Open Range finds favor with the FCC, LightSquared

Lynnette LunaThe sun is shining on Open Range Communications these days. The rural wireless broadband operator 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.

But the FCC, which has made it a major policy initiative to bring broadband to rural areas, has been kind. The has continually granted Open Range 60-day operating extensions until it could find another spectrum partner--which is now LightSquared. And the U.S. Department of Agriculture's Rural Utilities Service (RUS), which granted Open Range a $267-million loan in 2008, was willing to work with the company, reinstating its funding this past fall after suspending advances in July. In addition, it still has its $100 million equity investment from One Equity Partners, the private investment unit of JPMorgan Chase.

Open Range Communications and Globalstar made headlines in 2008 when the two were granted authority from the FCC to enter into a lease agreement whereby Open Range would use the ATC component to roll out WiMAX services to 540 communities in 17 states.

Open Range CEO William Beans told FierceBroadbandWireless that the company is now operating in 143 communities in 12 states and sees strong demand for its fixed WiMAX services.

Last week Open Range inked a multi-year strategic network partnership with LightSquared that allows the rural operator to lease LightSquared's L-band spectrum and sell its satellite capacity. The partnership also includes a nationwide reciprocal roaming arrangement, and the two firms will collaborate on the design, buildout and operation of Open Range's network as well as on products and services.

That means Open Range will be deploying LTE instead of WiMAX, but will still aggressively market and expand its WiMAX service, likely for some time.

"We are going to have to figure out how the transitions work since it hasn't all been engineered and designed," Beans said. "So the question is when do the migrations happen and when will the new technology be ready?"

Beans expects the FCC to continue to allow Open Range to use Globalstar's spectrum until the new network is in place and the operator can achieve a smooth transition for subscribers, which could be some time. Perhaps most interesting is the fact that Open Range will play a critical role in filling out LightSquared's nationwide footprint, easing the burden on LightSquared as it aims to build an LTE network that covers 92 percent of the U.S. population.

In late January the FCC granted LightSquared a waiver that will allow the company to offer service on a terrestrial-only basis, bypassing a requirement that devices on its network be able to communicate with satellites. The waiver will allow LightSquared to offer terrestrial-only cellular devices, which will be cheaper than devices that have both terrestrial and satellite functionality.

Beans said that ATC spectrum is the only way to guarantee broad coverage of rural areas. "There's really nothing else that could cover everyone," he said. It's obvious the FCC agrees. --Lynnette