Tag Archives: BIP

People matter, not paperwork, for rural broadband development

by Steve Blum • , , , , ,

The success of broadband subsidies targeted to rural areas should be evaluated, at least in part, on the number of rural subscribers projects actually attract. That’s one of the conclusions of an investigation by the federal government accounting office into $3 billion worth of grants and loans given out by the U.S. department of agriculture’s rural utilities service as part of the 2009 stimulus program.

There were two pots of broadband stimulus money back then: the NTIA’s broadband technology opportunities program and RUS’s broadband initiatives program (BIP). I worked on grant applications to both programs, and found RUS’s standards a little more exacting – they had been in the rural broadband subsidy business for several years by that time. NTIA was completely new at the game.

But after looking at the results in 2012, the GAO said the subscribership data that RUS was using to track project success was “innaccurate” and a year later found it hadn’t improved substantially. Part of the problem is that the projects served more than just rural communities…

RUS does not track subscribership by rural area and, as a result, is not able to show the impact of the BIP program on rural broadband availability. The [inspector general] previously found that RUS’s performance information makes it impossible to measure BIP’s impact in rural areas because the information was not collected by rural area. The Recovery Act required that BIP service areas be at least 75 percent rural without sufficient access to high-speed broadband service to facilitate economic development. The rest of the project area may not be rural.

GAO is recommending formal, annual reports of how well, or not, RUS-funded projects meet the goals set out for them. That’s a good idea. The wrangling over the latest update of farm support programs consumed a lot of time and effort, but expanded rural broadband development resources. More rigorous oversight will help ensure that the money goes toward serving the people who need it most.

The broadband stimulus pool is nearly dry

by Steve Blum • , , , , , , , ,

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

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

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.

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

by Steve Blum • , , , , , , , , , ,

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.

Broadband stimulus grant update: first round still under review, second round likely to slip a bit

by Steve Blum • , , , , , , , , , , ,

Anna Gomez, deputy assistant secretary for communications and information at NTIA (National Telecommunications and Information Administration), spoke at today’s Tech Policy Summit at the Consumer Electronics Show in Las Vegas.

Anna Gomez, NTIA
 Secretary Gomez speaks to reporters
 at 2010 Consumer Electronics Show
She repeated previous agency comments about wanting to “get it done fast, get it done right and with the greatest effect possible.”

She described the Broadband Technology Opportunities Program (BTOP) as “unprecedented” at the NTIA.

Lessons learned in a difficult first round would be applied in the second round. Among those lessons is a better understanding of what sort of projects should take priority for BTOP funding.

Her comments regarding the program’s time line were:

  • The notice of funding availability (NOFA) for the second round will be released in a “few weeks”. She wouldn’t say if that means the previous target of mid-January would slip, although she left room for thinking it will.
  • The first round grants will be completed “on a rolling basis over the next two months.”
  • All grants will be made by Congress’ mandated deadline of 30 September 2010.
  • In separate comments, Karen Jackson from the Commonwealth of Virginia’s Technology Office, confirmed that there will be at least a 60 day window for second round applications, rather than the original 45 day deadline in the first round.

I spoke with Secretary Gomez afterward about some of the nuances of the application review time line and progress to date. She couldn’t provide much else in the way of details, although the inference was that the first review stage for the first round BTOP (broadband technology opportunities program) applications is still ongoing, and that not all of the projects that will advance to the second, due diligence stage of review have been selected.

She did say “our goal is to make sure people know their status in time to file in the second round.” Asked whether first round applicants could be in the position of having to simultaneously prepare a second round application and follow up on a first round application, she said “hopefully not.”

Connecting the dots, here’s my take:

  • The second round NOFA will be released around the end of January, maybe even as late as the first or second week of February.
  • If a first round application hasn’t advanced to the second stage of review by the end of the month, it won’t.
  • The second round NOFA will be more specific about program goals, be structured to encourage cooperation amongst applicants, and favor projects that include significant, shared middle mile infrastructure, with or without last mile facilities.
  • NTIA has a much better understanding now of how to run the program and what its goals should be. Don’t be surprised if the first round falls significantly short of its $4 billion target, with unspent funds redirected to specific program goals in the second round.

