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Saturday, September 12, 2009

Broadband Stimulus Round I Applicants: U.S. Cellular Applies for $23.51 Million for 4 States

StimulatingBroadband.com 09/12/09 Chicago based U.S. Cellular (NYSE: USM) announced on September 10 that the firm applied for $23.51 million in federal broadband stimulus funds under the Broadband Initiatives Program (BIP) administered by the Rural Utilities Service of the U.S. Department of Agriculture.

The company states, in recent press releases and in online descriptions of its projects posted on the Applications Database section of the federal BroadbandUSA.gov site, that it is seeking to build out its 3G wireless network in rural areas of California, Kansas, Missouri, and Nebraska.

"If provided with funding, we stand ready with shovels in-hand," said U.S. Cellular CEO John E. Rooney "and are prepared to complete these mobile broadband projects within one year. It is an aggressive plan that will provide jobs, spur economic growth and enhance public safety for rural, underserved and vulnerable Americans."

"No one will be able to provide broadband to more customers faster or cheaper than what we propose," commented Rooney.

California
For California, the company has requested $2.95 million in grant support under BIP. Two reports by leading economists conclude that U.S. Cellular's proposed California wireless broadband project is estimated to provide more than 350 jobs and add as much as $43 million in GDP to the local economy.

Other beneficiaries of U.S. Cellular's proposed projects in northern California are the 3,368 community anchor institutions that provide public safety, economic development, healthcare and education services to rural areas. Several such institutions have written in support of U.S. Cellular's application to provide new and enhanced mobile broadband service.

"The lack of high-speed Internet access is an economic pitfall for Lake County," wrote Lake County, California Supervisor, Anthony Farrington. "Local businesses are losing opportunities because of poor Internet connections. And residents are unable to reliably use the Internet for basic tasks such as finding job postings, booking business and personal travel arrangements and managing bank accounts. The stimulus funding is an opportunity to remedy this and position our community for the future."

The projected cost of delivering mobile broadband service on U.S. Cellular's existing and budgeted cell sites to proposed service areas in California is $5.9 million. Slightly less than half of this total is to be underwritten by a BIP grant, with the balance funded by U.S. Cellular using other sources. Based on projected costs, U.S. Cellular will be able to introduce mobile wireless broadband for approximately $37 per household.

Kansas
For projects in Kansas, the company has requested $3.7 million in grant support from BIP.

The wireless provider's retained economists estiimate the proposed Kansas will provide nearly 450 jobs and add as much as $53 million in GDP to the local economy.

Other beneficiaries of U.S. Cellular's proposed projects are the 6,488 community anchor institutions that provide public safety, economic development, healthcare and education services to rural Kansas. Several such institutions have written in support of U.S. Cellular's application to provide new and enhanced mobile broadband service.

"America's rural communities are integral to the sustenance of our agricultural vibrancy and global competitiveness," wrote Geary County Commissioner Larry Hicks. "Here in Geary County, Kansas our local businesses are at a gross disadvantage by losing opportunities because of inadequate Internet connections."

The projected cost of delivering mobile broadband service on U.S. Cellular's existing and budgeted cell sites to proposed service areas in Kansas is $7.4 million. Slightly less than half of this total is to be underwritten by a BIP grant, with the balance funded by U.S. Cellular using other sources. Based on projected costs in Kansas, U.S. Cellular will be able to introduce mobile wireless broadband at an average cost of $23 per household.

Missouri
For its proposed projects in Missouri, the company has requested $11.2 million in grant support from BIP.

Economists retained by the company estimate the proposed wireless project will provide up to 1,400 jobs and add as much as $167 million in GDP to the local economy.

Other beneficiaries of U.S. Cellular's proposed projects are the 15,460 community anchor institutions that provide public safety, economic development, healthcare and education services to rural Missouri. Several such institutions have written in support of U.S. Cellular's application to provide new and enhanced mobile broadband service.

"Hickory County is a remote, rural county with the highest percentage of persons over retirement age in the State of Missouri," wrote Hickory County, Missouri, Presiding Commissioner Kent Parson. "Being a small county of less than 10,000 people it has not been economically feasible for Internet providers to install the equipment necessary to accommodate the services for our citizens that most communities enjoy."

The projected cost of delivering mobile broadband service on U.S. Cellular's existing and budgeted cell sites to proposed service areas in Missouri is $22.4 million. Slightly less than half of this total is to be underwritten by a BIP grant, with the balance funded by U.S. Cellular using other sources. Based on projected costs in Missouri, U.S. Cellular will be able to introduce mobile wireless broadband at an average cost of $30 per household.

Nebraska
For projects in Nebraska, the company has requested $5.58 million in grant support under BIP funding. Economists retained by the company conclude that U.S. Cellular's proposed wireless broadband project in Nebraska is estimated to provide up to 712 jobs and add as much as $84 million in GDP to the local economy.

Other beneficiaries of U.S. Cellular's proposed projects are the 9,353 community anchor institutions that provide public safety, economic development, healthcare and education services to rural Nebraska. Several such institutions have written in support of U.S. Cellular's application to provide new and enhanced mobile broadband service.

"Although we have a significant number of jobs available in our area, with benefits and competitive salaries," wrote Kristin Simonson-Olson, Executive Director of Nebraska's North Central Development Center, "young people constantly tell us that they are unable to have the infrastructure to support their technology needs. Access to a broadband Internet connection is an absolute necessity; without it, our area will continue to lag behind in job creation, wealth and economic development opportunities."

The projected cost of delivering mobile broadband service on U.S. Cellular's existing and budgeted cell sites to proposed service areas in Nebraska is $11.1 million. Slightly less than half of this total is to be underwritten by a BIP grant, with the balance funded by U.S. Cellular using other sources. Based on projected costs, U.S. Cellular will be able to introduce mobile wireless broadband at an average cost of $31 per household.

U.S. Cellular's View
U.S. Cellular sees USDA's Broadband Initiatives Program as an opportunity to help bridge the urban-rural digital divide. Mobile broadband can provide critical applications that improve the health, safety and economic development opportunities that urban areas take for granted. With reliable wireless broadband, rural public safety officers and healthcare providers will have access to real-time information and the latest innovations in telemedicine.

"It will not be enough to fund broadband deployment through wires and cables alone," said Rooney. "Americans are active, mobile multi-taskers who want and need on-the-go access to information through wireless broadband networks. An investment in mobile broadband will help rural communities compete for jobs in an information economy, maintain tax bases for their schools and provide modern healthcare for their residents."

Even without BIP support, U.S. Cellular forecasts that 3G mobile broadband coverage will be enabled on 60 percent of its cell sites by the end of the summer, which will reach approximately 75 percent of its post-pay customers.
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