Competitive service provider XO Holdings (news, filings) has filed an application for round 2 stimulus funding that is very ambitious to say the least. The company is proposing to build an intercity and middle mile network extending from Washington to Illinois, connecting underserved areas along the way through Idaho, Montana, North Dakota, Minnesota, Iowa, and Wisconsin. I can't wait to see the map, but right now we're limited to the executive summary found here. At each of 46 network access points, they would leverage their spectrum assets via a wireless tower to extend coverage into the surrounding communities. They are also working with a selection of Indian tribes along the route that are seeking better and more cost effective connectivity.
In total, the new build would cover 2,277 miles of 144 count cable, and would cost some $290M of which the government would provide $206M - XO would be putting up the other $84M. That's a hefty price, an order of magnitude larger than what its peers at Zayo and Level 3 sought and received in Round 1 and more in the neighborhood of what Qwest and Windstream are seeking. The northern route has long had few fiber choices, since the more recent builds during the dot-com boom usually chose to go through Denver. The sparse population across the high plains and upper Rockies makes it hard to justify the expense.
If XO's application is successful, they would be able to add a quite unique footprint to their current intercity network, which is mostly made up of fiber IRUs from Level 3. Of course, this plan also assumes that the company manages to raise capital, given that they will probably pay off their Class A preferred stock in cash and have only $150M or so on hand. But it will be a while yet before the NTIA makes any decisions and even longer before they parcel out the money if this application even succeeds. Who knows, by then the whole Icahn situation might be resolved, hah.
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