Armed with $374 million, a Greenwood Village-based company is seeking to shake up the Internet service market - starting with Northern Colorado.

Open Range Communications is preparing to launch its wireless broadband Internet service in Platteville, Fort Lupton and Frederick. Eventually the firm plans to serve around 6 million customers living in 546 unserved or underserved communities in 17 states as part of a federal plan to bring high-speed broadband to rural areas.

"We're focused right now on Northern Colorado. It's our initial market," said Sue Knox, general manager for Open Range. "We're in our trial phase and we're getting tremendous feedback."

About 40 households in the launch communities are participating in the trial. Once the testing is complete, rollout across the markets will be able to occur fairly rapidly.

"Pretty much, we're fully funded," Knox said.

The launch has been a long time in the making. Open Range received approval for more than a dozen broadband sites in Northern Colorado through the U.S. Department of Agriculture's Rural Development Utilities Program in March 2008. The USDA approved broadband projects in other areas of Colorado for Stelera Wireless LLC and Popular PCS, both based in Oklahoma City.

Open Range initially landed $268 million from RDUP's Rural Broadband Access Loan in 2007. The 12-year loan also carried with it a stipulation for private equity investment.

In January, Open Range secured $100 million from One Equity Partners, the private equity arm of JPMorgan Chase & Co. Knox feels that the company was able to attract funding during a near-impossible market due to its executive team, which includes several tech-industry veterans:

n Bill Beans Jr., CEO, served in executive roles at TeleTech Holdings Inc., SwitchPoint Networks Inc. and ICG Communications.

n Curt Hockemeier, president, formerly led Arbinet, the exchange, voice and IP firm he took public in December 2004, and served as an executive for AT&T Broadband Services.

"The timing of our initiative couldn't be better," said Beans, when announcing the equity investment. "The success of this financing is a testament to the powerful opportunity offered by the promise of WiMAX technology, the strength of my team and our resolve to execute on the plan for wireless broadband in rural America."



Rollout over five years

With the funding secured, the entire network rollout is anticipated to occur over the next five years. Open Range will lease mobile satellite spectrum to get is WiMAX network deployed through transmitter/receiver technology. Rather than a receiver connected to the exterior of a home or building, Open Range customers will have a modem-sized receiver that connects directly to the computer.

"It's totally plug-and-play," she said.

Technology aside, Knox feels that Open Range's differentiators include no contracts for service, no startup fees, no installation and a single price plan - under $60 for phone and Internet or under $40 for Internet alone.

Local presence in its markets are also a part of the rollout plan. Open Range will set up satellite offices to manage local sales and service operations. Knox said the first office will open in Fort Collins, but she wasn't sure about the opening date.

Open Range isn't alone in the pursuit of Northern Colorado's underserved Internet customers. Berthoud-based Skybeam started building its customer base in 2003 as LP Broadband. After its parent company assembled around $30 million in debt and equity financing, Skybeam went on an acquisition jag. In Northern Colorado the most notable deal was the purchase of Mesa Networks, which was founded in 2000 and boasted a customer network up and down the Front Range.

Skybeam hasn't made an acquisition in more than a year, but now has a footprint that includes the entire Front Range, several mountain communities and Wyoming. It is now working to integrate all of the systems it has picked up.



Kristen Tatti covers technology for the Northern Colorado Business Report. She can be reached at 970-221-5400, ext. 219 or ktatti@ncbr.com.