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Recovery Act: WiMax Hunts for Broadband Bucks

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor
9/24/2009

Clearwire LLC (Nasdaq: CLWR) wants nearly $40 million in its "modest" bid for broadband-related Recovery Act money, while many other WiMax providers are asking for a mix of big and small grants and loans.

The Kirkland, Wash.-based operator's subsidiary, Clear Partner Holdings LLC, has applied for two grants under the Last Mile portion of the Broadband Technologies Initiative Program (BTOP). The operator wants $19.4 million to bring broadband to "underserved communities" within 112 square miles of Detroit, Mich. It has also asked for a $20.3 million grant to "help to remedy the problem of limited broadband adoption, availability and affordability by underserved consumers, public safety agencies and educational institutions" in the San Juan-Caguas area of Puerto Rico. (See Recovery Act: Clearwire Reveals Plans.)

Clearwire is by no means the only WiMax operator seeking broadband stimulus funds from the U.S. government. Out of all the WiMax contenders, Open Range Communications Inc. has applied for one of the biggest single loans, asking for nearly $87 million in an Extension Markets BIP Loan to bring wireless Internet to 2 million people in 10 states.

In March 2008, the United States Department of Agriculture's Rural Development Utilities Program (RDUP) approved a $267 million Broadband Access Loan for Open Range to deploy a nationwide wireless network. The $86.9 million loan sought via the Recovery Act, if approved, will be separate from that. (See Open Range Plans WiMax.) "The smaller amount is a loan Open Range has applied for under ARRA [American Recovery and Reinvestment Act]," Curt Hockemeier, president of Open Range, tells Unstrung. "It will add service to un-served and underserved communities primarily in close proximity to the markets where the RUS has already approved Open Range to serve -- the communities where Open Range will use the $267 million loan."

Digital Bridges Ltd. (DBC), meanwhile, has been busy with tens of applications for grants and loans -- from under $1 million to over $4 million -- for WiMax deployments in multiple rural regions. In total, DBC is seeking more than $100 million in funds.

Business WiMax provider Towerstream Corp. (Nasdaq: TWER) has already revealed that it asked for over $100 million to cover nine cities under the BTOP scheme.(See Recovery Act: TowerStream Eyes New Markets.)

There is $4 billion in broadband stimulus money to be awarded in this first, way over-subscribed round. The Feds revealed late last month that applicants asked for "nearly $28 billion" in initial bids. A total of $7.2 billion is to be awarded over three rounds. (See Recovery Act: Round One Brings 'Nearly $28B' in Bids.)

— Dan Jones, Site Editor, Unstrung

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