AT&T: WiMax Is Top Candidate for Rural Broadband

AT&T Inc. (NYSE: T) is considering expanding its WiMax footprint beyond the frozen wastes of Alaska as the rising cost of copper starts to make DSL deployments prohibitively expensive in rural areas of the U.S.

The carrier's CTO, John Donovan, tells USA Today that WiMax is “at the top of the list” as an alternative technology to copper for the operator. He added that the carrier is also considering cellular femtocells -- tiny base stations that extend the speed and coverage of wireless signals in the home -- as the way to get cheaper broadband faster to country folk.

Unstrung exclusively reported in September that AT&T could deploy fixed WiMax in some Southern states as early as this year. (See AT&T WiMax Heading South? and How Close Is AT&T to WiMax?) The operator acquired 2.3 GHz spectrum that would be suitable for WiMax deployments when it bought BellSouth. AT&T presently holds 22 2.3 GHz licenses in the South.

AT&T already has a limited deployment of WiMax technology in Alaska. The operator is using 2.3 GHz equipment from Alvarion Ltd. (Nasdaq: ALVR) for those networks. The operator is also said to be looking at extending the WiMax specification for improved video performance. (See AT&T: Broadband in Alaska.)

In fact, AT&T has never put down WiMax as a potential replacement for wired broadband technology. The operator, however, favors long-term evolution (LTE) technology for mobile broadband deployments. (See AT&T 's Road to 4G.)

Nonetheless, if AT&T does choose to deploy fixed WiMax as a DSL alternative, that may help to explain its sudden recent interest in the approval process for the Sprint Nextel Corp. (NYSE: S)-Clearwire LLC (Nasdaq: CLWR) deal. (See Sprint, Clearwire Create $14.5B WiMax Giant.) AT&T argued last week that it believes that if the Federal Communications Commission (FCC) were to include Sprint and Clearwire's non-operational spectrum, then the proposed merger would be subject to more scrutiny, and therefore, the initial application should be denied. (See AT&T Looks to Block Sprint/Clearwire Merger.)

Clearwire and Sprint hold the vast majority of available 2.5 GHz licenses in the U.S. In fact, AT&T actually sold Clearwire all of its 2.5 GHz holdings back in February 2007 for $300 million. (See AT&T Sells Spectrum to Clearwire.)

If it wants to expand WiMax beyond Alaska and some Southern states, however, AT&T will need more spectrum. Potentially it could use some of the 700 MHz spectrum it won at auction earlier this year. AT&T's 700 MHz holdings are definitely a finite resource, though, and one that may be more suitable for mobile broadband deployments, because it will allow signals to travel further and penetrate buildings more easily. (See WiMax USA: Spectrum Crunch Ahead.)

— Dan Jones, Site Editor, Unstrung