Tag Archives: ARRA

Central California fiber network about to go fully operational

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An 850 mile fiber build that threads through 18 counties in central California – largely paid for by the 2009 federal broadband stimulus program – is almost done. The Central Valley Independent Network, which now does business as Vast Networks will finally be complete by the end of May, according to marketing director Mike Stewart, who gave a presentation on the project at today’s Central Sierra Connect Broadband Consortium conference in Tuolumne City.

The final gap is just to the west, along highway 108, near Jamestown.

“Once you get up here it slows down considerably”, said Stewart. Crews that could bore through 2,000 feet a day of soft dirt were barely making 100 feet in the rocky Sierra foothills ground. “We had a number of contractors just walk away, they got tired of fighting the battle”.

Just getting the environmental clearances required to start work took 14 months.

The entire system, including purchased and leased lines, reaches 2,000 miles and connects to major Internet exchanges in San Francisco and Los Angeles. It’s a joint venture between eight small, mostly rural telephone companies and the Corporation for Education Network Initiatives in California (CENIC), which provides broadband connectivity to school districts, colleges and universities in the state.

Stewart said they’ll lease dark fiber where it’s available, but their primary offering is wholesale lit service for independent ISPs and major institutions. Initially the plan was to deliver two 1 gigabit connections to county offices of education, for redistribution to local school districts, but demand has grown so fast that those lines will be upgraded to 10 gigabits each.

Almost heaven is broadband hell

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I love red meat on a Friday night (h/t to the Baller Herbst List for the heads up). Broadband/DSLreports.com has a delicious post detailing the public meltdown of a Frontier Communications executive when pressed on the highly technical question of “just how freaking fast is your DSL in West Virginia?”…

‘I’ll have an engineer talk to you about the technology we use on that,’ said [Dana] Waldo, senior vice president and general manager of Frontier’s West Virginia operations.

When [a competitor] alleged that Frontier’s broadband DSL service does not offer the 1-megabit upload speed, Waldo was unable to actually answer the question and instead decided to get personal:

“That is not correct, Jim,” Waldo said. “I wasn’t going to bring this up, but I am absolutely beside myself. I feel so sorry for you, that you are so desperate to make you and Citynet relevant and, apparently, keep it afloat. Jim, it’s over. I’m done talking to you. I’m done … wasting my time responding to your mischaracterizations. I’m not going to sit here and waste my time and hear more of his nonsense,” Waldo continued. “I’ll excuse myself.”

It happened while officials were considering a grant to subsidise competitive service in a local area where Frontier is supposed to be delivering Internet connections at West Virginia’s minimum standard of 4 Mbps down/1 Mbps up.

It might just be that Frontier has sent a man to match West Virginia’s mountains. Well, OK, hills. The state has its own broadband project problems. It’s in a battle with the federal government over allegedly misspent broadband stimulus money. Keep in mind, despite what it says on the license plates, the unofficial state motto is “thank god for Mississippi or we’d be 50th in everything”.

TURN for the better, but not the worse among CASF hopefuls

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The Utility Reform Network (TURN) likes the idea of making California Advanced Services Fund subsidies available to more than just traditional telephone companies. But not to just anyone, saying “TURN shares the Commission’s concerns…that ratepayer money used to fund the CASF program must be protected from waste, fraud and abuse.”

The Commission’s Division of Ratepayer Advocates (DRA) echoed those concerns, calling for safeguards if CASF eligibility is expanded.

TURN’s answer is to apply the standards set by the CPUC three years ago when it gave CASF matching grants to successful applicants funded by the federal stimulus program (ARRA). It was done under a special exemption granted by the California Legislature.

The CPUC’s solution at the time was simple. All CASF applicants would meet the same qualifications and pass the same background check that traditional telephone companies have to endure when they apply for a Certificate of Public Convenience and Necessity (CPCN).

The existing CPCN application process requires the applicant to demonstrate its financial, technical and managerial competence by submitting information such as the company’s balance sheets proving its liquidity and biographical information on its management team demonstrating sufficient management experience and expertise to operate as a telecommunications provider. The applicant is also required to comply with the California Environmental Quality Act (CEQA)…CPCN applicants are also required to submit information relative to background considerations on the business, its principal owners, and managers to enable the Commission to conduct a background check.

