Michigan Broadband to buy NMU spectrum network for $21m

Michigan Broadband Services (MBS) has agreed to pay $21 million to Northern Michigan University (NMU) for substantially all the assets of the university's Educational Access Network (EAN). The deal, which is subject to regulatory approval and compliance with federal funding-programme conditions, will be financed through a combination of BEAD grant proceeds awarded to MBS's subsidiary, Upper Peninsula Telephone Company (UPTC), and a loan from the National Cooperative Services Corporation.

The EAN assets include licensed 2.5 GHz Educational Broadband Service (EBS) spectrum covering portions of 41 counties, Nokia AirScale radio equipment across more than 70 tower sites, licensed microwave facilities and associated infrastructure. The network currently serves 7,500 subscribers and generates approximately $2.5 million in annual revenue. NMU students and faculty will retain free access to an EAN connection under the terms of the deal.

The deal

MBS intends to upgrade the acquired network from 4G LTE to 5G, extend fibre and microwave backhaul, and integrate the wireless platform with its existing fibre network, which spans more than 2,500 miles across northern Michigan. Phil Truran, president of Michigan Broadband, said the company's near-term focus would be on "maintaining service during the transition, improving backhaul, upgrading equipment and delivering a better customer experience at an affordable price."

The company also plans to explore wholesale mobile partnerships under which a carrier partner's existing mobile network would be layered onto MBS's tower, fibre and spectrum assets to reduce coverage gaps across the Upper Peninsula. This neutral-host approach, if realised, could allow MBS to offer fixed broadband, mobile voice and data under one regional provider, while generating wholesale and roaming revenues from other carriers. No carrier partner was named in the release.

Market context

The transaction is a characteristic move in US rural broadband consolidation, where smaller regional operators are using the federal BEAD programme's $42.45 billion pot to build scale ahead of deployment deadlines. Educational broadband spectrum in the 2.5 GHz band has become commercially attractive since the FCC reopened EBS licensing in 2019, allowing licence holders to use spectrum for general fixed-wireless access rather than solely for educational purposes. A number of rural carriers and wireless internet service providers have pursued similar EBS acquisitions in the Midwest as a lower-cost complement to fibre builds in low-density terrain.

MBS's parent, MachTen, Inc. (OTC: MACT), positions itself as a multi-technology infrastructure platform. The converged fibre-and-fixed-wireless model it is pursuing mirrors approaches taken by larger rural incumbents such as Consolidated Communications and Lumen in markets with similar geography: sparse population, difficult terrain and high per-premises fibre construction costs. Licensed fixed wireless from tower-mounted equipment can extend broadband reach along rural roads and to farms that lie miles from any practical fibre route, materially reducing the cost per connected location.

Regulatory and funding read-across

The transaction is subject to customary closing conditions, including regulatory approvals and compliance with BEAD programme obligations administered by the National Telecommunications and Information Administration (NTIA). BEAD rules place obligations on recipients around affordability, network openness and reporting, all of which will apply to UPTC as a grant awardee. Any 5G upgrade using the acquired EBS spectrum will also require Ofcom-equivalent FCC coordination, given that EBS licences carry specific technical conditions on power levels and co-existence with adjacent users.

The planned mobile-service layer adds further regulatory complexity. A wholesale mobile arrangement would likely require MVNO agreements and, depending on the carrier partner chosen, could attract scrutiny under federal universal-service programme rules if the partnership involves Lifeline or related subsidised services. MBS has not indicated a timeline for closing beyond the standard regulatory process.

For MachTen investors, the deal adds named spectrum, tower infrastructure and subscriber revenue at a modest acquisition multiple relative to the network's asset base, though the path to 5G and mobile convergence involves capital expenditure well beyond the $21 million purchase price.