A representative for Clearwire confirmed to PhoneNews.com today that inactive CLEAR iSpot 4G modems are, as of now, glorified bricks. They cannot be reactivated on any Clearwire service, nor can they be converted to standard Clear Spot devices.

This follows on our reporting, early this morning, that Clear iSpot devices on suspended monthly service plans have until February 10 to reactivate service, or face their devices being similarly bricked.

In Clearwire’s defense, the company does rightly note that the iSpot is an antiquated WiMAX modem. More modern devices like the Clear Spot Apollo provide superior reception, and faster connection speeds.

Clearwire also affirmed that users who maintain active service accounts can continue to use their groundbreaking, $25 per month unlimited WiMAX data plans. However, as Clearwire has cautioned previously, they cannot support future iOS devices (or even current models) due to Apple’s attempts to thwart the iOS-device-only plans. As we covered in our previous report, Clear iSpot faced several market issues, largely interference from Apple, that prevented iSpot from working with current and newer Apple iOS devices, without forcing Clearwire to offer Internet to unplanned devices such as MacBooks and iMacs.

However, it is rare for a wireless provider to completely deactivate devices, rendering them useless, before a network technology becomes obsolete. Clear iSpots, as the Clear Spot models they are based off of, are Mobile WiMAX Wave 1-compliant devices. Despite being inferior to newer WiMAX modems, the devices are fully-functional, and capable of providing Internet service with Clearwire’s network today.

It appears, though Clearwire did not elaborate, that they are simply trying to close the door on the failed iSpot devices. With rooting and other exploits readily available, Clear iSpots have been sold for hefty premiums on sites like eBay. PhoneNews.com has seen iSpot units sell for between two and four times the original no-contract price-point of the device. The reason is simple; a rooted iSpot can access Clearwire’s WiMAX network at half the standard price-point for unlimited mobile 4G data.

The iSpot wind-down also points to another failure of WiMAX as a technology, to usher in a future of unlocked device compatibility. Both Sprint and Clearwire, the two major WiMAX providers in the United States today, touted that their WiMAX networks would support activation of foreign WiMAX devices. However, neither Sprint nor Clearwire permit activation of each-other’s devices, despite running on compatible networks.

It appears that Clearwire Corporation is giving iSpot customers less than 72 hours to sign up for new service.

The carrier quietly let customers who have iSpot accounts in suspended animation (or inactive status) know that they have until February 10th to reactivate their service, otherwise their accounts will be terminated. The more shocking news in the email to customers is that after the 10th, any lapse in service will make it impossible to reactivate the iSpot in the future.

The Clear iSpot was Clearwire’s attempt to draw in Apple iOS customers, many of whom were facing metered data on carriers such as AT&T. The device was a firmware-modified version of the original Clear Spot, which featured an unlimited $25 per month 4G WiMAX plan, running at 6 mbps down, and 1 mbps up.

However, Clearwire faced several challenges that ultimately forced them to pull the product from the market. Apple, not having certified the device, began randomizing the MAC (network serial number) address ranges of iOS devices, and used ranges previously reserved for Macintosh computers. This left Clearwire in a bind, many iOS customers could not use iSpot.

For Clearwire to have allowed all iOS devices under the new MAC addresses, would have also required Clearwire to let Mac users have unlimited data for $25/month. Worse, some Mac models were already able to access the iSpot’s data plans, having MAC addresses close enough to the original iOS range, and were hampering the Clearwire network excessively.

To add to Clearwire’s woes, hackers quickly rooted the Linux-based iSpot, and removed the MAC address restrictions. Web sites even rolled out one-click rooting processes. Even if Clearwire were able to patch these firmware loopholes, it would not fully fix the problem. Jailbreakers had figured out how to use an $80 first-generation iPod touch as a relay router, feeding iSpot’s Internet to any computer, which could in-turn power a whole household with Internet for $25 per month.

The company did make clear though that anyone who keeps a Clear iSpot active going forward will be grandfathered into the $25/month plan, provided they maintain continuous service going forward. This will likely remain until Clearwire shuts down the Clear WiMAX network, expected by outsiders sometime within the next 12 to 72 months. Clearwire has not yet given any timeframe for when they plan to roll out their LTE network fully, and when they plan to dismantle their WiMAX network.

Clearwire is clearly trying to close the door on iSpot. We have emergency calls into Clearwire as to if fully-deactivated iSpots can be reactivated at this late time, or if only those on hibernation plans can reactivate. We’ll update this report when we hear back from Clear.

Update: Clearwire has confirmed our initial report, which we have expanded on in a follow-up article.

