Experts also feel that if communities, specially the smaller ones, can find a way to roll their broadband out on their own, it may be make more sense not to go for funding at all.
"Winning the grant will come with all its baggage. So if a community can't find a way out without the grant, it may well go ahead and apply. Others could give it a second thought," said Craig Settles, the founder of broadband consultancy firm Successful.com.
Settles is not alone. Gigi Sohn, president of Public Knowledge, a Washington, D.C.-based public-interest advocacy group who has been advising potential bidders also feels that the guidelines do little to help "the little guys." In a comment to a local publication, she said there is an awful lot of concern among institutional providers like libraries and schools, as well as small municipal Wi-Fi providers and smaller network providers, as to whether the stimulus package could really stimulate broadband rollout in the unwired regions of America.
The deadline for the first round of the broadband stimulus program that contains $4 billion of cash giveaway to help bring broadband service to underserved and unserved areas of America is August 14. The disbursal of funds is handled by NTIA and RUS. This is part of the $7.2 billion broadband stimulus program carved out of federal bailout package, the American Recovery and Reinvestment Act. The rest of the grants would be given away in later rounds, one at the end of this year and the other sometime in September 2010.
Although this stimulus program may be America's first big-bang effort to give its citizens the opportunity to decide their own broadband future, Settles, who for 20 years specialized in using broadband to improve government efficiency and boosting economic development in communities, has many criticisms. His biggest complaint is that he feels NOFA is unfair and biased toward incumbent telecom companies by giving existing service providers 30 days to protest any proposal that wants to cover an un- or underserved area that an existing provider or incumbent telecom company feels it has already covered.
"This backdoor clause that allows incumbents to challenge proposals by claiming to cover areas that the applicants determine to be unserved, leaves applicants vulnerable to a challenge," Settles said.
According to him, a big problem that could arise out of this clause is that in the absence of a published challenge procedure, applicants won't know if they have the opportunity to defend their proposals if they are challenged.
Other Hurdles
There are other hurdles as well. NOFA, for instance, favors incumbents with "ridiculously low" minimum speeds that define broadband -- 768 kbps download, 200 kbps upload -- and ties this to the definitions of un- and underserved."At these minimum speeds, a project that brings faster speeds to areas where incumbents already have dial-up or DSL may not get funding at all," Settles said. "So incumbents win without even having to lift a finger to deliver
the kind of speeds you need for worthwhile broadband applications."
That aside, what may make challenging a proposal even easier for incumbents is the stipulation that an area is not underserved if the incumbent advertises speeds of at least 3 mbps downstream.
Consider this: To kill a proposal, all any incumbent has to do is run a quick advertisement campaign, and then evoke the backdoor clause to challenge proposals, Settles said. "And while it's true that you get bonus points for proposing a network with 10 mbps, the value is negated if the area you want to cover is challenged by the incumbent," he said.
Besides, many find the application process to be onerous. In a recent get-together of prospective, relatively smaller community applicants in Mount Carroll, Ill., the main complaint was the difficulty in gathering the data required for backing the application.
For instance, one burden that communities face when trying to find or create effective maps of where broadband coverage already exists is the incumbents' use of nondisclosure agreements (NDAs) to prevent disclosure of key data, such as exactly which houses and business get access. Or what type of broadband technology is in which specific parts of an incumbent's service areas.
"On one hand, the NOFA requires data down to the census block," said Settles, "but then bows to incumbents' use of NDAs to prevent access to their data. While some business information, such as details on patented technology, should be kept private, I believe basic information that reveals real coverage in an area should not be restricted."
Additional Burdens
Two other conditions are the ones that grant the RUS a first lien on all of the assets associated with a project, which the RUS can share with other banks, for one. And also the requirement that a successful applicant cannot sell the network or the rollout, for 10 years, even in parts.According to Settles, the results of the first phase of the funding is critical, because that will not only provide indications of the stance its managers - the NTIA and RUS - will take regarding rest of the program in the future. The results will also provide some valuable leads as to who should apply for the other two waves of funding.
"What needs to be seen is that if the incumbents are applying at all, or, if they're going to be content to torpedo any proposals they can, directly or in subtle ways," Settles said.
Some hope that the experience of this round may allow NTIA to smooth out the rough edges of NOFA, making it easier for smaller communities to apply in the next grant periods.
Still, suggested Settles, those communities that started planning broadband networks well before the stimulus program or even NOFA was conceived (like OpenCape in Cape Cod, Mass.), should take the plunge with the basic information they've gathered already.
The other category of projects that have strong backing from the states - like the California Public Utilities Commission that has thrown resources and workshops into helping local applicants create better proposals - should also do well, Settles said.
Photo by Jem Stone. CC Attribution 2.0 Generic
