Though it named no specific technology, rural operator plans to use 700 MHz to augment wireline voice and data coverage

CenturyTel threw itself into the broadband wireless sector today, announcing it would use the 700 MHz licenses won at auction last month to create a broadband wireless overlay network feeding less densely populated areas in its existing wireline footprint.

Unlike other 700 MHz winners, CenturyTel announced no specific network technology plans for the overlay. Nor did it reveal any timeline or details of its future deployment, saying that the spectrum would not be cleared of broadcasters until 2009, until which it planned on laying out no additional capital for a wireless network build.

“While it is too early to discuss financial and operational details, we are acquiring spectrum that overlaps our core ILEC and fiber transport networks,” CEO Glen Post said in a statement. “This should enable us to utilize our existing operations, including our current distribution and technical support infrastructure, to cost-effectively deploy wireless services, both in our existing markets and in selective contiguous markets, where we believe profitable growth is achievable.”

CenturyTel is coming full circle to wireless. In 2002, CenturyTel opted to be a wireline-only operator, selling its wireless business to Alltel, which, in turn, spun off its own ILEC business as Windstream to focus solely on wireless. CenturyTel, however, got back into the wireless business as an MVNO, selling its own branded voice service over AT&T’s network.

There is little likelihood, though, that CenturyTel is opting to become a traditional mobile operator with its new 700 MHz licenses. The spectrum is optimized for broadband wireless services, and the high propagation rates of the low frequencies make it ideal for penetrating homes and businesses far from both the central office and cell tower. Since CenturyTel is deploying almost exclusively within its own ILEC territory, it can leverage its existing fiber footprint as well as well as its neighborhood exchanges.

CenturyTel seems to be in no hurry to launch, though, saying it would reveal more plans about the project including capex estimates later this year. The operator may have already selected a network technology, choosing not to reveal it. But if it is truly still evaluating the choices, it may have just painted a huge target on its chest. WiMAX and LTE vendors have been zeroing on the 700 MHz owners for future 4G networks, citing it as the ideal spectrum for mobile broadband. While WiMAX is commercially available today, LTE is still at least two years away from commercial launch, which may put it squarely on CenturyTel’s deployment timeline.

LTE, however, is a mobile technology, while CenturyTel appears to be considering a more fixed wireless approach—linking homes and businesses rather than people on the go. While Sprint and Clearwire have focused on the mobility aspects of WiMAX, much of the world is using the technology precisely for the fixed wireless scenarios CenturyTel is hinting at.

There’s nothing to say that CenturyTel has to deploy a 4G technology in the spectrum. Vendors like Nokia Siemens Networks and Ericsson have tried to position their Evolved High Speed Packet Access as a way of getting mobile broadband flat IP networks today using existing cellular technologies. There is also a long list of broadband wireless vendors such as Alvarion, Airspan, Airspan and Motorola specializing is selling fixed WiMAX or proprietary broadband wireless solutions to rural operators.

CenturyTel paid $149 million for A-block and B-block metro and economic area licenses covering roughly 53% of the operator’s local exchange territories in the west, Midwest and South. Despite the hefty prices garnered by the A and B blocks, CenturyTel got off rather easy compared to AT&T and Verizon, both of which paid premiums for high-value markets like New York, Los Angeles and Chicago. CenturyTel paid roughly 70 cents per MHz per POP for the spectrum, which covers to the majority of its territories in Arkansas, Louisiana, Ohio and Montana as well as portions of its territories in seven other states.