Building community broadband: three things that work without stimulus grants 15 May 2010
Posted by Steve Blum in Tellus Venture Associates.Tags: ARRA, BIP, broadband stimulus, BTOP, california emerging technology fund, casf, ccbc, cetf, CPUC, CSU Chico, CSU Humbolt, rural broadband, SEDCorp, sierra economic development corporation
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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 provides prospective investors
with broadband planning toolsBrent 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 14 May 2010
Posted by Steve Blum in Tellus Venture Associates.Tags: ARRA, BIP, broadband stimulus, BTOP, california emerging technology fund, california public utilities commission, casf, ccbc, cetf, Jonathan Adelstein, NTIA, rural broadband, RUS
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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.
Adelstein and RUS general
field representative Harry Hutson showed
CETF conference attendees in Redding
how the first round BIP money went
down the spoutRUS 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 13 May 2010
Posted by Steve Blum in Tellus Venture Associates.add a comment
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:
- 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.
- 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.
- Providing broadband connectivity to targeted community anchor institutions can be financially and technically feasible for cities, and is supported by public opinion.
- Providing universal, consumer-grade wireless Interet access is not financially or technically feasible for cities, and is not supported by public opinion.
- Cities can better promote digital inclusion by enabling and supporting a competitive broadband environment.
- Widespread public awareness and support precedes deployment of a successful municipal broadband system.
- 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.
- Fiber optic and other landline technologies provide orders of magnitude more bandwidth and many more years of useful service life, with lower operating costs.
- 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.
- 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
Study presentation to Oakland City Council
