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Clearwire CEO Bill Morrow has resigned.  (Source: PCMag.com)
CEO cites "personal reasons" for resignation, suit likens Clearwire's throttling practices to "Ponzi scheme"

Clearwire announced yesterday that its director of the board and CEO has resigned for personal reasons. 

John Stanton, chairman of Clearwire’s board of directors, will replace outgoing CEO Bill Morrow on an interim basis. Morrow will advise the company while it searches for his permanent replacement.

The company's chief commercial officer and chief information officer are both leaving as well. Meanwhile, the role of chief operating officer has been created and filled, and a new CFO has been promoted.

Clearwire is a partner with Sprint (which owns part of Clearwire) in its WiMAX 4G network.

"Today’s changes in executive leadership are not expected to impact the company’s progress on an agreement with Sprint to resolve wholesale pricing disputes," the company said in its press release. "Clearwire believes that an agreement with Sprint is imminent."

The shakeup, though, comes just as a class-action lawsuit against Clearwire and its throttling practices has been filed. The suit, filed earlier this month in U.S. District Court, compares the company's throttling of data speeds (at times to as slow as 256kbps) without alerting its users of how or why the throttle was in place to a Ponzi scheme.

An excerpt:

Clearwire's practice is akin to a bandwidth Ponzi scheme in the sense that Clearwire advertises and sells a service, knowing in advance that there is no way it can provide such service on an ongoing basis -- i.e., Clearwire sells subscriptions prior to build-out of sufficient infrastructure to support the "High Speed Internet" it advertises. Someday, if Clearwire sells enough subscriptions, it may have sufficient funds to go back and create the infrastructure to support its Internet service and make good on its promises.

DSLReports' user forums have been full of complaints of Clearwire's throttling practices.

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Lawsuit will fail
By FITCamaro on 3/11/11, Rating: 0
RE: Lawsuit will fail
By CZroe on 3/11/2011 12:46:58 PM , Rating: 3
Traffic shaping is an issue there too.


RE: Lawsuit will fail
By Motoman on 3/11/2011 12:48:34 PM , Rating: 4
Well, I think they might have a case at least for areas where they didn't really even have the infrastructure in place to do it anyway...

...but this is perhaps case-in-point as to why the US needs to follow the UK's lead on re-defining how bandwidth can be advertised and sold.

Realistically, internet services should probably be sold based on a minimum guaranteed bandwidth. Maybe on an average. Any kind of range, or "up to" bandwidth, is really pretty useless.


RE: Lawsuit will fail
By DanNeely on 3/11/2011 1:11:49 PM , Rating: 2
Agree. Doing that is one of the things I like best about my small town/rural cable co. Their speeds aren't as fast as you can get in more urban areas, topping out at 15/1.5; but they actually deliver the all of what they offer. My up/download rate is as likely to be 5% over the advertised as it is 5% under; and is almost never less unless the other end is bottlenecked.


RE: Lawsuit will fail
By Hyperion1400 on 3/11/2011 2:36:10 PM , Rating: 3
http://xkcd.com/870/

"Mathematically Annoying Advertising"

God I love XKCD


RE: Lawsuit will fail
By Helbore on 3/11/2011 12:49:03 PM , Rating: 3
That's all well and good if you are being limited by things such as cable length and quality, as you see in xDSL-based broadband products. eg. you can get up to 24Mb broadband, dependant on your distance from the local exchange and the quality of the copper running from there to your premises.

That doesn't, however, mean that an ISP suddenly has the right to artificially cap your connection to a lower level, nor does it mean they can get away with putting in a network that is actually incapable of providing up to the advertised speed.

If customers are having their bandwidth artificially throttled and there are no terms and conditions stating that this may occur under specific circumstances (eg. monthly download caps), then the ISP has no right to use the "well it does say 'up to....'" excuse. Same goes for if they have failed to provide the necessary infrastructure to support the advertised speed.