Secretary Gomez also announced a new program, available at match.broadbandusa.gov, called Broadband Match. It’s an online tool that is supposed to “facilitate partnerships among prospective applicants for a grant.” She said the idea is to further NTIA head Larry Strickling’s goal for the next round of favoring public/private partnerships that take a “comprehensive view” of communities.

She said that they want to ensure that key community members – meaning anchor institutions and government agencies – can access middle mile projects directly and that private companies can make use of it to create last mile services that reach consumers and businesses.

The emphasis in the second round will clearly be on middle mile projects. Gomez spotlighted the grant made to such a project in Georgia last month as an excellent example of what they’ll be looking for in the second round. The objective of the Broadband Match program is to ensure that public/private groups “can put together the most comprehensive application possible.”

First dribble of broadband stimulus funding announced

by Steve Blum • , , , , , , ,

The feds today announced they were giving $182.7 million of broadband stimulus money to 18 projects scattered across the U.S. (but nothing so far for California). 18 projects funded out of 2,200 applications, representing less than 3% of the $7.2 billion allocated.

Not much detail but a few worrisome hints.

The infrastructure grants announced today all appear to be for RUS/BIP-type projects. Even the ones that were funded through NTIA/BTOP. That’s consistent with what we heard back in September: a select few RUS projects were fastracked into the second stage of review.

RUS is going down a familiar path – giving money to rural clients. Unlike NTIA, RUS has the staff and experience to do this work, they didn’t have to start from scratch. Even so, it took four months to process a handful of grants.

From the Associated Press:

The administration plans to award a total of $2 billion in grants and loans on a rolling basis over the next 75 days as it starts doling out the first round of stimulus funding for broadband.

Nice, but the first round was supposed to total $4 billion. Are they cutting the first round in half? Dragging it out past the end of February? Or did someone get the number wrong? Let’s hope it’s a typo. $2 billion is about what RUS was supposed to give out. Maybe they’re only referring to NTIA. Or maybe only RUS has its act sufficiently together to get anything done in the next two or three months.

From StimulatingBroadband.com:

NTIA head Lawrence Strickling “yesterday stated that “300 to 400″ project applications for broadband stimulus funding are now being reviewed…in the due diligence phase.”

What’s not clear is whether the other 1,800 or 1,900 applications are still in the queue, or have been rejected. If 1,800 apps are still sitting in someone’s in-box, we’re in for a long wait. If some or all have already been rejected, we need to know.

NTIA and RUS also just posted the comments they received regarding Round 2. It’s a lot of reading.

This process might take a lot longer than anyone ever thought.

CPUC Approves $5 Million for central California coast broadband project

by Steve Blum • , , , , , , , ,

The California Public Utilities Commission (CPUC) unanimously approved a $4,975,009 grant from the California Advanced Services Fund (CASF) to the Central Coast Broadband Consortium (CCBC) on Friday, 20 November 2009. The grant pays for 10% of the approximately $50 million fiber optic trunk line network planned for Santa Cruz, Monterey and San Benito counties on California’s central coast.

CCBC system map

CCBC’s CASF and associated federal stimulus grant applications are managed by Tellus Venture Associates, which also does the financial planning and budgeting for the project. In August, the CCBC submitted a proposal for a $40 million grant to the National Telecommunications and Information Administration’s (NTIA) Broadband Technology Opportunities Program (BTOP) and the Rural Utility Service’s (RUS) Broadband Initiatives Program. The remaining $5 million has already been committed by consortium members.

CPUC’s approval follows endorsements by California Governor Arnold Schwarzenegger and congressman Sam Farr, who represents the three county region. NTIA and RUS are reviewing the grant proposal, with a decision expected next month.

The project would create a 428 mile fiber optic backbone linking unserved and underserved areas to better served communities, and connecting the entire region to Tier 1 Internet facilities in Silicon Valley. Using a loop architecture, any point on the network would have two independent paths to any other point, and to the Internet.

