Stimulus winner Clearwave has ambitious middle mile network plans

Although small incumbent telcos won a large portion of broadband stimulus funding, some competitive local exchange carriers also were winners. One of the larger CLEC stimulus awards went to Delta Communications, a competitive carrier that operates under the name Clearwave.

The company won a grant for $31.5 million through the stimulus program, which it will use in combination with as much as $45 million in matching funds, to build a 740-mile fiber network in rural Illinois that will interconnect anchor institutions and businesses in numerous communities. When the project is completed, anchor institutions and business customers will have dramatically improved bandwidth availability at economical rates, Clearwave President Scott Riggs told Connected Planet.

Clearwave, which already serves 1500 business customers in the area, expects to gain more. “When we can come in and offer them 10 or 20 meg for less than they pay for a T-1, why wouldn’t they switch over to that service?” asked Riggs.

Anchor institutions such as schools, libraries, government agencies and health care facilities will see even better rates, as Clearwave promised to offer them deeply discounted services as part of its stimulus application for a three-year period. Their pricing, Riggs said, “was discounted almost to the point where it’s at about what it costs us to serve them.”

The pricing will be so attractive in comparison with current offerings that any anchor institution not taking the new service could be viewed as shirking its fiduciary responsibility, Riggs said.

A high-speed network

Clearwave got its start in the mid-1990s, initially operating as a paging company, then transitioning into a CLEC strategy around 2001. “We’re now transitioning into fiber transport with some last-mile components,” said Riggs.

Clearwave has already co-located in 20 incumbent central offices operated by AT&T and Frontier and will add 10 more as part of the stimulus project, connecting all COs to the fiber network.

The government requires any company using stimulus funds to build a broadband network to allow other service providers access to that network at reasonable rates and, as a result, Clearwave also expects to see other service providers coming in to offer residential broadband services, using Clearwave’s network for backhaul. The Clearwave network will connect to carrier interconnection points in St. Louis and Chicago, enabling nationwide and even worldwide connectivity. Clearwave also expects to provide connectivity to numerous cell towers.

A final element of the project is a new data center, which will house key equipment, including routers. Although not part of the stimulus project, Clearwave expects to eventually use the data center to support hosted services for its customers.

If at first you don’t succeed . . .

Clearwave won its stimulus funding in the second round of the stimulus program, after an unsuccessful attempt in the first round. After being rejected on its first try, Clearwave looked closely at first round applications that were successful and reworked its application to include more anchor institutions, including a 911 project.

Clearwave has not yet broken ground on the new project because it is still waiting for environmental approvals. But the company has selected key vendors—including Cyan and Juniper. And Clearwave, which has about 32 employees, has hired about five new people and expects to double its work force within 12 to 18 months as a result of the stimulus project.

“They will all be permanent jobs,” Riggs said.

Riggs believes the construction firm that has been selected to handle the project also will need to make some new hires, at least for the construction period.