Handicapping the BTOP Derby and the BIP Stakes

12 July 2009 by Steve Blum
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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!