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Mixed fortunes for wireless in US broadband plan

Two years ago, when the US was one of the first countries to outline an economic stimulus plan, universal broadband took a major role, and wireless wa


Published: 16 December, 2010


Two years ago, when the US was one of the first countries to outline an economic stimulus plan, universal broadband took a major role, and wireless was expected to be a key beneficiary. As the grants and loans have rolled out during 2010, the wireless industry has been largely disappointed, gaining a far smaller slice of the pie than anticipated as fiber took the lion’s share, even in very rural areas. Among last mile projects, only 5% of awards in the first round, and 15% in the second, went to wireless, while 50% were for fiber-to-the-home projects.

However, there was a significant number of wireless projects, with WiMAX the key technology in play. WiMAX companies received $504 million of stimulus funds for last mile projects – by far the largest share of wireless grants and a significant boost to the platform. The half-billion dollar pot will be split between 40 awardees from 22 states.

The timing was better for WiMAX than LTE, because it was already commercially available while the stimulus award applications were being considered – and most came with tight roll-out deadlines. However, LTE may get its own opportunity, riding on the back of Verizon Wireless’ 4G deployment, and its program to expand into rural regions through alliances with small local cellcos. This involves leasing small operators 700MHz spectrum to build a network, which will then give the national carrier rural access and roaming. It has signed its first deal with Bluegrass Cellular of Kentucky, and SI Wireless may well be the second supporter, in its territories in Illinois, western Kentucky and most of Tennessee.

Other rural players want to do LTE in their own right. Cellular South commented recently that it “will focus on building its own business, not helping Verizon expand its network”, and it is due to go live with its own network within a year, in parts of its main service area in Mississippi. In 2008, it paid $192 million for its 700MHz spectrum and has called on the FCC to mandate device interoperability across the whole 700MHz band, so that, for instance, Verizon’s phones would also have to work on its spectrum (in band 12).

Also rolling out LTE, this time in rural Michigan, is Agri-Valley Communications, which is working in 700MHz with Nokia Siemens, while CenturyLink is using the 4G technology purely for fixed broadband in various remote areas, and CommNet Wireless has a stimulus award to bring LTE to the Navajo Nation in Arizona, New Mexico and Utah.

For WiMAX, there are seven stimulus funded rural broadband projects underway, plus a large number of operators doing the same with their own financing. Most of the roll-outs are in the highly fragmented 700MHz band, where there are hundreds of local licenses issued during two rounds of auctions; or in the lightly licensed 3.65GHz band, which WiMAX has virtually claimed for its own. A few players are using spectrum in 2.5GHz, where there are also many local holders. Clearwire, of course, is the largest player in this band, and has some rural activities despite a mainly urban/suburban focus, and it also has leasing deals with many small spectrum owners. Of the operators deploying in 2.5GHz in their own right, the most prominent is probably Digital Bridge, which was a major winner of stimulus funds and will offer WiMAX services in Mississippi, Indiana and Idaho, plus non-stimulus projects in Idaho and South Dakota.

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