F2C: How to Get Broadband Stimulus Cash

In order to obtain some of the money in the $7.2 billion broadband stimulus,
organizations will need to prove that they are competent and can deliver a public good, said experts at the recent Freedom to Connect conference.

Jim Baller of the Baller Herbst Law Group noted that his law firm has posted basic information about the stimulus, including the details of what money is directly allocated to broadband and what additional funds might be used in broadband projects such as funds for transportation, smart grids (applying information technology to energy in order to reduce waste), health care technology, school construction, public safety, public housing and energy efficient housing retrofits.

Tom Cohen of fiber lobby Fiber to the Home Council and the law firm Kelly
Drye & Warren LLP noted that the government’s National Telecommunications and Information Administration (NTIA) has $4.7 billion but not all of it goes directly to broadband: the Broadband Technology Opportunities Program (BTOP) allocates $250 million to “innovative programs that encourage sustainable adoption of broadband services”, $200 million for public computing upgrades (such as public libraries) and $350 million for broadband mapping.

He added that the goal of the program is more than just broadband
deployment: the NTIA is being asked to deliver broadband specifically to unserved and underserved areas — terms that are not yet defined. Although it’s easy to agree on what “unserved” means, there will be disagreement about the definition of “underserved.”

The program is also meant to ensure “that strategic institutions that are likely to create jobs or provide significant public benefits have broadband connections.”

As a fiber lobbyist, Cohen was eager to point out that building fiber networks creates construction jobs.

He added that it was interesting that the Rural Utilities Service, which oversees
$2.5 billion, has been asked to serve areas that are at least 75 percent rural, a departure from past practice that required that RUS funds serve only areas that were 100 percent rural.

The applications

Applicants must prove that they serve the public interest, noted Harold Feld, legal director of consumer lobby Public Knowledge.

State and local governments are already preparing applications. Bill Schrier, CTO of Seattle, said that the city is working on a multifaceted application that combines a smart grid fiber backbone for the municipal electric utility with a demonstration fiber to the home project. The city is considering working with a rural area to build fiber near a dam.

Sharon Gillett, commissioner of the Massachusetts Department of Television and Cable, said that the state of Massachusetts will apply for cash but declined to describe the application in detail.

Applications must be clear as the NTIA has to act fast without sufficient resources. “The NTIA is a well-intentioned agency with no staff,” joked Gillett.

Experts agreed that the more goals a project can serve, the more likely that project is to receive cash. Feld said that partnerships will be important as the goal of the program is not just a network build out, but also programs that improve outreach and increase the rate of broadband uptake.

“Applications should be like business plans,” said Cohen. He noted that the funds can cover up to 80 percent of the cost of the build out, the capital expenditure, but that the government will not provide funds for running the network, the operational expenditure. Thus, every plan must show how it will obtain and spend money other than the government’s.

Joanne Hovis of CTC Communications and the National Association of Telecommunications Officers and Advisors (NATOA) carefully clarified a statement that the funds would not go to startups by pointing out that projects will need qualified leaders. “Even if your project is a startup, your leaders will have a track record,” she said. “It will be hard to fund something out of thin air.”

Cohen said that because the money must be disbursed by September of 2010, regulators will need to spend it on expensive projects in order to spend it all. “The agencies cannot give out a lot of little grants,” he said. “The money has to go out in chunks.”