I could say that my home network provides up to 24Mb broadband services, based on the fact that I have got a 24Mb ADSL2+ line. But I wouldn't get away with selling such a service, because my network infrastructure could necver support thousands of customers using it at that speed. Aure, only getting 4k download speeds fits in with my statement of "up to 24Mb broadband," but I knowingly sold a product that I knew was incapable of reaching the potential advertised speeds.

Of course, if this is just about people complaining because their speeds aren't as good as they hoped when they're at a long distance from an antenna, or that they're in a region without WiMAX coverage, then I'll agree with what you said. But then the article doesn't seem to be suggesting that is the reason for this suit and that its to do with artificial caps and insufficient infrastructure. In which case, they deserve to be sued for conning money out of their customers.


RE: Lawsuit will fail
By Dug on 3/11/2011 6:41:01 PM , Rating: 1
You are misinformed.
I was one of those people that got throttled. I live less than a mile from one tower and 2 miles from another. Speeds were exactly as advertised. After hitting 5GB I was throttled down to 56k just like clockwork. No amount of calls allowed me to get bandwidth back until the next billing period. Even though I was paying for unlimited. Come the first of the month, they were back. Then again at 5GB I was throttled. On my last call before cancelling I was told it is unlimited data. Just that I don't get the speed after 5GB. That is false advertising.


RE: Lawsuit will fail
By Lerianis on 3/13/2011 5:04:06 PM , Rating: 2
Exactly right, Dug. The fact is that if they advertise something as UNLIMITED and AT A CERTAIN RATE, it should be unlimited period and done with and at that certain rate.... not up to 5GB's then you are throttled.

Really, I would like to see bandwidth caps in and of themselves declared illegal. There is just no necessity for them unless you are OVER-PROMISING on what your network can deliver for everyone.


RIP Clearwire
By Chaser on 3/11/2011 11:56:46 AM , Rating: 2
Sprint, time to switch to LTE.




RE: RIP Clearwire
By cubdukat on 3/11/2011 2:33:31 PM , Rating: 2
Supposedly they're planning on that contingency. Their relationship with Clearwire has been anything but rosy.

But I wonder what'll happen to all those people with Evos and other current 4G phones, because I suspect the current WIMAX-based system is incompatible with LTE.

I would hope they'd let you cross-grade to an LTE-compatible Evo or similar phone with no additional charge, or at the least offer you a new phone at greatly reduced price and waive all the upgrade red tape. This would be a headache Sprint doesn't need.


RE: RIP Clearwire
By sleepeeg3 on 3/11/2011 8:16:27 PM , Rating: 2
I have used Clearwire. Download speeds seemed to be on par with what they advertised (1500kbps), however there was major latency and browsing was cumbersome. They also tried to rip me off on the return of the $150 modem that was accidentally purchased. Additionally, they try to force you to buy their hardware by locking out previously registered modems, so buying a used one on eBay saves you no money.


What a horrible Company
By MHz Tweaker on 3/13/2011 11:01:35 PM , Rating: 3
I used them for 18 months until I could get DSL in my area. The first week of use was at full speed but after that they throttled my downloads by like 90%. It was so bad that it was just about like using dialup. They also signed me up for a 2 year contract instead of a single year. I purchased my equipment outright to get the 1 year deal but they still signed me up for 2 years? Clearwire also called to threaten me when I started downloading things. It seemed their network was built for little more than web browsing and cannot handle downloading things like service packs or CD images. I installed DSL and told them what they could go do with themselves and how often to do it. They told me I needed to return the equipment I purchased and pay them hundreds of dollars. I refused. For three months they called my home, business and cell phone up to 30 times a day terrorizing me. Some times the calls were just a few minutes apart from both known and blocked ID's. Their tactics were relentless and obscene. I work in the I.T. field and warn everyone I can and tell people my experience with Clearwire. I really would like to get in on this class action suit myself. In the end I actually considered hurting someone at Clearwire the phone abuse was so bad. Clearwire is without any doubt the largest group of thieves under a corporate logo I have ever dealt with.




By RedemptionAD on 3/11/2011 3:05:55 PM , Rating: 2
.




In other news....
By nvalhalla on 3/11/11, Rating: -1
"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer

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