Clearwire confirmed to PhoneNews.com today that they have stopped activating new service for customers in pre-WiMAX markets. This does not affect markets that are selling CLEAR 4G WiMAX coverage, nor does it affect any customers who have already enrolled in Clearwire pre-WiMAX service.

The legacy, pre-WiMAX technology dates back to Clearwire founder Craig McCaw’s vision of delivering broadband Internet wirelessly, with a focus on delivering broadband to rural markets that do not have easy access or multiple choices for broadband Internet service.

Originally, Clearwire told PhoneNews.com that it expected all pre-WiMAX markets to get a quick upgrade to WiMAX. It’s a story, and timetable that we followed closely, being that this article is being written from one of the Clearwire markets that is still stuck in pre-WiMAX coverage. That coverage provides speeds up to 3.0 mbps, but lacks modern interfaces… like USB… or even ExpressCard. The only devices that work with the service, are bulky modems designed for fixed wireless, or a PCMCIA/CardBus card (we don’t even have a laptop that has that slot anymore).

Rural customers though persisted, we met multiple customers lined up at iPhone launches that ran their Clearwire pre-WiMAX gear in their car, powered into routers… all being driven by a DC power inverter. Unfortunately, the lack of a simplistic, consumer-friendly solution ensured that only the tech-savvy, and desperate, really took full advantage of these pre-WiMAX offerings.

The technology gap underscores Clearwire’s painful migration from pre-WiMAX, to WiMAX, and now to LTE. The changes in network hardware have prevented Clearwire from having one consistent technology to market to rural and urban customers alike. Clearwire’s majority owner, Sprint, pushed Clearwire to abandon its rural transition goals, in order to focus on rolling out WiMAX in coveted urban markets as quickly as possible.

Now, customers in these rural markets will have to wait until late this year, when Clearwire will unveil its LTE network. It is not even assured that these markets will be upgraded at that point. After missing its 2010 timetable for rural market upgrades, pre-WiMAX customers have been given no guidance from the company, other than to stay tuned to press releases and email updates.

Clearwire continues to struggle. While receiving a cash infusion of a billion dollars from Sprint, largely under pressure-and-observations that Sprint was betting on Clearwire to fail, the company now is working hard to develop an LTE wholesale network, as well as prepare to upgrade CLEAR 4G customers to an LTE Advanced-ready network platform.

Following a December filled with changes to its business model in the wake of its forthcoming transition to LTE while continuing to support WiMax until its planned switchover, Clearwire has posted its preliminary fourth quarter 2011 financial results, which see slight improvements in terms of year to year revenue, immediate cashflow and operating profit but still have a long way to go before reaching a self sustaining level without relying on further debt sales, of which a new round of secured notes will be offered that will total $300 million. Read more for the breakdown.

Starting with quarterly revenues of approximately $362 million are estimated for fourth quarter 2011, representing a more than doubling of revenues from the fourth quarter of 2010. Retail revenues are estimated to be approximately $198 million and wholesale revenues are estimated to be approximately $164 million for the period, representing 1% and 20% sequential growth, respectively, over third quarter 2011 retail and wholesale revenues which were a marked change from the losses of the third quarter triggered by the continuing economic slowdown and then active expedition for outside funding to continue operations before the Fall 2011 debt sale.

Fourth quarter 2011 net wholesale subscriber additions are expected to total approximately 900,000 customers, resulting in approximately 9.1 million total wholesale subscribers, or 11% growth over third quarter 2011 wholesale subscriber numbers. Added to the approximately 1.3 million retail subscribers at the end of the year, the company expects total subscribers as of December 31, 2011 to be approximately 10.4 million, representing approximately 140% year over year growth in new subscribers.

Network usage by wholesale customers increased approximately 22% compared to third quarter 2011, driven primarily by growth in smartphone usage, which increased approximately 30% over the same period. Total 4G network usage by wholesale and retail customers increased 165% during 2011 compared to the same period in 2010. Clearwire has also estimated that cash on hand and cash equivalents and investments as of December 31, 2011 were approximately $1.11 billion compared to $711 million at September 30, 2011, an extensive increase from its previous holdings which were at risk of being depleted at the beginning of 2011.

Excluding net proceeds from the issuance of additional shares of $716 million and payment of $237 million interest on debt in December, cash utilized during fourth quarter 2011 was approximately $82 million, which is a marked improvement from the ~$100 million plus used in the third quarter before the aforementioned debt sale in the wake of being unable to find outside investment since the fourth quarter of 2010, when it was soliciting offers and seeking outside investment to continue day to day operations before former partner Sprint stepped up with lifelines to keep Clearwire running in the Fall.

