Recovery Act: The Undecided Remain
The government recently released $4 billion to promote the deployment of wired and wireless broadband in under-served areas of the country. (See Biden Boosts Broadband.) While smaller WiMax operators are eager to get in on the Recovery Act, others are still working through the guidelines to decide if they want -- or can qualify for -- a grant or loan by Aug. 15. (See Recovery Act: A WiMax Windfall.)
Case in point: CenturyLink Inc. (NYSE: CTL), which wants to roll out a Long Term Evolution (LTE) network aimed at rural customers in 2010. It would seem a strong potential candidate, but the carrier is still looking at its options. (See Will the 700 MHz Auction Create as Much Effect as Fanfare?) "We just don't know yet," a company spokesman tells Unstrung Wednesday. "We're still evaluating the notice that came out at the end of June."
Open Range Communications Inc. , another rural WiMax operator is unsure if it will ask the government for more money. The operator already got a $267 million loan from the United States Department of Agriculture's Rural Development Utilities Program (RDUP) in March 2009 and then secured $100 million in private equity funds to get the loan released. (See Small Wireless Firms Get Set for Recovery Funds.) "It is unknown whether Open Range will apply for more government funding," a company spokesman tells Unstrung.
There are several factors in the Act that may be holding companies large and small back from applying for broadband grants or loans. For small carriers, the companies must provide matching funds of at least 20 percent toward total eligible project costs. For larger carriers, accepting the money invites scrutiny of their interconnection, nondiscrimination, and network management practices, a headache some operators would prefer to live without.
— Dan Jones, Site Editor, Unstrung