The Commission also required applicants to post a performance bond, submit to financial audits as needed and generally follow CPUC rules, particularly ethics requirements.

Half a dozen ARRA projects were eventually funded in part by CASF, with and without CPCNs. Based on the CPUC’s latest report, none of those have been completed. So there’s no definitive track record to point to yet. But there’s no reason to think they’re doing any worse than traditional telephone companies or that they won’t be able to keep to the schedules established by ARRA.

Digital 395 is one of those projects, and they weren’t able to even begin construction until this past summer because of the challenge of meeting the (sometimes conflicting) regulatory requirements imposed by twenty three separate agencies. Not least of which is CEQA compliance, which is integral to the CASF program. They’re still on track to finish by next summer’s deadline.

Traditional telephone companies are not the only game in town. Many private companies and public agencies are equally solvent, competent and experienced. On the other hand, many are not and the Commission has the tools in hand to weed them out.

TURN is absolutely right to conclude that “a reasonable, rigorous process can in fact deliver results and lead to enhanced availability of broadband.”

Performance, not passion, builds broadband projects

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Most of the opening and reply comments about expanding eligibility for California Advanced Services Fund (CASF) subsidies, my own included, can be summed up in three words: gimme, gimme, gimme.

Grant writers want to write grants, public agencies want to back fill budgets, independent ISPs want to play like the big boys and the big boys – telephone and cable companies – want to keep it for themselves. No surprise.


The road to broadband is paved with competence. Good intentions lead somewhere else.

Two organizations, though, pretty much make their living commenting on CPUC proposals: the Commission’s own Division of Ratepayer Advocates (DRA) and The Utility Reform Network (TURN). Both filed opening and reply comments, and although they came to opposite conclusions, their concerns were remarkably similar.

DRA opposes expanding eligibility for CASF grants and loans. They don’t like the idea of lowering the bar that applicants have to clear, “especially since such entities likely have no demonstrated expertise in telecommunications or in building broadband facilities.”

After reading everyone else’s opening comments, they were unimpressed with the focus on general benefits rather than concrete projects, noting “the overall lack of specificity underscores DRA’s cautions about opening up CASF eligibility and concern over these entities’ lack of technical expertise to implement broadband projects.”

It’s a good point, if unfairly broad. CASF exists to fund bad broadband business cases. Paying down the capital cost is only half the battle. It takes skill, creativity and experience just to cover operating costs in problematic areas. Good intentions and positive community vibes are not enough.

Many independent ISPs have that kind of managerial horsepower. The expansion of DSL and cable modem service coupled with the natural advantages of scale the big boys bring to the table have put many out of business. But the survivors are the smart and nimble ones.

It also makes sense to look to publicly owned utilities – municipal electric systems and water districts are two examples – for expertise and resources. With secure finances, existing customers, back office systems, skilled technicians, equipment and right of ways, bona fide publicly owned utilities have the kind of assets that can make a difficult business case achievable.

DRA’s closing advice is to recommend “added oversight and safeguards to help guard against fraud, waste, and abuse of ratepayer funds” if the Commission expands CASF eligibility. TURN has some ideas for accomplishing that. More tomorrow.

Eastern California lights up in July

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“We have started and we will finish,” said Michael Ort, CEO of Praxis Associates, the company behind the Digital 395 project. “There have been people who have bet against us and that’s a great motivator. It’s going to happen.”

The ambitious, ARRA-funded network will connect Reno to Barstow, in the California desert east of Los Angeles, installing nearly 600 miles of fiber optic cable. Most of the path runs along U.S. 395, down the eastern side of the Sierra Nevada through towns like Carson City, Mammoth Lakes, Bishop and Ridgecrest.

Ort was giving an update to a community broadband forum organized by the Eastern Sierra Connect Regional Broadband Consortium in the Mono County town of June Lake. The project has been enthusiastically backed by local officials and residents, who are eager to bring high capacity, carrier grade middle mile connectivity to the many small towns, communities and tribal lands along the way.

But even with that support, bureaucracy has been the biggest obstacle he’s had to overcome.

