ARRA Stimulates Rural Communities and WiMAX

The wave of wireless companies vying for a piece of the American Recovery and Reinvestment Act (ARRA or the Stimulus Bill) is gaining momentum.

WiMAX and broadband wireless providers, along with a supporting cast of wireless equipment and technology companies, are heeding the new administration’s call to bring wireless communications to previously underserved, and unserved, rural communities. (For another recent look at wireless broadband, click here.)

The legislation includes about $6.8 billion for wireless communications upgrades.

Answering the call has its challenges, but companies such as DigitalBridge Communications, Main Street Broadband and others are finding the stimulus package funds to be a much-needed booster shot for their business cases and for the expansion of wireless technology in general.

"The need for broadband in rural communities and wireless broadband is a great opportunity," said Joe Kochan, vice president of operations and co-founder of DigitalBridge Communications, a provider of WiMAX 4G broadband networks in underserved U.S. markets. "We see a great business case … and we’ve proven it works."

What’s also proving to work, Kochan added, is the stimulus fund. "The stimulus funds would propel the next level of growth. So, we are actively seeking those funds via NRTC (National Rural Telecommunications Cooperative), a partnership that will further our mission by using stimulus funds for wireless broadband networks."

Main Street Broadband, another wireless provider, has secured $34 million in funding via a USDA Rural Development Loan to provide wireless communications to 120 rural communities in parts of Georgia and Florida.

Priming the pump

The emergence of WiMAX networks in small-town rural America is firing up the vendor side as well.

"This is a very fertile market," said Ashish Sharma, vice president of corporate communications for Alvarion, a provider of 4G wireless technology. The company has done well in other markets, announcing last week at the WiMAX Forum Global Congress that its cumulative shipments over the past five years have exceeded half a billion dollars.

Sharma noted America’s ongoing catch-up game. "We’re following behind the global broadband growth," he said. "So the ability for government to move it ahead with the stimulus money is helpful, and much of it is targeted by wireless."

Services providers pursuing the stimulus money for WiMAX networks in rural communities nonetheless face challenges. Funds come with requirements attached, for instance. Sharma said that Alvarion was able to help out Main Street Broadband in that area. Then there’s the business case.

"The challenge is to decide how many cities, the demand, what service to provide like VoIP, triple-play," Sharma said. "But for WiMAX 4G providers such as DigitalBridge, the stimulus funds could be very beneficial."

The funds appear to be leveraging a powerful tool. "This new technology is incredibly effective and very capital efficient at $100 per home passed with WiMAX vs. $1,000 for cable," said DigitalBridge VP Kochan.

Kochan said the NRTC partnerships enable service providers such as DigitalBridge to benefit from economies of scale and that the technology itself is "fully mobile" and "next-generation."

"There are challenges like developing a device eco-system and access to capital, but we have the strongest hope the stimulus package will help put wireless and WiMAX in rural communities," he said.

– Craig Kuhl

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