First dribble of broadband stimulus funding announced 17 December 2009
Posted by Steve Blum in Tellus Venture Associates.Tags: ARRA, BIP, broadband stimulus, BTOP, NTIA, rural broadband, RUS
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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.
Handicapping the BTOP Derby and the BIP Stakes 12 July 2009
Posted by Steve Blum in Tellus Venture Associates.Tags: ARRA, BIP, broadband stimulus, BTOP, california emerging technology fund, california public utilities commission, cetf, CPUC, NTIA, RUS
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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!
Maybe they meant stimulating conversation? 13 March 2009
Posted by Steve Blum in Tellus Venture Associates.Tags: AT&T, broadband stimulus, california emerging technology fund, cetf, fcc, NTIA, RUS, verizon
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Following a couple weeks of meetings and conference calls with industry, government and community people, and doing some reading, the broadband portion of the stimulus package isn’t looking so stimulating…
- The real fight is on now. Lobbying groups are fully engaged as the NTIA determines the scoring criteria it will use. The process will continue over the next two to three weeks. There are more hearings scheduled for Washington, plus two others next week, one in Las Vegas and one in Flagstaff. Expect wonks from all sides to parachute in, trying to tweak details and definitions to their advantage. Same story for the RUS money.
- The deck seems stacked against urban community broadband projects. The focus at this point is on two criteria, 1. job creation and 2. reaching unserved and underserved areas. In that order. Big city interests want to equate “underserved” with “unaffordable”, but even if they are successful, they’re pitching jobs tomorrow against jobs today.
- There are three kinds of jobs that could be created via broadband process: one-time system construction, ongoing system operations, and second order effects where the availability/affordability of broadband creates and/or preserves jobs down the road.
- The consensus within the industry is that priority will go toward construction jobs, because those will get money into peoples hands and then into the economy most quickly. I wrote about this subject earlier.
- At the state level, the expectation is that substantially all of the NTIA money will go through the states. That’s probably not realistic. The broadband portion of the stimulus bill, unlike nearly all of the rest of the bill, does not require the money to flow through the states.
- Community and municipal people think that taking the state out of the funding stream means the NTIA will direct more money directly to community projects. That possibility becomes likelier if the current lobbying efforts directed at NTIA’s scoring criteria are successful. But the prevailing industry view is that the reason the NTIA money doesn’t necessarily flow through states is because the big incumbent carriers, like AT&T and Verizon, won the day in Congress and will be at the head of the line.
- The prevailing industry view also assumes that some money will go to community projects, if only for appearances sake. If so, cities could be in line for a bit of funding if a concrete job creation case can be made.
- The California Emerging Technology Fund has identified a substantial amount of money – more than $60 billion – that the stimulus bill directs towards broadband-related technology projects, with health-related IT projects at the top of the list. Most of that money ($55 billion? More?) will flow through the states, and CETF and the California governor’s office are well positioned to claim a nice chunk. The $7.2 billion of NTIA and RUS money could slipt away from them, though.
- Everyone agrees that the process is moving quickly, that the fact that several key positions in the new administration are unfilled makes the process very difficult, and that presenting a unified message, if not speaking with one voice, is the key to being heard before the scoring criteria are set. The game could be all but over by the end of March or the beginning of April.
- The FCC is in the act as well. It’s planning to come up with a national broadband strategy by the end of May. I think it’s a mistake to think that it will have much influence on NTIA and RUS grant decisions. The grants, and the process of making the grants, will create jobs, or so the Obama administration thinks. The FCC process will create or save jobs — mostly for lobbyists, lawyers and other Beltway bandits, but a job is a job, I guess. It’s about jobs, not grand broadband policy or even coherent management.
The mantra so far is “fast, fast, fast”. Fair enough. But everyone will want a say, then everyone will want a say regarding what everyone else said. It would be nice if the serious money actually started to flow by this Summer, or even by Fall. It would be nice. But I’m not counting on it.
When they say shovel ready, they mean real shovels 3 March 2009
Posted by Steve Blum in Tellus Venture Associates.Tags: 12seconds.tv, AT&T, Blue Field Strategies, floor64, kerton group, NTIA, rini coran, RUS, silicon valley telecommunications council, silver springs networks, techdirt, tia
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Notes from the Silicon Valley Telecom Council’s Policy Luncheon
The prevailing view amongst the private sector people who have been talking to contacts with the Obama team is that the lion’s share of the broadband stimulus money will go to incumbent carriers. “Jobs are created through the existing structures,” was how Mike Masnick put it, quoting a highly placed source in the administration.
Yesterday’s Silicon Valley Telecom Council policy luncheon in Santa Clara was sponsored by AT&T, but big carriers by no means dominated the panel. Speakers represented a wide variety of sectors and areas of expertise, from both inside and outside the Beltway:
- Jon Metzler, Blue Field Strategies
- Christopher Boyer, AT&T, AVP – Internet & Technology Policy
- Danielle Coffey, Vice President, Government Affairs for the Telecommunications Industry Association (TIA)
- Derek Kerton, The Kerton Group & SVTC
- Mike Masnick, founder Techdirt; CEO, floor64
- Robert Rini, Partner, Rini Coran PC
- David Pejcha, Marketing Director, Silver Spring Networks
It pretty much looked like this on 12seconds.tv
With $7.2 billion specifically earmarked for broadband projects, the stimulus package is the largest U.S. government disbursement for telecom purposes ever. That’s the good news. The bad news is that the panelists were 100% in agreement: the priority is job creation, not broadband build out, and incumbent carriers can create — or protect — more jobs more quickly than start up companies or community-based projects.
The audacious hope is that once the dust settles from the stimulus extravaganza, a genuine broadband and telecommunications policy, with money attached, will make its way through the administration and congress. That program, should it ever come to pass, would address how to upgrade the U.S. national broadband infrastructure and extend it to unserved areas. The stimulus package, though, is about something else.
There’s a lot of detail that is still uncertain, not least who will be running the National Telecommunications and Information Administration and the Rural Utilities Service, the two agencies that will be ladling out the grants. But the consensus yesterday was clear: whoever is appointed will be answering directly to John Maynard Keynes.
It’s not doing the great man justice to focus on a couple of his quips, but he put the awful truth very succinctly. If you hire hire a bunch of people to dig a ditch, you’ve stimulated the economy. If you hire more people to fill it back in, you’ve doubled the stimulus. It doesn’t matter that nothing of value was created in the process. What is most important is that people are receiving pay packets and spending the money.
The bottom line is that the Obama administration would rather fund a project that puts a thousand people to work installing ten miles of fiber, than pay ten people to lay a thousand miles.
Of course, a thousand miles of fiber will support many thousands of jobs in the long run. But, according to yesterday’s private sector expert view, the administration will be thinking about the here and now when it hands out the cash. The first, and maybe only, question for applicants will be “how many people will you hire today with this money?”
Short term thinking perhaps, but as Professor Keynes put it, “this long run is a misleading guide to current affairs. In the long run, we are all dead.”