Problems have come from the maze of state and federal regulators that have a say. Twenty three different agencies had to sign off on project plans, a process that ate up two years of what is supposed to be a three year project.

“You have to satisfy everyone’s needs,” said Ort, explaining that different agencies have different objectives and sometimes exactly opposite requirements. For example, one might ban digging along a certain route while another might require it. Approvals included individual permits for almost 400 archeological and historic sites.

Even so, Ort is confident they’ll have it operating by the 31 July 2013 deadline.

The project is funded by $81 million from the 2009 federal stimulus bill, under the Broadband Technology Opportunities Program (BTOP), and $19 million from the California Advanced Services Fund. Ort says construction costs – not counting permits and environmental clearances – are running between $25 and $30 a foot. Much of the work involves plowing fiber into the ground, but some it requires using a giant “rock wheel” to chop through granite.

When it’s done, Digital 395 will dramatically reduce the cost of connecting to the Internet from eastern California. Customers will primarily be major institutional users, Internet service providers and other resellers, and major telecommunications companies that want a back-up path between northern and southern California. Plans are to price 100 Mbps of Internet connectivity in the one thousand dollar range, using traditional T-1 lines as both pricing and quality of service benchmarks. Simple Layer 2 – Ethernet – connectivity would be about $6 per Mbps, under current plans. Pricing would be flat and not dependent on distance.

The broadband stimulus pool is nearly dry

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BTOP might have $442 million in the kitty, although almost certainly not. Or $257 million or $15 million or zilch. For BIP, I can’t even estimate what’s left, but my best guess is that money is already gone.

First, I want to give credit where credit is due. Fred Dyste, via his Digital West blog, has been the gold standard for tracking BTOP (Broadband Technology Opportunities Program) and BIP (Broadband Initiatives Program) stimulus grant applications and awards. He’s been delivering invaluable tracking and analysis of who’s asking for money and who’s getting it. Most of the numbers I’m using were provided by Fred.

Yesterday, about $482 million in BTOP grants were announced for several states, along with about $518 million in BIP grants and loans. On Friday, Hawaii received $35.9 million in BTOP grants. Adding those numbers to Fred’s tabulations for the first round of BTOP/BIP grants and his running total to 28 August 2010, the total for infrastructure, public computer center (PCC) and sustainable broadband adoption (SBA) BTOP awards is $3,791 million and $3,516 million for BIP awards (allowing for the cancellation of a $19 million BIP award).

The stimulus program originally gave $4,700 million to BTOP and $2,500 million to BIP. On that measure, the Rural Utilities Service (RUS) has given out an extra $1 billion. They can do that because they are giving out grants and loans, which are accounted for differently, and they have some separate funding for the loan program. Do they have any more money to give out? Maybe.

The National Telecommunications and Information Administration (NTIA) is only making grants and they don’t have deep pockets of their own to dip into. In fact, Congress has already pulled back $302 million from the program to spend on other things, leaving only $4,398 million. The math looks like this:

CategoryGrants Made
Infrastructure$3,506 million
Public computer center$127 million
Sustainable broadband adoption$159 million
Mapping allocation$350 million
Total$4,141 millon

So in theory, that leaves $271 million to spend on non-mapping BTOP projects. Fred has tracked $179 million in mapping grants, so maybe there’s another $171 million available, bringing the total to $442 million. But I doubt it. NTIA is saving a big chunk of the mapping work for itself, and there’s no reason to think they’ll let go of that money.

In fact, NTIA might be keeping a bit more for itself. Originally, NTIA said that only $2,600 million was available for infrastructure, PCC and SBA grants in the second round, and they’ve given out $2,585 million. On that basis, there’s only $15 million left, without even counting the $302 million Congress clawed back.

The original stimulus bill set aside $200 million for PCC grants and $250 million for SBA grants. However, in cutting money, Congress didn’t specify how to spread the cuts around. If you figure things, like Fred does, on a pro rata basis, that means subtracting $47 and $29 million from the PCC and SBA categories respectively, so those programs are tapped out. But NTIA has considerable discretion when it comes to running BTOP, so maybe not. If there is any remaining money, it could go anywhere.

