OSP's Broadband Stimulus Update #5: September 2, 2009

RUS and NTIA published their long-awaited Notice of Funds Availability (NOFA) on July 1, 2009, with a deadline for application submissions of Aug. 14, 2009. Due to server problems, the deadline for electronic submission of applications was extended to Aug. 20, 2009. Now, the agencies have issued a press release on their special Web site with some preliminary information about the status of the demand from this first round, which is offering approximately $4 billion in funds – about $2.4 billion from RUS and $1.6 billion from NTIA.

Not a lot of detail is provided yet, but here are the facts as published:  almost 2,200 total applications were received from all 50 U.S. states, territories and the District of Columbia from a “diverse range of parties,” including state, local, and tribal governments, non-profits, industry and “anchor institutions,” described as libraries, universities, community colleges, and hospitals. Public safety organizations and other entities in rural, suburban, and urban areas were among the applicants as well. The applications are requesting almost $28 billion in funding or about 7 times the offered amount of this first round. Applicants committed to approximately $10.5 billion in matching funds, so that the total amount of broadband projects proposed is more than $38 billion. The split between the 3 different elements of the Broadband Stimulus Plan and how it relates to the available funds is reported by the agencies as follows:

Infrastructure Projects – For OSP Magazine readers, I would assume this is the most important part of the overall program. More than 1,490 applicants requested a total of more than $23 billion from either NTIA’s BTOP program (260 applicants, $5.4 billion) or RUS’ BIP program (400 applicants, $5 billion) or from both (830 applicants, $12.8 billion). As a side note, applicants for projects in rural areas had to file first with RUS’ BIP program but had the option to file with NTIA’s BTOP program at the same time in case RUS declines their application.

Sustainable Broadband Adoption – More than 320 applicants requested a total of more than $2.5 billion from this NTIA / BTOP program. The ARRA directs NTIA to make at least $250 million available to this program of which $150 million were allocated to this first round.

Public Computer Centers – More than 360 applicants requested more than $1.9 billion in grants from this NTIA / BTOP program. Again, the ARRA had provided direction to NTIA to make at least $200 million available to this program of which $50 million were allocated to this first round.

Several entities have publicly announced information about their applications. According to the Telecompetitor, several states have applied for $100 million or more in funding: The state of Missouri is requesting $142 million for 2,500 miles of fiber cable and 200 new broadband towers; Massachusetts wants to build 1,591 miles of a Middle Mile network and requests $105 million; Maryland is asking for $100 million also for a Middle Mile network build-out; Pennsylvania requested $100 million for a project including an east-west corridor between I-80 and Pennsylvania’s northern border to connect 988,000 households in 32 counties, 202,000 businesses, 1,222 public safety agencies, 1,180 educational entities, and 255 health care facilities.

Notably absent from the reported applicants so far are several Tier 1 and 2 service providers. According to analyst Michael Genovese of Elevate Research CenturyTel, Consolidated Communications, Frontier Communications, and Windstream Communications did not apply, although some of them “were on the fence.” The big telcos, Verizon, AT&T, and Qwest were not expected to apply and did not. The post-award requirements “with network neutrality verbiage … and the government keeping watch over a project” were stated as the main reasons. The only Tier 2 service provider listed as an applicant so far is TDS Telecom.

Lightreadings’ Unstrung reported a list of applicants with a variety of broadband technology and network types:  360networks (fiber optic network), Champion (WiFi), Clearwire (WiMax), Cricket Communications (wireless), DigitalBridge (WiMax), ERF Wireless (WiMax), IBEC (Broadband over Powerlines), Internet America Inc (fixed wireless), On Corp. (WiMax), Level 3 Communications (network upgrades), OpenCape (fiber optic network), SkyTerra Comms (wireless public safety), TDS Telecom (wireline network), WildBlue Communications (satellite broadband), and Xfone (wireline). Of particular interest was that WiMax operator TowerStream Corp. has applied for up to $120 million in broadband stimulus funds from NTIA’s BTOP program. They intend to provide wireless broadband to underserved businesses in 9 existing markets and 8 new cities in the U.S. "for areas in and around major cities that don’t have adequate Internet access." It will be interesting to review the agencies response to claiming that the new cities such as Atlanta, Denver, Detroit, Houston, Minneapolis, Philadelphia, Phoenix, and San Diego as well as the cities in existing markets Boston, Chicago, Dallas, Los Angeles, Miami, New York, San Francisco, and Seattle are considered “underserved.”

In the coming weeks, we expect more clarification about the applications with respect to applicants, technologies, targeted regions, and amounts requested, and plan to publish this information as it becomes available. The agencies stated that they intend to publish a database with summaries of all applications received in the coming weeks. It is also expected that the second NOFA will be published before the end of the year.

For any questions, please contact me at econstimulusinfo@corning.com

Notes:
• BIP  Broadband Initiatives Program of the RUS
• BTOP  Broadband Technology Opportunities Program of the NTIA

Sources:
• RUS and NTIA NOFA  http://www.broadbandusa.gov
• NTIA Press Release  http://www.ntia.doc.gov/press/2009/BTOP_BIP_090827.html
• NTIA BTOP  http://www.ntia.doc.gov/broadbandgrants
• RUS  http://www.rurdev.usda.gov
• FCC  http://www.fcc.gov/recovery/broadband
• Lightreading  http://www.lightreading.com/document.asp?doc_id=180976&
• Telecompetitor  http://www.telecompetitor.com/pennsylvania-joins-100-million-broadband-s...
• Unstrung  http://www.unstrung.com/document.asp?doc_id=180908&

Legal Disclaimer: This material is intended to provide general information about that portion of the American Recovery and Reinvestment Act of 2009 (the “Act”) related to broadband deployments in the United States. These materials are based on information from multiple sources (e.g., USDA and USDC presentations, webinars by industry associations, the Act). Many factors, including the final provisions of the Act, any accompanying regulations and other government programs may change, delay or terminate public funds for broadband deployment. Corning Cable Systems makes no promises about, and does not assume any liability for, the accuracy or completeness of the information provided in this presentation. Corning Cable Systems does not assume any obligation to update this presentation or you about changes to the Act.