Clearwire seeks to augment 4G network with stimulus funds

Clearwire (NASDAQ:CLWR) is hoping toaddtoits WiMax build planthis year with the help of some federal dollars. It revealed today it has applied for a “modest” but undisclosedamount of broadband stimulus fundsto deploy 4G networks in under-served areas in Detroit and Puerto Rico, two markets that currently are not part of Clearwire’s business plan. In addition, Clearwire is affiliating itself with a few other grant applications, agreeing to share spectrum or network assets in five states if the unnamed broadband providers secure funding.

While the incumbent operators have shied away from applying for stimulus dollars, smaller operators are leaping at the chance of dipping into the $7.2 billion federal pot. Fund administrators have received some 2200 applicationsfor $28 billion in broadband projects.The government is initially releasing $4 billion forbroadband projects, though some of that willbe usedtoback loans rather thanfor direct grants.The expected influx in funds has lifted the hopes of potential windfalls from vendors like Calix, Harris Stratex (NASDAQ:HSTX) and Alvarion(NASDAQ:ALVR), which all supply access gear to independent and rural operators.

Clearwire officially turned up service in ten previously announced smaller marketsin Texas and the Pacific Northwest today, expanding its footprint to 14 cities of all sizes, including the metro areas of Atlanta, Baltimore, Las Vegas and Portland, Ore. Given that more than half of Clearwire’s 25 launch markets this year will be smaller cities like Killeen, Texas, and Bellingham, Wash., adding Detroit and any sizable cities in Puerto Rico this year would boost significantlyits coverage covered target of 30 millionpops thisyear. In the next few months, Clearwire plans to activate commercially its networks in Charlotte, Chicago, Dallas-Fort Worth, Honolulu, Philadelphia, Seattle.

Clearwire is under pressure to roll out its WiMax network as quickly as possible using the more than $3 billion in capital it received from investors Google (NASDAQ:GOOG), Comcast (NYSE:CMCSA), Intel (NASDAQ:INTC) and a handful of others to fend off the looming threat of Verizon Wireless (NYSE:VZ, NYSE:VOD). VZW plans to launch its own commercial4G network in 2010 using long-term evolution technology (LTE), and while it will be later to market it plans to roll out out service much more quickly and in much larger markets than Clearwire. Verizon has said it will have a footprint 30 markets covering 100 million by the end of 2010. Meanwhile Clearwire’s plans call for a footprint covering 80 markets but encompassing only 120 million pops in the sametime frame.

Pressures at Clearwire appear to be taking their toll on the executive staff. On Monday, Clearwire announced another round of executive reshuffling, parting ways with chief strategy officer Scott Richardson(who remain an advisor to the company) and chief financial officer David Sach.

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