Broadband on the Slopes

By Brad

Geoff Daily of App-Rising has concerns about how projects are being chosen for broadband stimulus funds:

Last night CNN aired a story during the Situation Room highlighting two participants in the first round of the broadband stimulus.

The first was Hiawatha Broadband, a terrific rural broadband deployer in southeastern Minnesota. They interviewed a host of people about how the hardscrabble rural towns Hiawatha was aiming to serve don’t have broadband at all, and as a result their public safety is in jeopardy as they have no efficient way to communicate during an emergency. Unfortunately, despite the fact that they’re a poster child for the types of communities the broadband stimulus is intended to help, their application was denied.

Then CNN went up to Bretton Woods, NH, where RUS did find a project it deemed worthy of funding, namely building fiber to 400 skiing chalets. I’d been suspicious about this program already, but CNN put an even finer point on it: only 40 of those homes actually have full-time residents.

The Tax Man

By Bruce

With broadband stimulus funds slowly making their way to applicants, a new wrinkle has emerged that may slow down recipients putting the money to good use. As Phone Plus reports, it comes down to the question of taxes:

[I]f the government doesn’t clarify whether the grants are considered taxable income, onlookers fear recipients won’t use the money any time soon – defeating the purpose of the 2009 American Recovery and Reinvestment Act.

When asked whether recipients would be taxed on the stimulus funds, the Treasury Department reportedly offered no concrete answer. Stay tuned…

Grants From RUS

By Bruce

The Rural Utilities Service has announced the latest round of broadband stimulus funds, with 11 states receiving grants this time around: Alaska, Alabama, California, Iowa, Kansas, Tennessee, Louisiana, Missouri, North Dakota, Oregon, and Virginia.

All told, 14 projects are receiving funding, totaling $310 million.

(Via Broadband Breakfast.)

Grants Beginning to Arrive

By Bruce

Vice President Biden is in Georgia today, where he’s expected to announce that $182 million in broadband grants from the American Recovery and Reinvestment Act will be awarded to 18 projects.

While this is a great step toward the goal of nationwide broadband access, much more needs to be done — and soon. As GigaOm points out, this latest batch of grants will mean only 3% of the broadband stimulus has been allocated, with less than a year to go until the process is scheduled to be completed.

More Mapping Grants

By Bruce

Yesterday, the National Telecommunications and Information Administration announced a handful of new recipients for state broadband mapping grants. The states chosen were Alaska, Colorado, Delaware, Kansas, Louisiana, and Missouri.

IIA in the News: An Interview with David Sutphen

By Brad

Multichannel News sat down with IIA Co-Chairman David Sutphen to talk about broadband adoption among America’s minority communities and the role of private investment in expanding broadband, among other things. Check it out.

Ongoing Delays

By Bruce

The flood of applications for federal broadband grants continues to be a problem for the National Telecommunications and Information Administration, which has announced that the next round of grants now won’t be issued until December, and the actual funding of grants won’t start until next February.

Delay Damage

By Brad

In the wake of the NTIA’s announcement that the first round of broadband grants would be delayed until December, many rural WiMAX providers are finding themselves in a tough stpot. From Wireless Week:

According to Luisa Handem, managing director of the Rural Mobile Broadband Alliance (RuMBA USA), the delay is affecting several RuMBA-affiliated companies and will both delay and jeopardize some wireless broadband programs initiated by the group’s members.

“Money needs to be on the ground and in the hands of those deploying broadband as soon as possible,” Handem said. “This is not welcome news.”

Assessing the Stimulus

By Brad

At App-Rising, Goeff Daily assesses the broadband stimulus effort to date and doesn’t like what he sees:

The original purpose of the stimulus was to get money flowing quickly to create jobs. We’re now more than eight months in and no money’s gone out. So the stimulus has failed to get money flowing quickly.

The stimulus has also failed when it comes to creating jobs. Not only has no money gone out to help create these jobs, but it seems like no one’s even seriously talking about the broadband stimulus in terms of creating jobs any more.

Instead, most of the discussions center around fixing America’s broadband shortcomings, but on that front the stimulus has failed too as people are waking up to the fact that $7 billion isn’t near enough to solve all our broadband problems.

So that’s the big picture of how the stimulus as a whole is failing: it’s not working quickly enough, it’s not creating jobs, and it’s not up to the task of fixing all our broadband woes. But it’s important to note that the process itself also seems to have failed.

Daily believes the national broadband effort can still succeed, but unless things start picking up—always a challenge when it comes to government—success will be harder and harder to achieve.