Building community broadband: three things that work without stimulus grants

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The California Emerging Technology Fund (CETF) has funded several regional broadband consortia in northern and central California. At its third annual Rural Connections workshop in Redding this week, representatives from six groups presented the results of their work over the past couple of years. Two, covering California’s Gold Country and Redwood Coast, stood out as having made genuine progress toward bringing Silicon Valley-grade Internet service to areas that are otherwise off the broadband map.

Gold Country Connect's interactive web tool
 Gold Country Connect provides prospective investors
 with broadband planning tools
Brent Smith, CEO of Sierra Economic Development Corporation, and Connie Stewart from Humboldt State University had success stories to tell. Three key lessons stood out:

1. Seek out motivated investors, including competitive local exchange carriers and independent Internet service providers, and find ways to improve their business cases and nudge them towards your goals. Don’t waste everyone’s time trying to bribe or bully them into accepting your plans or implementing your programs. A patchwork of operating networks beats a pristine concept with no takers, every time.

2. Do your homework and make sure it’s A-grade. Simple, quantitative market research that identifies market gaps and charts statistically valid demand at defined price points is pure gold to private sector investments analysts. A centralized broadband mapping project with service provider buy-in, like that run by Chico State University, puts the cards face up on the table and lets everyone get down to business without posturing and poor mouthing.

3. Subsidies help, but don’t necessarily need to be large. A guaranteed loan, a little local capital, even a tax break can tip the balance for a potential private sector broadband investor. When bigger subsidies are needed, the lion’s share of the risk can still fall on private investors. The California Advanced Services Fund will do a 40% match against private capital in underserved areas, and that’s been enough for hundreds of kilometers of fiber.

Unified community support is important, and creates a level of comfort that the project can be implemented. Leadership is needed to gain rights of way, permits and variances, and overcome bureaucratic inertia. Business analysts are more impressed by political muscle and professional, statistically valid research than they are by crayon drawings from a third grade class.

Real progress in other CETF-sponsored consortia has been hampered by a focus on community feel-good exercises and unworldly research. Evidently, Chico State’s mapping expertise is not matched by its economics department: someone there seems to think you can do a demand aggregation study without asking tiresome questions about price elasticity. The good thing about this kind of conference is that public sector decision makers get to see what works and what doesn’t, and can respond appropriately.

The last item on the conference agenda was the decision to come back for a fourth year. Expect to see a longer list of success stories.

The stimulus was fun while it lasted, now back to work

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It’s time to look past the stimulus program, and re-adjust community broadband planning assumptions. The National Telecommunications and Information Administration’s (NTIA) Broadband Technology Opportunities Program (BTOP) and the Rural Utilities Service’s (RUS) Broadband Initiatives Program (BIP) encouraged local groups to roll themselves up into regional alliances and propose magnificent projects that would meet any conceivable need and serve every user imaginable.

It made sense, because that’s where the money was. NTIA and RUS made some dreams real in the first round last year, and are on track to fulfill a few more fantasies in the second round. But even though BTOP is reopening for what amounts to a stunted, public-safety focused third round, the good times are over and we have to return to the old normal.

It’s a world where the free money is mostly gone. Once the BTOP money is spent, NTIA goes back to being a small agency running small programs. In rural areas, RUS and state programs, like the California Advanced Services Fund (CASF), will provide grants and loans to organizations with a qualifying track record and, in some cases, enough cash to fund half or more of proposed projects themselves.

first round BIP funding funnel
 Adelstein and RUS general
 field representative Harry Hutson showed
 CETF conference attendees in Redding
 how the first round BIP money went
 down the spout
RUS won’t fund projects that compete with their existing loan portfolio, however. Speaking to the California Emerging Technologies Fund’s third annual Rural Connections workshop in Redding this week, RUS administrator Jonathan Adelstein made it clear that the agency will give priority to organizations that it already funds, and won’t subsidize competing projects.

CASF expects it will continue to fund new broadband projects in California, but only in areas where AT&T, Verizon and the cable companies fail to upgrade infrastructure. A few arguable urban pockets aside, it’s the remote rural regions that have a shot.

Elsewhere, community broadband advocates will have to go back to the basics. Tried and true economic development strategies, like public-private partnerships, tax breaks and other incentives, and old fashioned salesmanship, will be effective. But only where public agencies and community advocates can present a focused and well documented business case and be flexible enough to accept that private capital comes with its own priorities.

