Open Range Goes Bankrupt

Open Range Communications has declared bankruptcy. Open Range received about $267 million in loan from the U.S. Department of Agriculture’s Rural Development Utilities Program as part of the "broadband stimulus" program.

Open Range had hoped to create a broadband wireless Internet provider whose primary focus was hundreds of un-served and underserved communities across America. Open Range intends to serve over 500 communities, making its services available to approximately six million people in Arkansas, Alabama, California, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Ohio, Pennsylvania, Nebraska, Nevada, New Jersey, New York, South Carolina and Wisconsin.

You might recall that back in 2009, the federal government was pitching "investment in broadband" as a "jobs" program. If you talk to suppliers eligible to supply gear to broadband stimulus recipients, you will find that precious little of the money has actually been disbursed. That is not to say no money has moved, but not very much.

As the "stimulus" was supposed to help with the Great Recession of 2008, and since most of the money hasn't been allocated, you can assume there was nothing at all "shovel ready" about the program. That's one traditional objection to most short term federal spending that is supposed to be counter cyclical. By the time the money actually hits the economy, the economy already has begun to improve. In other words, as they say in the legal profession, "justice delayed is justice denied."

In the fiscal realm, counter-cyclical spending that is delayed also has no effect ameliorating the impact of a recession, because the recession is over before the money can do any good. To add insult to injury, you get a major broadband stimulus recipient going out of business.

Bankruptcy for Open Range