WiMax operators ask for $1.6B in broadband stimulus

Of the 1130 applications submitted to the federal government for last-mile broadband stimulus funds, more than a quarter were filed by WiMax operators looking to capitalize on the program to expand wireless access and mobile broadband services to underserved areas, according to an analysis by the WiMax Forum. While many of those applications were for rural projects, several of them came from familiar names looking to expand access in the big cities.

Though the number of applications from wireless providers was large, the amounts each requested on average was relatively small. Of the $14.212 billion in last-mile funds requested, the 300 WiMax applications totaled $1.6 billion, according to the Forum. The National Telecommunications and Information Administration (NTIA) and the US Department of Agriculture’s RUS fund have set aside a total of $4 billion in grant funds with an additional $3.2 billion available for loans. In total the government has received applications for $28 billion in funding for all broadband stimulus projects.

Forum president and chairman Ron Resnick said that the high turnout among wireless providers shows that WiMax has enormous potential in bridging the digital divide between competitive urban markets and unserved and underserved rural markets.

“WiMax can be deployed over wide areas to serve thousands of consumers cheaper and faster than traditional wireline services,” Resnick said. “For every dollar spent on a new network, a WiMax operator can cover 10 to 20 times the number of homes and businesses with WiMax service than they can cover with wireline. These savings are passed along to the customer, who spends only $25 to $35 a month on a WiMax connection with comparable speed to a $50 to $60 cable or wireline connection.”

While the main focus of the stimulus program may be on rural areas, several urban wireless ISPs have applied, arguing that neighborhoods in some of the densest, most populated American neighborhoods are just as underserved as rural markets.

Towerstream (NASDAQ:TWER) CEO Jeff Thompson said that his metro ISP is applying for funds that would allow it to extend its metro WiMax networks in downtown areas of Manhattan and other cities to outlying depressed communities where small businesses have little or no access to broadband connections. “There are parts of New York and Chicago that are just as bad off as rural areas when it comes to affordable broadband,” Thompson said in a recent interview.

Clearwire (NASDAQ:CLWR), too, is asking for government assistance in its nationwide mobile WiMax rollout. Rather than offer T-1 equivalents to small businesses, though, it plans to offer residential connectivity and wide area mobile broadband. In its applications, it has targeted two such markets, Detroit and Puerto Rico, but Clearwire is also partnering with several other applicants agreeing to share spectrum and network assets with those operators if their applications are approved.