With Clearwire’s August 2011 transition to a flat-rate model with no agreements, Clear WiMax service is helping to fund the company’s transition to LTE along with a new wholesale agreement reached with MVNO infrastructure provider Simplexity announced yesterday in order for Clearwire to make the process of reselling services to new wholesale customers easier, though the company will still handle direct wholesale transactions for those that prefer to have a direct connection to the company.

Clearwire is currently providing wholesale services to sprint for its lineup of WiMax devices, with Sprint transitioning to LTE beginning in the middle of the year and no new WiMax devices planned for release after the forthcoming launch of the Sierra Wireless Tri-Network Hotspot later this year ahead of Sprint’s LTE network launch. Clearwire will post complete results in the following weeks.

Clearwire has added a new flat-rate access plan to their new contract-free service lineup with a new $35 monthly plan at 1.5Mbps down and 0.5 Mbps up that features no monthly caps, meant for mobile and home use.

The new plan follows the move to WiMax only service and flat-rate unlimited service for $50 earlier this quarter, spurred by its recent moves to transition to LTE and to shore up expenses and other capital as it faces the decision to either pay on a forthcoming $237 million debt covenant or default on it.

Should it decide to delay the debt payment, it has a 30 day grace period it can exercise, but doing so would place it in a technical default.

As Clearwire currently holds $700 million in cash on hand, it is not known how long it can continue short-term operations with its current cash reserves while it continues to search for additional funding.

Meanwhile, Sprint is still mulling over assisting Clearwire in the short term with no confirmation as of yet, though both companies are expected to announce a new three year agreement to continue its current wholesale access agreement, which expires at the end of the year.

United Online, the parent company best known for creating and developing the NetZero family of online services has announced a new resale deal with Clearwire whereby the NetZero brand will be expanded to offer mobile WiMax service with two new modems and monthly service.

While more specific details such as pricing and availability have yet to be confirmed, the announcement of the wholesale deal marks the first wholesale deal after Sprint confirmed its plans to move away from Clearwire’s 4G WiMax services as a wholesale customer in favor of its own LTE network next year. The deal is set for five years beginning in 2012 and was enough to send Clearwire’s stock up 7 percent following the news ahead of its earnings call later today.

The new deal also follows months of trepidation and doubt surrounding Clearwire’s viability due to funding and network expansion issues as well as its plans to roll out LTE service in 2012 and LTE-Advanced in 2013 should the company be able to raise the $600 million necessary to build out the LTE-Advanced network while signing a technology development deal with Sprint also related to LTE deployment. Clearwire also recently made major changes to its Clear service, eliminating service agreements and 3G/4G hardware in favor of flat-rate monthly prepaid service at $50 a month.

After months of tribulation culminating in the move to LTE and the increasingly marginalized position of WiMax in the world, Clearwire has confirmed that it will eliminate postpaid agreements moving forward and will also cease sales of 3G/4G dual-mode devices as of yesterday via Clear’s refreshed portal. It will instead offer a flat-rate prepaid monthly rate of $50 per month with its current line up of 4G only hardware for both home and mobile service. Continue reading for a screen shot of the new plans.

Clearwire is currently in the preliminary stages of setting up its current infrastructure for the transition from WiMax to LTE, with plans to roll out LTE-Advanced contingent upon the funding being available in order for the build out to be completed during 2012 into 2013.

As a result, Clearwire’s latest moves signal the beginnings of that transition after years of being closely linked with Sprint as its largest wholesale partner, though the elimination of dual-mode devices also signals a further change in the relationship between both companies, becoming increasingly strained in the last few months as Sprint prepares its network for LTE via its network hosting agreement with LightSquared, though both companies have signed a new short-term agreement to continue the current wholesale arrangement during Sprint’s own transition and roll out of LTE by using Clearwire’s planned LTE network as additional capacity, identical to the current agreement for WiMax service.

Clearwire leaders stated to PhoneNews.com on background that they planned to have all non-WiMAX markets upgraded by 2011. That was before the bottom fell out of WiMAX.

Fast forward to today, Clearwire has apparently halted all plans to expand WiMAX beyond its current coverage footprint. Clearwire, Sprint, and LightSquared are all putting together plans to roll out LTE in some wholesale concert, and WiMAX will remain in its current footprint, likely for years to come.

That leaves dozens of Clearwire deployments stuck in a painful limbo; LTE Advanced-ready hardware is likely a year out, at least, for many of these markets. And, worse, Clearwire has no intentions to upgrade these markets to WiMAX in the interim. Urban markets with existing WiMAX service will likely be the first to be upgraded. To help ease the pain, Clearwire to their credit has recently cut prices for service in these markets.

For users in these pre-WiMAX markets, service has fallen to a flat $32.00/month for 1.5 mbps and 2 mbps price tiers (for desktop and mobile cards, respectively). Unfortunately, the “mobile” ExpressCard and PCMCIA cards, as well as their desktop counterpart are the same dated cards from Motorola, which Clearwire was using four years ago.