The old normal is a world where subscriber metrics, return on investment and anchor tenants trump grand visions, sad stories and political grease. Painstaking determination and hard work count again, though. That’s a world worth calling home.

Best Practices Highlight Wireless Broadband Feasibility Study for the City of Oakland

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Download the Oakland Wireless Feasibility Study

Like nearly every government agency in California, the City of Oakland was faced with increasing demand for public services and a decreasing budget. An evaluation was needed of the potential for wireless technology to make municipal staff more efficient and allow them to stay in the field longer, and to provide Internet service to residents, either directly in their homes and businesses or indirectly through community anchor institutions. This evaluation needed to focus specifically on Oakland’s diverse population, needs and terrain.

The City’s goals were:

  • Enhance economic development by enabling businesses to operate more effectively and by making Oakland a more attractive place to live, work, and visit.
  • Improve public safety by putting more police officers, fire fighters, inspectors and public works staff into the field, keeping them there longer and letting them work more efficiently.
  • Increase the effectiveness of public, private, and nonprofit organizations through improved access to state of the art broadband wireless technology.
  • Help overcome the digital divide.
  • Improve the quality of life for all Oaklanders.

Tellus Venture Associates was brought in to do a comprehensive feasibility study that would include public focus groups, workshops and a town hall meeting, close coordination with City departments and outside agencies, and a technical survey that included radio frequency modeling over the hills, canyons, flatlands and waterways within the city limits.

When we analysed the research data, the trends that emerged tracked closely with the best practices we’ve developed during seven years of municipal and community broadband experience. The result was a more refined list of those principles:

  1. No matter what the manufacturer says, the laws of physics still apply. No matter what the special interests say, sound business principles still apply. Don’t underestimate the public’s appreciation of physics and sound business principles, or overestimate its regard for manufacturers and special interests.
  2. City-owned and operated metropolitan area networks are a cost effective means of extending information technology infrastructure and resources to local government facilities and employees.
  3. Providing broadband connectivity to targeted community anchor institutions can be financially and technically feasible for cities, and is supported by public opinion.
  4. Providing universal, consumer-grade wireless Interet access is not financially or technically feasible for cities, and is not supported by public opinion.
  5. Cities can better promote digital inclusion by enabling and supporting a competitive broadband environment.
  6. Widespread public awareness and support precedes deployment of a successful municipal broadband system.
  7. Fiber optic and wireless technologies can be effective choices for network backbone segments, depending on capital and operating cost, timing, right-of-way, capacity and other considerations.
  8. Fiber optic and other landline technologies provide orders of magnitude more bandwidth and many more years of useful service life, with lower operating costs.
  9. Wireless technologies can be deployed faster and at much lower capital expense, and provide greater flexibility to change network topologies and service models to meet future needs.
  10. Wireless technologies have the unique ability to support municipal staff in the field, particularly public safety personnel, but should only be deployed after an independent evaluation of technology, terrain and available spectrum.

With these principles in mind, we assessed the Oakland public’s needs and priorities, designed a reference architecture that could meet those needs, and developed a business model that quantified the benefits, demonstrated the value proposition and identified the money to pay for it all.

Our findings were:

  • A point-to-point wireless broadband system serving specific community and institutional needs is financially and technically sustainable for the City of Oakland.
  • The cost of building and operating such a system can be met through identifiable cost savings, efficiency gains and budgetary choices based on the economic value of the benefits produced.
  • Public Internet access by way of community anchor institutions is financially and technically feasible, and universally supported by a diverse range of Oakland residents, organizations, agencies and businesses if it is implemented in a fiscally sound manner.
  • Enabling entrepreneurial opportunities for local businesses on a pay-as-you-go, public-private partnership basis is also backed by Oakland stakeholders and supported by the financial and technical analysis conducted for this study.
  • Providing wireless Internet service to residences or individual consumers is not financially sustainable or technically feasible for the City of Oakland, and is opposed by nearly all stakeholders, who cite the widespread technical and financial failure of such systems in other cities.

