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Verizon today introduced a DSL replacement service, designed for rural users. Verizon’s LTE-based HomeFusion Broadband service can deliver download speeds between 5 megabits per second to 12 Mbps and upload speeds up to 4 Mbps. It is specifically intended for consumers living in places where DSL, cable modem or fiber-to-the-home broadband services are not available.

Users must buy an antenna that is professionally installed for $200. Verizon’s outdoor cantenna is essentially a fixed LTE antenna that communicates wirelessly with devices in the home. “The benefit of this antenna is it operates the spectrum extremely efficiently,” said Fran Shammo, Verizon’s CFO.

The HomeFusion Broadband service will initially be available later this month in Birmingham, Ala., Dallas and Nashville, Tenn. Verizon plans to roll it out to everywhere with LTE coverage by the end of the year.

Verizon will charge $59.99 a month for 10 gigabytes of data, $89.99 monthly for 20GB and $119.99 monthly for 30GB. Verizon will charge $10 per GB if customers go over their bandwidth limits.

Verizon’s chief competitor may be the CLEAR Modem with Wi-Fi ($99), which delivers truly unlimited WiMAX at 2.6 GHz for $49/month for homes or offices. The integrated wi-fi router provides broadband connectivity and local networking.

By comparison Verizon charges $40 per month for a 3 Mbps DSL service, notes C/Net. And it charges $55 a month for its 15 Mbps Fios broadband service, which also comes with a free Wi-Fi router.

ViaSat’s Exede provides satellite broadband at a fast 12 Mbps with a 7 GB monthly usage cap (up & down combined) for $50, a 15 GB cap for $80, and a 25 GB of monthly usage cap for $130.

A one-time set-up fee of $149.99 and $9.99/month equipment lease fee are required for the ViaSat broadband service, plus the monthly service fees and taxes.

Verizon’s HomeFusion service has better coverage than AT&T or Sprint, but it also comes with a data usage cap. If the household exceeds 10 GB, 20 GB or 30 GB of data per month, subscribers are charged an extra $10 per GB of data per month. AT&T says its average U-Verse user gobbles up about 21GB per month. That may indicate that a typical Verizon HomeFusion user may pay about $90/month for 20 GB.

I’m not dissing Verizon’s HomeFusion. It serves a niche and the pricing is in line with their cellular service. Clear isn’t likely to be a contender for rural users – it has limited coverage. But if you plan on using 25 GB/month, Clear would be cheaper at $50/month. ViaSat would cost more, about $130/mo. Verizon HomeFusion costs about $120/mo (for 30 GB).

Last month I used about 28GB on my $40/month Clearwire account. I watch maybe 3-4 Netflix movies a week. I would spend three times as much with Verizon’s LTE.

The big question is whether or not Clearwire will keep their truly unlimited data service when they go to TD-LTE. With 4×4 MIMO on a media hub, and 20 MHz of bandwidth, I bet it could pencil out. Verizon can serve 4-6 times more users on one 10 MHz sector at 700 MHz, but you get less pie. Verizon’s 700 MHz LTE is better for mobility. Clear’s 2.6 GHz LTE is better as a DSL/Cable Modem substitute or for offloading in urban centers.

Qualcomm’s newest chipsets support both Clearwire’s TD-LTE network and Verizon/AT&T’s FD-LTE with just a software switch. Their MDM9225 and MDM9625 LTE modems support both LTE Advanced (LTE Release 10) and HSPA+ Release 10, and are backward compatible with other standards including EV-DO Advanced, TD-SCDMA and GSM. China Mobile uses the TD-SCDMA standard. But those chips may not arrive until the iPhone 5, around October.

A lot depends on how Network Vision shakes out. Will AT&T get onboard Clearwire to offload their strained network? It’s Dish or Clearwire. Clearwire has compatibility with China Mobile, so AT&T could buy in with the iPhone5 or iPad. The iPad HD chip could tell the tale, but I’m guessing it will support only 700MHz LTE on this first iteration.

HomeFusion may have lots of applications besides serving rural users. For example webcasters may benefit from the penetration and upload speeds, it might also be installed in transit shelters, parks or public spaces. The $100/month service might be justified if revenue from advertising or subscription services could also cover the costs (although that does seem unlikely given Verizon’s service agreements).

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