Here Come the Broadband Grants

By Brad

The National Telecommunications and Information Administration has announced the first four recipients in the initial round of stimulus grants. From an official press release:

• The California Public Utilities Commission (CPUC) is awarded approximately $1.8 million; the Indiana Office of Technology (IOT) is awarded approximately $1.3 million; the Rural Economic Development Center, Inc. (e-NC Authority) is awarded approximately $1.6 million; and the Vermont Center for Geographic Information (VCGI) is awarded approximately $1.2 million to collect and verify the availability, speed, and location of broadband across the states of California, Indiana, North Carolina, and Vermont, respectively. This activity is to be conducted on a semi-annual basis between 2009 and 2011, with initial data coming available in November 2009 to inform broadband policy efforts. Awardees are to present the data in a clear and accessible format to the public, government, and the research community.

• The CPUC is also awarded $500,000 for the cost of broadband planning activities in California over four years, bringing its grant award total to approximately $2.3 million. In addition, the e-NC Authority is awarded approximately $435,000 for the cost of broadband planning activities in North Carolina over five years, bringing its grant award total to over $2 million.

“The four award recipients submitted well-formed proposals that are both fiscally prudent and serve as a model for others,” Strickling added. “We are committed to making the program succeed nationwide and will continue to provide guidance to applicants where necessary to help them improve their proposed projects.”

The agency will continue to roll out grants throughout the fall.

Rule Changes

By Brad

According to Broadband Census, NTIA officials are considering changing the rules of the broadband stimulus program. Specifically, eliminating the third round of comments in order to give applicants more time once the Notice of Funds Availability is released.

If You Build it, They Might Not Come

By Brad

When it comes to a national broadband plan, spurring demand is just as important as providing access.

That was one of the messages delivered to the FCC during yesterday’s broadband workshop, reports Broadcasting & Cable.

Numbers of the Day

By Bruce

With the (twice extended) deadline for the initial round of federal broadband grants having come and gone, the National Telecommunications and Information Administration has released some numbers. From the NTIA release:

• More than 260 applications were filed solely with NTIA’s Broadband Technology Opportunities Program (BTOP), requesting over $5.4 billion in grants to fund broadband infrastructure projects in unserved and underserved areas.

• More than 400 applications were filed solely with RUS’s Broadband Initiatives Program (BIP), requesting nearly $5 billion in grants and loans for broadband infrastructure projects in rural areas.

• More than 830 applications were filed with both NTIA’s BTOP and RUS’s BIP, requesting nearly $12.8 billion in infrastructure funding. (Applicants for infrastructure projects in rural areas must apply to BIP but were given the opportunity to jointly apply to BTOP in case RUS declines to fund their application.)

• More than 320 applications were filed with NTIA requesting nearly $2.5 billion in grants from BTOP for projects that promote sustainable demand for broadband services, including projects to provide broadband education, awareness, training, access, equipment or support, particularly among vulnerable population groups where broadband technology has traditionally been underutilized. (The Recovery Act directs NTIA to make at least $250 million available for programs that encourage sustainable adoption of broadband services, of which up to $150 million is allocated in this first round of grants.)

• More than 360 applications were filed with NTIA requesting more than $1.9 billion in grants from BTOP for public computer center projects, which will expand access to broadband service and enhance broadband capacity at public libraries, community colleges, and other institutions that provide the benefits of broadband to the general public or specific vulnerable populations. (The Recovery Act directs NTIA to make at least $200 million available for expanding public computer center capacity, of which up to $50 million is allocated in this first round of grants.)

All told, over 2,000 applications for grants were submitted. As for what companies and groups applied, the site Unstrung has started compiling a handy list.

Sitting Out in San Francisco

By Bruce

Ever since the federal broadband grant rules were released, a controversy has brewed over the definitions of “unserved” and “underserved” communities, with officials in a number of urban areas worrying that the definitions, as currently worded, would leave their communities out in the cold.

Now, Business Week reports, the city of San Francisco—which despite being known as a technology hotbed still has areas in need of broadband access—is sitting out the initial round of grants:

To qualify for funding, applicants need to prove they’re catering to an “underserved” area. Yet the National Telecommunications & Information Administration (NTIA), which is overseeing the program, defines underserved as one where at least half of all households lack broadband, or where fewer than 40% of households subscribe to broadband, or a place where no service provider advertises broadband speeds of at least 3 megabits per second. In a densely populated city like San Francisco, where telecom providers like AT&T (T) and Comcast (CMCSA) widely advertise residential broadband all over the city, it’s hard to point to a place that technically meets the “underserved” definition.

