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Broadband Stymied

Unfortunately, no matter what else the stimulus bill may or may not have done, it’s slowed down the rate of broadband deployment in the US over the last year. The Rural Utility Service (part of the US Agriculture Department) and NTIA (part of the US Commerce Department) have awarded only 15% of the first round money they promised to make available. To be blunt, they failed in their mission. They are now poised to compound that failure with an absurd deadline of March 15 for second round applications prior to availability of first round results.

Telecom providers and community projects alike concentrated on their stimulus applications from passage of the American Reinvestment and Recovery Act (ARRA) in February of 2009 until the application deadline in midAugust of last year. Money was (and is) hard to get, so looking for a share of the promised $7.2 billion of ARRA money seemed like a good idea even though the odds were long. According to NTIA, there were $19 billion in requests for the $1.2 billion they intended to make available in the first round. RUS says that they had $28 billion in requests for $2.5 billion in grants and loans. Even with some applications being to both NTIA and RUS, the odds were at least ten to one against any individual applicant!

The grants were supposed to be announced in October; everyone waited. The first announcements were made in December. A few more have dribbled out since. So far the agencies have announced awards for only about 15% of the money they said they would make available in round one. Doing the math, the odds go to a staggering seventy to one against getting funded (so far) in round one. Probably not many applicants would have spent the money they did on applications or waited so long to move ahead if they’d known how long it would take for so little to be given out.

But it gets worse.

Without having finished notifying people whether or not they have round one grants, NTIA and RUS recently announced that March 15, 2010 is the deadline for round two (the final round) of broadband applications. Applicants, of course, must prepare applications immediately; more first round information is supposed to dribble out; but, as of now, there’s not nearly enough information about round one.

  • Many applicants have not yet received word of whether or not they’ve been chosen. This means, if not selected, they haven’t received the promised information on why they were rejected which would certainly be helpful in preparing a new application. If they’ve been selected, in whole or in part, a new application is, of course unneeded (some may be on some sort of waiting list but there’s no information on that).
  • Since we don’t know for sure what awards remain in round one, we don’t know which territories still need coverage.

Particularly frightening is that incumbent carriers were allowed to provide non-public information to dispute the claims of applicants that their projects would extend coverage to unserved Americans but there is no mechanism for making either the allegations public or for applicants or states to dispute the data which may have been used to disqualify applications. This is hardly transparency. See http://www.ntia.doc.gov/broadbandgrants/applications/responses/722pnr.pdf for an example of a filing by Comcast apparently challenging a request by Vermont Telephone Company (VTEL). Nothing against Comcast; but, if they are going to dispute coverage data, they should have to make their own data public and subject to rebuttal.

So what should be done?

An organization called National Association of Telecommunications Officers and Advisors (mainly non-profits and community organizations) has called on NTIA and RUS to move the deadline out to May 1 so that first round information will be fully available to second round applicants. That’s a good start but it’s not enough; there’s no reason to think RUS and NTIA will do a better job of awarding the second round money plus the unawarded remainder of first round money than they did in administering the first round—especially now that they must also finish the award process and start monitoring for those projects which were funded.

  • There is a statutory deadline of September 30, 2010 for awarding all the money. The agencies can’t waive this so Congress may have to extend it.
  • The agencies should, as many of us urged them to do in the beginning, give the states a significant role in the process both to assure grants comply with state plans and just to speed up the grants with local knowledge. Fine with me if Congress just delegates all of this to us at the state level.
  • No one should be allowed to use non-public data to impugn applications and rebuttals must be allowed.

Counter-cyclical Government programs which are a day late and a dollar short are worse than no program at all. It’s already clear that the broadband stimulus money isn’t going to be spent during the latest recession. The unfulfilled promise of the money has slowed down broadband progress and cost jobs. Just leaving the money in the private sector from whence it came (or from whence it will come when the bills are due) would have been much better than dangling an undelivered carrot of stimulus.

By Tom Evslin, Nerd, Author, Inventor

His personal blog ‘Fractals of Change’ is at blog.tomevslin.com.

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Application rebuttals Frank Bulk  –  Feb 27, 2010 1:40 PM

Particularly frightening is that incumbent carriers were allowed to provide non-public information to dispute the claims of applicants that their projects would extend coverage to unserved Americans but there is no mechanism for making either the allegations public or for applicants or states to dispute the data which may have been used to disqualify applications.

Speaking from the perspective of one of those that provides existing service, why should I be spending tens of thousands of dollars proving that the potential applicant (and competitor) does not meet the broadband stimulus requirements?  The burden of proof should have been put on the applicants to prove the penetration and service level numbers, not the existing provider.  What happened is that applicants made wild assumptions and claims (i.e. number of businesses in an area), and the existing provider had to find the resources internally, or via hired consultants, to fill out the paperwork and refute them.  Each “incumbent” filing a rebuttal should have been able to have some of their costs reimbursed from this program!  This broadband stimulus deal raised the costs of the “incumbent” providers. 

There wasn’t enough accountability for the applicants.  Not that it should have risen to the level of perjury, but applicants should have had their company chief attest that what was in their application was true, and if not, face some kind of penalty.  Some may argue “how would applicants know”?  They could have performed surveys and done a market-by-market analysis, which is what real businesses do before entering a new area!

As to the use of non-public information—why should private firms be required to disclose market sensitive and potentially competitive information because of an application made by a fly-by-night firm (that’s an over-caricaturization, but there were many of those, if you look at some of them)?  The issue goes back to the fundamental one—the mapping process should have been completed first, to identify the need, and then the FCC should have drawn up requirements that required applications to address those needs (i.e. the application must address the top 500 worst areas of broadband access).


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