With a lack of USB, or Mobile Hotspot options, many users are left toting desktop Wi-Fi adapters around to gain a connection which can be used with their modern-day devices. The demand for Clearwire service in most of these markets has dropped significantly as EV-DO and HSPA coverage has overlapped much of the legacy Clearwire footprint. With unlimited data plans and tethering, many users simply have no need for Clearwire’s services.

Despite Clearwire’s stated intentions to maintain, but not grow its store footprint, this lack of demand in legacy markets has resulted in the closure of most non-Clear 4G area retail stores.

Still, in many rural areas where Clearwire initially became popular, the offering is still a welcomed relief for users who have no access to DSL or other high-speed connections. 2 mbps is often multiple times faster than IDSN or low-speed ADSL connections, due to many still being long distances from a Central Office or DSL repeating station. Satellite Internet remains far more costly, and far more throttled than Clearwire’s own throttling endeavors.

Pre-WiMAX hardware is still sold at retail stores, by Best Buy, in Clearwire markets that have not been upgraded. The hardware is not sold online except via Clearwire.com, when entering in a zip code of a pre-WiMAX market.

Clearwire has declined to comment to PhoneNews.com officially, in regards to the estimated time of delivery for upgrading pre-WiMAX markets. The company did, however, confirm the price decrease to PhoneNews.com.

Article has been updated to clarify that Clearwire did offer an ExpressCard offering for pre-WiMAX markets. However, this variant is no longer publicized for sale, and can only be found by contacting Clearwire via telesales. Neither PCMCIA nor ExpressCard pre-WiMAX cards are compatible with Linux or Mac OS X.

Article has subsequently been updated with official comments from Clearwire Corporation.

Clearwire has announced that it intends to support LTE Advanced within its core network infrastructure by building on its recently concluded Phoenix, Arizona based trials and entering into new agreements with wholesale partners ahead of an eventual commercial launch within the next 18-24 months.

The current WiMax cellsite network will be upgraded with LTE Advanced equipment in preparation for the rollout of LTE, but the company stresses that it will continue to support WiMax and that the move to add LTE Advanced compatible equipment is meant to expand its wholesale business.

Clearwire’s current spectrum holdings, once fully deployed using LTE Advanced will allow it to surpass current FDD LTE based networks utilized by both Verizon Wireless and MetroPCS by allowing for speeds of up to 120Mbps on the downlink and 25Mbps on the uplink using a TDD based LTE network using 2×2 and 4×4 MIMO antennae arrays along with 20MHz channels for data transmission on the 2.5GHz band, much wider than the current 10MHz channels for data transmission used by both Verizon Wireless and MetroPCS for deliving LTE access to their customers on their respective transmission bands.

This means that Clearwire has chosen LTE Advanced as its future 4G standard for wholesale access while currently supporting 4G WiMax services ahead of the eventual transition and for the foreseeable future as the consumer level offering, with the goal to sell LTE access to MVNOs for resale and businesses looking for high bandwidth high capacity data access with low latency.  Below, comments from the executive team.

“Clearwire plans to raise the bar again for mobile broadband service in the United States,” said John Stanton, Clearwire’s Chairman and interim CEO. “Our leadership in launching 4G services forced a major change in the competitive mobile data landscape. Now, we plan to bring our considerable spectrum portfolio to bear to deliver an LTE network capable of meeting the future demands of the market.”

“This is the future of mobile broadband,” said Dr. John Saw, Clearwire’s Chief Technology Officer. “Our extensive trial has clearly shown that our ‘LTE Advanced-ready’ network design, which leverages our deep spectrum with wide channels, can achieve far greater speeds and capacity than any other network that exists today. Clearwire is the only carrier with the unencumbered spectrum portfolio required to achieve this level of speed and capacity in the United States.”

“In addition, the 2.5 GHz spectrum band in which we operate is widely allocated worldwide for 4G deployments, enabling a potentially robust, cost effective and global ecosystem that could serve billions of devices,” Saw added. “We anticipate that the economies of scale derived from this global ecosystem will act as a catalyst for the development of thousands of low-cost devices and applications. And, since we currently support millions of customers in the 2.5 GHz band, we know that our LTE network won’t present harmful interference issues with GPS or other sensitive spectrum bands.”

Clear has announced the launch of a new Clear Spotn modem in the Apollo 4G. The modem will be available later this week for a monthly lease of $6.99 per month or $19.99 after signing a new 2 year agreement for service. Full retail cost of the modem is $99.99 and features support for up to 8 Wi-Fi enabled devices with a display showing signal strength and the number of devices connected.