Current plans are for the system to be operated by a cooperative, which will offer access on a wholesale basis to last-mile Internet service providers and major institutional customers.

Handicapping the BTOP Derby and the BIP Stakes

by Steve Blum • , , , , , , ,

The California Public Utilities Commission (CPUC) put on a great show in San Francisco on Friday. Hosted by Commissioner Rachelle Chong, and featuring State of California CIO Teri Takai, Susan Walters from the California Emerging Technology Fund (CETF), and several very well prepared staffers, the workshop covered the essential details you need to know in order to apply for NTIA’s BTOP (Broadband Technology Opportunities Program) grants or RUS’s BIP (Broadband Initiatives Program) money, and to have a hope of getting matching funds from either CPUC via the California Advanced Services Fund (CASF) or CETF.

The presentations and audience questions shed some light – sometimes intentionally, sometimes not – on what’s going on behind the scenes as the mad scramble to file applications by the 14 August 2009 deadline continues. The presentations, handouts and other items of interest are posted on my website.

Here’s how I see it…

BIP Loans and Grants
The Rural Utilities Service is out in front by furlong, before they’ve even hit the first turn. RUS has more than 70 years of experience milking Washington on behalf of its clients and it shows. It’s going nearly all in on this round, offering $2.4 billion now and leaving only $300 million for future rounds. That way, the rural carriers it supports can come back for NTIA money in the second and third rounds. And its written its rules to favor the good old boys. Existing recipients of RUS pork get explicit priority for funding, and the grantmaking criteria – which look impenetrable to the uninitiated – are as familiar as a dead armadillo to those in the know.

BTOP Broadband Infrastructure Grants
If you’re a regional telephone company, you live and breath the detailed documentation required to submit an application. Broadband availability and subscribership levels down to the census block level? No problem, we have a junior analyst keeping our database warm just in case someone asks. Plans certified by a professional engineer? Financials done to GAAP standards? Long list of people we won’t fire, I’m sorry, of jobs created or preserved? No worries, it’s already posted on our web site. And so it goes.

For well prepared community broadband proposals – projects that are well along the pipeline – there’s a glimmer of hope. Everyone else, get in line and expect to stay there, even if you’ve kept your project under the $1 million threshold because you thought it meant an easier ride. $1.2 billion is on the table this round. Here’s how I see the applications shaking out:

  • Rock solid proposals, written almost as if they knew in advance what the questions would be: 500 to 1,000, mostly incumbent telcos and big MSOs (okay, in innovative coalitions and public/private partnerships with blah blah blah).
  • Arguably complete applications that might or might not withstand several rounds of reviews, including a 30 day challenge period when the telcos can rip them to shreds: maybe 2,000 applications, covering a mixed bag of CLECs, cable companies, cities, middle mile providers and eternally optimistic entrepreneurs.
  • Hail Mary requests for $999,000 written by the summer intern: 5,000 requests from middle managers who want the boss to think they did it by working through lunch hour. Caveat: this estimate is subject to revision. There might not be 5,000 middle managers still employed in America.

Infrastructure projects funded: 100 to 150, mostly to the big telcos, with some small fry included to make it look like the fix wasn’t in.

BTOP Public Computer Center Grants
Every school, community college, local government, Boys and Girls Club and Elks Lodge with a grant writer will apply for this one. Expect 10,000 or more applications for the $50 million available, with maybe 500 awarded. The bulk of the money will go towards program costs, not hardware, which means something like 1,000 jobs funded for a year or less.

BTOP Sustainable Broadband Adoption Grants
Huh? Oh, you mean you didn’t know we’re giving priority to projects that are allied with larger ARRA-funded stimulations? Sorry about that, but if you’ve scored a big health services or education grant, be sure to stop by the BTOP desk on the way out to pick up a few million for a telemedicine or distance learning add-on, after all we have $150 million that’s shovel ready this round. Everyone else, well, thanks for sending in those 20,000 applications, and we apologize for not explaining what sustainable broadband adoption means. We figured it would be really funny to just let everyone guess.

Don’t forget to reapply in round 2!