The story of Open Range Communications' unraveling is one of the more bizarre of this year-and one that FierceWireless had a hand in unearthing. The privately held rural WiMAX provider, which operated in more than 140 markets spanning more than a dozen states, received a $267 million from the Department of Agriculture's Rural Utilities Service, but then filed for bankruptcy and is now headed for liquidation.
The company was dealt a big blow in September when the FCC suspended Globalstar's Ancillary Terrestrial Component (ATC) authority because it hadn't complied with the commission's rules. That left its lease partner Open Range without spectrum, which threatened its funding to roll out WiMAX services to rural communities. However, the FCC essentially handed Open Range a lifeline by granting a conditional waiver for wholesale LTE provider LightSquared to allow its customers to operate terrestrial service; LightSquared inked a partnership with Open Range in March.
However, it seems clear now that the company was not making progress on its business plan. By late August, Open Range Communications confirmed it would cut an unspecified number of direct sales representatives from its workforce to reduce costs. Then in early October FierceWireless broke the story that Open Range would lay off the bulk of its employees and stop accepting new customers. At the time, the company said it would continue providing service to existing customers. Further, the company's CEO, Bill Beans, resigned.
Open Range then put itself up for sale and filed for Chapter 11 bankruptcy. The company listed total assets of $114 million and total liabilities of $110 million as of Sept. 30. Earlier this month a congressionally committee launched a probe into the company's government loan. Last week Open Range said its only bankruptcy bidder backed out of the deal and the company will be forced to liquidate its assets shut down its WiMAX service.
Open Range's story is one of wasted government funds, a mismanaged business and ultimately of corporate failure.