WiMAX eyes $6bn grants program to boost broadband

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WiMAX eyes $6bn grants program to boost broadband

By CAROLINE GABRIEL

Published: 16 January, 2009

READ MORE: WiMAX | Broadband

Even ahead of next week's inauguration of US president-elect Barack Obama, the incoming administration is unleashing an $825bn plan with the dual objective of rescuing the economy and modernizing America's infrastructure. Though $6bn of this could go on improving broadband and wireless services in underserved markets, this figure is lower than many had hoped. But vendors and operators will still be racing to grab a share of the spoils, with the WiMAX community, in particular, eyeing the opportunity.

The $825bn 'economic stimulus plan' was unveiled by the Democrats in Congress yesterday and includes $6bn in grants for broadband and wireless in rural regions, a sum that could come with controversial conditions attached. In a statement, the House Appropriations Committee said of the $6bn "for every dollar invested in broadband the economy sees a tenfold return on that investment". The Obama transition team stressed that this grants program would be only part of a broader universal broadband scheme.

Operators and public interest groups are already fighting over the strings that may be attached to the funds. The latter want tax funded networks to be fully open, with no proprietary systems, and either run on a wholesale basis open to all small providers, or allocated to a single company, but with strong mandates for net neutrality and open access. Such concepts were supported by Obama during his presidential campaign and the new administration is expected to accelerate the US move towards openness. They are also at the heart of the WiMAX argument for being the broadband wireless system of the future in north America.

Analysts at Stifel, Nicolaus told RCRnews that grants of $6bn to $8bn would probably have limited impact on large operators, but could help equipment makers - if they are not delayed by in-fighting among the various interested groups. Some House Democrats may pursue a more radical plan costing about $10bn. Intel is one WiMAX supporter that has started to set out the benefits of basing a new approach to wireless and broadband around the technology, on the basis that it has been devised around open access and PC-style economics, and is the most modern wireless platform with equipment currently available.

Meanwhile, FCC chair Kevin Martin has resigned, paving the way for likely successor Julius Genachowski.