FEDERAL FARM BILL FUNDING RURAL BROADBAND ROLLOUTS

There's gold in Iowa cornfields — it just takes a little digging to find it. That's the lesson being learned by upstart fixed broadband wireless provider AiroLink Communications, which is concurrently building 900 MHz non-line-of-sight, high-speed data networks in two rural Iowa communities while trying to tap into federal funds.

Buried in the wide-ranging Farm Security and Rural Investment Act of 2002, spearheaded by Sen. Tom Harkin (D.-Iowa) and signed into law in May, is at least $20 million in federal funds allocated to finance broadband service for rural consumers. The dough could be a boon to small providers like AiroLink, but, as befits the bureaucracy, tapping the mother lode is no easy task.

“It's a really great proposition for companies to go after,” said Lindsay Shroth, an analyst with The Yankee Group who follows the fixed broadband wireless space. “I don't know how well known all of this is, but it's really interesting.”

Shroth is not alone in the dark about the funding. Washington sources said application forms do not yet exist, and the monetary specifics are vague.

“In all probability, these aren't going to be grants, they're going to be loans,” said one source. “Until they have the application forms in a clear-cut way, it's hard for people to apply.”

There's enough money, though, to make it all worthwhile.

“You have one of those points in time where the government programs and the technology actually match and work hand-in-hand,” said Charles Brown, vice president of sales and marketing for WaveRider Communications, the vendor supplying AiroLink's wireless gear.

It helps to understand the federal bureaucracy. The Wireless Communications Association International, fixed broadband's Washington-based lobbying organization, is guiding its members through the funding labyrinth, said WCA President Andrew Kreig.

“The process is often more complicated than it looks at the initial outset of an announcement,” Kreig said.

AiroLink is experiencing that first hand. President Jeff Niemeier said he has had problems getting information from Harkin's Des Moines office. Harkin's Washington office did not return calls for this story and returned an e-mail request with a standard form referral to the senator's Web site.

Niemeier needs a chunk of the money to make his business viable.

“In some of these communities where the population is low, I don't know if a company can be profitable or not,” he said. “That's why the government came out with some of these programs to try to help subsidize it.”

AiroLink has begun non-line-of-sight fixed broadband service with WaveRider's last-mile technology in Mount Vernon and Lisbon, Iowa, and is in discussions with five to seven other communities, said Niemeier. The company's business plan relies on leasing space on top of local water towers and giving cities between 5% and 10% of the profits. This makes the cities active partners and helps Niemeier control costs, especially in communities with less than 1000 residents.

“I usually don't try to go into anything under 1000, but some of them are convenient because they're right next to another where I already have service,” he said. “Because I'm not sure of the demand, I like to work on a percentage basis.”

WaveRider's non-line-of-sight technology also is essential to the deployments, Niemeier said.

“People think Iowa's flat. It's not,” he said. “There are a lot of these towns that have a lot of foliage, especially as you get toward the Mississippi River.”

WaveRider executives emphasized that the technology is not size-restricted.

“I always cringe a bit when people talk about the rural environment,” Brown said. “Our product is designed to bring high-speed Internet access. Typically, it goes in the suburbs, or what I tend to think of more as the semi-rural areas.”

Mount Vernon and Lisbon have dense populations in a rural setting, he said. The company's other focus is underserved suburban areas.

In every case, WaveRider is using proprietary technology to deliver high-speed Internet to small and medium enterprise and residential customers in the unlicensed 900 MHz band.

“Since they'll get a very rapid return, they don't particularly worry about the proprietary aspects,” Brown said.

WaveRider delivers “best-effort” packages with top- and bottom-end throughput guarantees starting around 384 kb/s. AiroLink is scaling residential and small/medium business packages from $40 to $60. “Dynamic Polling MAC” technology can provide service to as many as 300 users within range of a base station radio using indoor antennas.

AiroLink's ability to start quick and build up customer bases gradually has the competition's attention, Niemeier said.

“It wakes them up,” he said. “I've noticed several towns that once I start talking, I light the fire under them a little more.”

Cable modems currently offer the most competition, Niemeier said, noting his company also is “very comfortable competing with DSL.”

AiroLink, which seems to fit the profile of the type of provider the farm bill was meant to help, is counting on the new cash to support the entire rollout.

“I investigated that, and I'm applying for several different federal programs,” Niemeier said.

Indeed, the amount of funding available for rural broadband services is increasing at several levels of government. “Almost every state has some broadband bill in place to provide broadband to these rural communities, and they don't care how,” said Robert Hoskins, managing director of the Broadband Wireless Alliance.