The next step was to secure the funding. Some of it came from the cost savings created by replacing a large number of low capacity, leased land lines with a comprehensive wireless backbone, comprised of high capacity point-to-point links using licensed spectrum. Some of it came from money budgeted for expensive cellular data service. In other cases, savings in man-hours and increased productivity, including more and better field audits by tax officers, offset operating costs.

Finding the money to pay for the capital expense was a different problem. Bonds were not an option, given the uncertainty of future budgets. Some of the funding could be raised locally, through public-private partnerships, but not all of it.

Fortunately, the conclusion of the study coincided with the establishment of the American Recovery and Reinvestment Act, also known as the federal economic stimulus program, which included $7.2 billion for broadband projects. With its emphasis on public safety, community anchor institutions and economic development, the broadband infrastructure plan created by Tellus Venture Associates for the City of Oakland was ideally suited to meet the program’s requirements.

The stimulus grant application had to wait until the second round of funding, because the first round emphasized rural projects and all but excluded urban areas from eligibility for broadband infrastructure funding. At the same time Google announced its own broadband grant program, which likewise tracked with the best practices we incorporated into the study. Both applications are now pending.

The final step will be to move ahead with construction of the system. Tellus Venture Associates prepared a draft Request for Proposal, which sets out the specifications for a municipal broadband system that would serve the City of Oakland. In some cases, such as providing broadband connectivity to public safety personnel in the field, the technology that would be employed is necessarily wireless. But in other cases, for example the core network backbone, wireless, fiber optic or other technologies are all possibilities. Those determinations, as well as any decision to release an RFP, will be made by City staff, once funding is secured.

Oakland Wireless Feasibility Study

Printable, high resolution version

City of Oakland staff report

Study presentation to Oakland City Council

City of Oakland wireless reference architecture

Oakland townhall meeting presentation

Follow the money, from the first to the second round of broadband stimulus grants

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More than a thousand first round hopefuls are still staring into the black hole that swallowed their applications. The second round notifications of funding availability (NOFAs) issued by the Rural Utilities Service (RUS) and National Telecommunications and Information Administration (NTIA) for the broadband stimulus program do not explicitly address the status of first round applications.

The stimulus bill gave RUS $2.5 billion and NTIA $4.7 billion for broadband project funding. In the first round, RUS said it would give out up to $2.4 billion. Now its saying it’ll give out a total $2.2 billion in the second round. The target budget is:

CategorySecond Round
Last mile projects$1.7 billion
Middle mile projects$300 million
Satellite projects$100 million
Libraries, tech assist$5 million
Reserve$95 million
Total$2.2 billion

That leaves $300 million, which presumably goes to first round grants and, presumably, overhead. So far, RUS has only announced $54 million in first round grants. It still has first round applications in the due diligence stage of review, so any applicant that’s made it that far has a plausible hope of winning funding. The lion’s share of RUS’s money is shifting to the second round, so if you haven’t heard back about first round review yet, I suggest you start thinking about round two.

Unless you also put in a joint bid to NTIA. Including broadband mapping grants, NTIA allocated nearly $2 billion to first round projects. It’s allocating a total of $2.6 billion for the second round:

CategoryTotal TargetedFirst RoundSecond Round
Infrastructure$3.55 billion$1.2 billion$2.35 billion
Public computer centers$200 million$50 million$150 million
Sustainable adoption$250 million$150 million$100 million
Mapping$350 million$350 million-0-
Reserve$200 million$200 million-0-
Total$4.55 billion$1.95 billion$2.6 billion

The two NTIA rounds match up pretty closely with the targeted totals. There’s $150 million unaccounted for, but that’s a believable overhead number for a federal operation.

The inference is that the two rounds will be processed, considered and funded separately. As it lays out now, if you have a first round NTIA application that’s disappeared into the process, it’s possible that you might yet advance to the due diligence stage. But that possibility diminishes as time goes on, particularly if NTIA sticks to its end-of-February target for closing out the first round and its 30-day due diligence period.

The second round workshops start next week, and more information should be available by then. My advice to first round applicants who haven’t heard from NTIA yet is to spend this week beginning to form the community alliances that it advocates so enthusiastically. It won’t be wasted effort, even if you slide into the first round under the wire.