Meet the Man Who Might Save WiMAX

President Obama's choice to lead the Federal Communications Commission, Julius Genachowski, sees broadband Internet adoption as a national priority.

"We should have, I believe, a communications infrastructure that is world-leading, a 21st-century infrastructure that generates economic growth, opportunity, prosperity," he said in testifying before Congress this week.

How pleasing this must be to WiMAX hopefuls Clearwire (Nasdaq: CLWR  ) , Sprint Nextel (NYSE: S  ) , and Alvarion (Nasdaq: ALVR  ) . Intel (Nasdaq: INTC  ) and Cisco (Nasdaq: CSCO  ) , too. These firms and more have bet billions on WiMAX as a future technology for wirelessly supplying broadband over entire metropolitan areas.

But WiMAX's success is anything but assured. Telecoms are racing to introduce Long-Term Evolution (LTE), a competing wireless protocol that enhances rather than replaces the existing cellular network. AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) are developing the standard and could begin a national rollout as soon as 2011.

Genachowski would appear to welcome that, given his testimony, but he also has billions in stimulus to distribute right now. That's good news for Clearwire and Sprint Nextel, which have begun a national WiMAX rollout. Baltimore is already active. If Genachowski wants to move fast, WiMAX can help.

In fact, it already is: Rural broadband operator Open Range Communications yesterday announced a five-year, $100 million deal with Alvarion, a Motley Fool Rule Breakers pick whose equipment will help create a 17-state network serving 546 communities.

Earlier this month, Alvarion CEO Tzvika Friedman hinted at deals like this one in an interview with Reuters. "One of the biggest things people are doing because of the crisis is stimulus packages for rural broadband -- in the U.S. alone (the spend is) $7.2 billion," Friedman said. He followed that by saying the WiMAX industry would "enjoy" the economic crisis because of stimulus plans like the one Genachowski would administer if confirmed.

Will government largesse become a competitive advantage for WiMAX? Certainly not over the long term. But right now, with money earmarked and regulators motivated, WiMAX is finally having its moment.

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Julius Genachowski is a former member of The Motley Fool’s Board of Directors.

Alvarion is a Rule Breakers recommendation. Intel and Sprint Nextel are Inside Value picks. The Fool sold puts on Intel. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers owned shares of Alvarion at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy won't be tied down.


Read/Post Comments (2) | Recommend This Article (14)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 19, 2009, at 3:09 PM, mogrifier wrote:

    Do better homework. Clearwire is launched in Portland, Atlanta, and Las Vegas. Just take a look at http://www.clear.com/shop/get_clear.php. Baltimore offers XOHM service, but will be migrated to Clear later this year. (XOHM is just as fast and same technology). The WiMAX Forum also has a global roaming initiative, so expect roaming in the US and with the rest of the world where conditions are right.

  • Report this Comment On June 19, 2009, at 7:03 PM, DavidLLL wrote:

    Good analysis. Now is the moment to get in. Alvarion is in the right direction.

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