KeyOn Files Applications for $150 Million of Federal Broadband Stimulus Funds Under the American Recovery and Reinvestment Act of 2009

OMAHA, Neb.--(BUSINESS WIRE)--KeyOn Communications Holdings, Inc. (OTCBB:KEYO), one of the largest providers of wireless broadband, satellite video and voice over Internet protocol (VoIP) services in the United States, announced today it has submitted multiple applications for federal funding through the Broadband Initiatives Program (BIP), as part of the American Recovery and Reinvestment Act of 2009 (ARRA).

Of the $7.2 billion allocated for broadband infrastructure in the ARRA, $2.5 billion is administered by the Rural Utilities Service for specific deployment of broadband networks and related infrastructure in rural, unserved and underserved communities across the U.S. If successful under this program, KeyOn’s existing wireless networks, which currently cover approximately 2.5 million people, would be expanded to cover as many as 16 states, and provide wireless broadband access to as many as 6.5 million people.

Commenting on the submissions, Jonathan Snyder, President and CEO of KeyOn Communications, stated, “The management, employees, and key consultants of KeyOn have spent the past 3 months focusing on and refining our plan to submit these applications under the BIP for rural broadband deployment. As KeyOn is the largest and most experienced provider of wireless broadband networks specifically serving rural markets, I believe we are strongly positioned to extend the reach of broadband to the neediest areas in the country – namely the rural markets.”

KeyOn has submitted its applications in the first round of an expected three rounds, in which $2.4 billion has been set aside for funding. Importantly, the RUS will not fund more than one project to serve any given geographic area.

Mr. Snyder continued, “The goals of the Broadband Initiatives Program are aimed at enhancing rural America’s productivity and economic competitiveness by increasing broadband adoption while creating sustainable jobs. These are two goals that our plan addresses head-on and incorporates other tenets of the plan by promoting the use of broadband to a variety of public service organizations, such as schools and colleges, libraries, medical and health care centers and community support organizations. Our network design takes advantage of the latest fourth generation (4G) WiMAX technology and the newly regulated 3.65GHz spectrum, for which we hold a nationwide license.”

“With a network that currently spans 382 wireless broadband towers which has served mainly rural populations over the last seven years, we possess the experience and commitment to immediately commence construction of these next-generation wireless networks upon receipt of stimulus funds. We applaud the Obama Administration’s effort to expand broadband access into rural areas, the FCC’s foresight in making available the 3.65GHz spectrum which is ideal for the rural broadband initiative, and RUS’s efficient management of this process.”

About The Rural Utility Service (RUS) Broadband Initiatives Program (BIP)

As a part of the American Recovery and Reinvestment Act of 2009, a total of $2.5 billion was allocated to the U.S. Department of Agriculture’s Rural Utilities Service (RUS) to accelerate broadband deployment in rural areas of the country through the Broadband Initiatives Program (BIP). RUS will award grants, loans and loan/grant combinations to fund broadband infrastructure throughout the country. All funding distributed by RUS under the Act, whether grants, loans or loan guarantees, is required to be used for projects wherein at least 75% of a funded area is in a rural area that lacks sufficient high speed broadband service to facilitate economic development.

Section 6001 of the Recovery Act establishes a national broadband service development and expansion program to promote five core purposes:

a. To provide access to broadband service to consumers residing in un-served areas of the country;
b. To provide improved access to broadband service to consumers residing in underserved areas of the country;
c. To provide broadband access, education, awareness, training, equipment, and support to community anchor institutions (e.g., schools, libraries, medical facilities), or organizations and agencies serving vulnerable populations (e.g., low-income, unemployed, aged), or job-creating strategic facilities located in state or federally designated economic development areas;
d. To improve access to, and use of, broadband service by public safety agencies; and
e. To stimulate the demand for broadband, economic growth, and job creation.

RUS will favor funding projects that can, among other things, commence construction promptly and demonstrate technical and financial feasibility, organizational capacity, and compliance with other Administration priorities.

More information about the RUS Broadband Initiatives Program can be found at:

http://www.broadbandusa.gov/files/BB%20NOFA%20FINAL%2007092009.pdf

About KeyOn Communications Holdings, Inc.

KeyOn Communications Holdings Inc. (OTC BB: KEYO) is one of the largest providers of wireless broadband, satellite and voice over Internet protocol (VoIP) services in the United States, primarily targeting underserved markets with populations generally less than 50,000. KeyOn offers broadband services with VoIP and satellite video services to both residential and business subscribers across 11 Western and Midwestern states. Through a combination of organic growth and acquisitions, KeyOn has expanded its network footprint to reach approximately 50,000 square miles and cover nearly 2,500,000 people as well as small-to-medium businesses. Management intends to drive subscriber growth through additional acquisitions as well as organic growth across the company’s expanding footprint by offering bundled services including broadband, video and VoIP and related valuable services such as the Bullseye Club. Through its participation in the American Recovery and Reinvestment Act of 2009 (ARRA) and its allocation of $7.2 billion for the deployment of broadband infrastructure, among other things, the company intends to build next generation wireless broadband networks in and around its market footprint. More information on KeyOn can be found at www.keyon.com.

Safe Harbor Statement

Certain statements contained in this press release are "forward-looking statements" within the meaning of applicable federal securities laws, including, without limitation, anything relating or referring to future financial results and plans for future business development activities, and are thus prospective. Forward-looking statements may include, without limitation, the company’s expectations regarding: future financial and operating performance and financial condition; plans, objectives and strategies; product development; industry conditions; the strength of its balance sheet; and liquidity and financing needs. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside of the company’s control, which could cause actual results to differ materially from such statements. For a more detailed description of the factors that could cause such a difference, please refer to the company’s filings with the Securities and Exchange Commission, including the information under the headings “Risk Factors” and “Forward-Looking Statements” in our Form 10-KSB filed on April 15, 2009. Consequently, future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements contained herein. The company undertakes no obligation to update or supplement such forward-looking statements.