Clearwire May Block VoIP Competitors

Someday, customers of wireless broadband provider Clearwire Corp. may be able to use Voice over IP services. But right now, Craig McCaw's newest company is giving its customers the silent treatment by apparently blocking outside VoIP providers from its network.

In what the company claims is an effort to preserve the performance of its pre-standard WiMAX network, Clearwire says it reserves the right to prohibit the use of a wide range of bandwidth-hungry applications, a list that apparently includes VoIP as well as the uploading or downloading of streaming video or audio, and high-traffic Web site hosting. According to the company's terms of service, Clearwire reserves the right to restrict access or terminate service to customers who don't comply with its rules.

While a company executive claimed the restrictions were necessary to ensure network performance reliability, Clearwire could not explain how that issue would be resolved when it offers its own VoIP services in the near future. Earlier this month, Clearwire signed an agreement with Bell Canada under which Bell Canada will provide VoIP systems and services for Clearwire, at a date and price yet to be announced.

But current Clearwire customers may have difficulties if they try to use the network for independent VoIP services. At least one customer of Vonage Holdings Inc.'s VoIP service has reported an incident of having the service blocked by Clearwire, according to Brooke Shulz, vice president for corporate communications at Vonage. According to Shulz, when the customer asked why the service didn't work, a Clearwire representative told the customer that they couldn't use Vonage over Clearwire.

Gerry Salemme, an executive vice president at the Kirkland, Wash.-based Clearwire, said he wasn't familiar with the specific case involving Vonage, but did say that Clearwire reserved the right to restrict access to applications over its nascent service in order to preserve overall network performance. According to Salemme, some technologies used by Vonage and other VoIP providers "are problematic for wireless networks, versus a wired network." And, he added, "there are limits to what [traffic] any network can carry." Applications like Vonage's VoIP, Salemme said, "could hurt the other customers [on the Clearwire network], bring down the other customers."

While the company's terms of service do not specifically list VoIP as a prohibited application, Salemme said he couldn't comment on why or why not Clearwire might have blocked Vonage's service, adding that he had never read his own company's terms of service.

Vonage CEO Jeffrey Citron, who has argued that service providers should not arbitrarily block applications, expressed displeasure at Clearwire's rules.

"It's in [Clearwire's] terms of service," Citron said of Clearwire's plans to restrict certain applications. "But that doesn't make it fair and right."

Clearwire did not respond to a request for additional technical information about how VoIP affects their network, or about more specifics on the Vonage blocking incident, or whether the company had prohibited any of its customers from using streaming audio or video. Clearwire, which currently offers service in four U.S. markets -- Abilene, Texas; St. Cloud, Minn.; Jacksonville, Fla.; and Daytona Beach, Fla. -- plans to launch services in as many as 20 U.S. cities by the end of the year. While he did not offer any details on the expected arrival or pricing of Clearwire's own VoIP service, Salemme did say that VoIP "is a very important part of our portfolio, and we want to get it out there as quickly as possible." Salemme said Clearwire chose Bell Canada's offering based on its technical merits, which he said the company deemed superior to those currently available, such as the CallVantage service from AT&T. As part of its agreement, Bell Canada also invested $100 million in Clearwire, and will have a representative on Clearwire's board. Intel Captial, the chip company's venture arm, has also invested in Clearwire.

According to Vonage, it was able to resolve its customer's issues by changing the SIP port number for the end-user device. After the change, the customer was able to use Vonage's service again, Vonage's Shulz said.

While Vonage said it is still investigating the Clearwire blocking occurrence, it does not yet intend to contact the FCC, as it did in a previous blocking incident. Since Clearwire is not a traditional telephone service provider, it is unclear what, if any, legal recourse Vonage might have. In fact, Clearwire's terms of service claim that its service is "not a telephone service," and as such may limit users' "rights of redress before federal, state or local telecommunications regulatory agencies."

In February, Vonage confirmed that it had complained to the FCC about a case where a regional telephone service provider was blocking its service by closing off broadband network connections to Vonage equipment. The FCC reached a consent decree with the company, Madison River Communications of Mebane, N.C., under which Madison River agreed pay a $15,000 fine for its actions, and agreed to never attempt to block VoIP services again.

Since sophisticated, packet-level network-management tools allow adminstrators to determine the types of traffic flowing across their networks, it's possible for network operators to "block" or otherwise degrade the service for specific types of traffic. Some applications, like Vonage's, also use well-known connection parameters (or ports) for their services, making them even simpler to stop. Mobile Pipeline editor David Haskin contributed to this story.