this business and the industry," he said. "We are on the verge of an innovation explosion."

But he said that the industry must work through the challenges of a complex ecosystem to ensure the industry can deliver on its promise.

"The opportunity is fleeting in this business," he said. "Markets are moving fast. And not one us has the time for misfires or missed deadlines."