Business Week contacted a spokeswoman for FCC Chairman Julius Genachowski and was told that the commission won’t comment on the broadband grants process. The NTIA was a bit more forthcoming:

Mark Seifert, senior adviser to NTIA director Strickling, says potential applicants should nevertheless file an application and make the best case possible. He says a good way to make the case is for applicants to take surveys among the local population to see what kind of service is available. But the priority, he says, is for bringing broadband to places where it’s either not available at all or only marginally available. “We know that this program alone will not achieve the President’s goal of broadband for everyone,” Seifert says. “We have limited dollars to invest, and we have a directive from Congress and the public record telling us to invest it in areas that are unserved or underserved.”

More on the Grant Application Extension

By Brad

Even with the big carriers reportedly skipping the first round of stimulus grants, the flood of online applications for grants is still hammering NTIA’s and RUS’s servers.

Yesterday the deadline for online applications was extended by a week, and as IIA Broadband Ambassador Craig Settles, President of Successful.com, tells Telephony, the extension was a very necessary step:

“It’s been running slow all week,” Settles said in an interview. “People have been going to [the online application process] and having problems. There has also been an issue because everyone is super paranoid. It’s been clear from the beginning if there is a technical error, if you omit some data or it is not formatted correctly, your application will be rejected.”

As a result, Settles said, many of the applicants are actually submitting multiple applications to cover different parts of their broadband projects rather than putting all their eggs in one application basket and then seeing that application rejected on a technicality.

While the extension is a smart move, the question remains whether one week will be long enough.

More Carriers Bowing Out

By Brad

Yesterday, news broke that Qwest—the nation’s third-largest provider—would not be applying for the first rounds of federal stimulus grants. Now, the Washington Post reports, major providers like Verizon, AT&T, and Comcast are planning on sitting out as well.

The Commerce and Agriculture departments say that the national broadband plan can still succeed without the big players, but some analysts aren’t so sure. From the Post:

“If you want to get broadband out, you have to do it with [those] who brought you to the dance in the first place, and in this case it is the incumbent cable and telephone carriers who have 85 percent of lines in the country,” said Robert Atkinson, president of the Information Technology and Innovation Foundation, a Washington tech policy think tank. “This is not basket weaving. This is really complex and intensive technical stuff that takes a fair amount of sophistication and scale to be able to do right and to continue to upgrade.”

Taking a Pass

By Bruce

Qwest Communications has announced it will not be applying for the first round of federal stimulus grants. Reports Denver Business Journal:

Denver-based Qwest (NYSE: Q), the nation’s third-largest local phone company, sat out the first round and appears to have joined the ranks of telecoms that would like to see the rules changed for future rounds of the broadband stimulus program.

“We continue to support the use of program proceeds to facilitate the deployment of broadband services to unserved consumers,” said Steve Davis, Qwest’s senior VP for public policy, in a written statement. “However, upon evaluation of the funding opportunity and the various requirements for participation, we were unable to make the business case for filing an application for more rural opportunities.”

Pushing Deadlines

By Brad

Tomorrow was the deadline for sending proposals to the NTIA for the initial round of federal stimulus grants. But due to the sheer number of proposals—and the overwhelming strain they’re causing on NTIA/RUS servers—the deadline is being extended to Thursday, August 20 at 5 pm Eastern.

A Drop in the Broadband Bucket

By Bruce

Business Week has crunched some numbers in an attempt to find out just how much it would really cost to bring broadband to every American. By their estimates, the initial $7.2 billion allocated in the federal stimulus, while certainly a large figure, won’t nearly by enough:

Many estimates say that about 40 million U.S. households may be unserved or underserved by broadband networks and that providing those homes with broadband connections will cost about $1,500 per household. That comes to $60 billion at minimum, since this math excludes the money consumers will need to spend to acquire PCs and other computer gear.

The $60 billion estimate also excludes the cost of bringing users who are in areas served by slow broadband connections up to the emerging national standard. Our best estimate of the minimum capital requirement is about $120 billion. This assumes substantial provision of wireless Internet service to rural homes and elsewhere, which is contingent on making available more radio spectrum.

Technology and geography are major contributors to the expense. While the hurtles aren’t insurmountable, it’s going to take major investment from both government and private industry to make a true national broadband plan a reality.

Workshopping Broadband

By Bruce

As part of building a national broadband plan, the FCC has planned workshops to gather ideas and educate the public. Reports PC World:

The workshops will be open to the public and will be webcast online, the FCC said. Key stakeholders attending the workshops will include broadband service providers, equipment providers, applications providers and community groups, the FCC said.

Among the topics the FCC will explore in the workshops: e-government, opportunities for disadvantaged businesses, deployment challenges, broadband for health care, and communities that have low broadband adoption rates.

The full list of broadband workshop topics is available on the FCC’s broadband page.