A big bet on rural WiMAX by the U.S. hits the skids

Open Range Communications, a WiMAX network that was created to offer rural Americans broadband service, has reportedly lost its CEO and is preparing for mass layoffs. Fierce Wireless reports that CEO Bill Beanes left the company last night, and says the company told employees in a conference call Wednesday morning that 122 of them would be laid off.

My calls to the Greenwood Village, Colo.-based company were not returned. We covered the company in 2008 when it was approved for a $267 million loan from the U.S. Department of Agriculture’s Rural Development Utilities Program to provide wireless broadband to 500 communities in 17 states. It was the largest loan in USDA history at the time, and Open Range also scored an additional $100 million investment from One Equity Partners, the private equity arm of JPMorgan Chase & Co (s jpm). It began offering WiMAX service in 2009.

The company was in the news earlier this year for reaching a deal with LightSquared, the non-network that the government is hoping will deliver a competitive form of wireless broadband. LightSquared has its own problems that are coming back to haunt the government, and now the reported failure of Open Range may end up giving the U.S. and the FCC another black eye as it tries to deliver acceptable broadband to rural America.