ERF Seeks $20M in Recovery Act Funds

ERF Wireless Inc. says it will ask the U.S. government for around $20 million in broadband stimulus money to build out three separate WiMax projects in rural America.

The government released $4 billion of a planned $7.6 billion in broadband stimulus money last week. Now firms like ERF and Towerstream Corp. (Nasdaq: TWER) are planning to apply for grants and loans, as allowed by the Recovery Act. (See Small Wireless Firms Get Set for Recovery Funds.)

"We would be looking to go for something at least in the 20 million [dollar] range," Dr. H. Dean Cubley, chairman and CEO, tells Unstrung. He says that this could increase to $100 million if ERF can partner with other companies around stimulus package projects.

Cubley believes that League City, Texas-based ERF is working on wireless deployments that should qualify it for stimulus money.

“All of our networks and all of our operations are centered in rural America,” he says. The company’s deployments are centered round rural East Texas and the state of Louisiana. The company specifically works in towns with populations under 20,000 and rural farmland districts.

"Those areas are greatly underserved,” Cubley states. “It doesn’t pay for a commercial business to get into these areas... They will never get broadband unless it is brought to them with government help."

ERF is currently working on three separate wireless projects that Cubley thinks deserve some stimulus money. There are:

ERF has used various different wireless technologies in the past, but is now standardizing on WiMax for its future work. Cubley says most of its WiMax deployments will use 3.65 GHz spectrum with some 2.5 GHz radios too, depending on license availability. That should make network sharing, which is one of the mandatory clauses of the broadband stimulus agreement, relatively easy, at least with other small WiMax providers.

The company already has agreements in place that will help speed deployments. For instance, in Louisiana, the firm can use state police towers for radio deployments.

Cubley also says that the clause stating that companies have to match 20 percent of the grant or loan given in stimulus money isn’t a problem for ERF. “It doesn’t pose any great concern for us, we have adequate funding,” he says.

— Dan Jones, Site Editor, Unstrung