What Broadband Stimulus Money?Sunday, March 22, 2009
While I was at the IWCE Land Mobile Radio Conference last week, I took time out to attend what was billed as a public roundtable for the Broadband Initiative. It was sponsored by USDA Rural Development, the National Telecommunications and Information Administration (NTIA), and the Federal Communications Commission (FCC) and it was run by both the federal and state of Nevada governments. The $7.2 billion allocated for broadband stimulus has received a lot of attention in the telecom world as well as at state and local government levels and I expected this would be a forum where people could talk about what they thought needed to happen.
It turned out that the audience, including myself, was mostly consultants, either representing some group that had the best idea of how to spend the money or who were looking for work. The panelists were also all about wanting a piece of the stimulus money. There was a lot of self-serving dialogue going on and it became apparent very early on that this audience and the entire event was focused on getting fiber to homes and towns in rural America and tribal lands. In fact, there were several consultants on one of the panels who were pushing for a lot of funding specifically for tribal lands-but these consultants did not seem to think it was important to also provide broadband for surrounding rural communities as long as tribal lands were covered because that was their mission.
The format was that a panel would address a specific topic (including one on what, exactly, is meant by rural broadband, go figure), then have Q and A session with the panelists, followed by an open mike session to hear audience input. There was no time allotment for others to present their plans or ask questions, and audience participation was structured so as to limit any meaningful dialogue. It was all about people with their hands out.
I lost most of my interest in the proceedings when the moderator told the audience they needed to understand the reality of the money available. There are, he said, fifty states, five U.S. territories, and tribal lands. His math says that this means each state will have about $150 million to spend on broadband for all Americans.
If these funds are allocated this way, we will spend $7.2 billion and be no closer to solving the problem of connecting all who live and work in America than we are now. It appears that each expenditure will be handled as a grant-an application is submitted, it is weighed against others, and then some money is awarded. But the message is not to expect too much. Those who pay expensive consultants who know how to write requests for government grants will get more of this money than those who try to do it themselves, which means a lot of the money will go toward administration costs and not to solving the issue of the lack of broadband access that we are supposed to be addressing. I sure hope the entire stimulus package is not administered in this way. If it is, nothing will be accomplished except for digging us, the taxpayers, further into debt.
There are many more logical ways to approach the broadband issue and to solve many of the connectivity problems. To most at the meeting, it was about fiber, fiber, and more fiber-a few talked about the last mile, but not many. The Nevada folks, for example, were touting the fact that they have a lot of dark fiber running along their interstate corridors that could be used to extend broadband to rural areas. The problem with this is that the fiber is owned by private companies, not the government of Nevada, so someone will have to pay to light it up. Then there is the question of how to get broadband from the fiber to the rural communities where it is needed. It seems the general consensus is that we have to go from zero to 50 Mbps to have accomplished the goal of making broadband available to all Americans. Taking smaller steps and putting DSL-like speeds into the hands of those who now use dial-up or nothing hasn't even been considered with such a large amount of funding available-though when you break it down, it's not that much after all.
In my opinion, the bottom line is that if this money is used for grants and there is no oversight or anyone looking at the bigger picture, most of it will be wasted money and the results will be less than we should expect. What is needed is a strong leadership team to manage the process starting with several pilot projects based on extending what is already in place and what will have the most impact for the least amount of money. The idea of 50-Mbps broadband for all Americans should be tempered so that phase one would be to put DSL speeds into the hands of those who do not currently have any broadband, and then work on upgrading data speeds over time using other resources.
Everyone at the meeting was out for what they can get. Most sincerely think their solution is the best, but almost all of them want to apply a single solution to every area of the country instead of inventorying what is already available and working to extend those capabilities beyond their current reach.
I believe that the solution is to put together a management team and conduct some serious resource analyses on what is already out there and could be used and expanded upon. The answers will be different for each area and some areas will require a hefty investment. However, many more areas will require an investment of less than $50K. We can accomplish a lot with this money IF instead of handing it out to those with the best written proposals it is spent by a management team on specific and identifiable projects with local partners.
We can get more bang for the buck if we simply take a step back and look at various ways to accomplish the goal. Everyone has his or her own ideas, but most people have some skin in the game here. I don't. Yes, I have a client with access to rural assets, but I am not in a position to profit from any possible funding. I have to admit that I came away from this meeting with the gut feeling that we are about to spend all $7.2 billion and not see any long-term tangible results because so much of it will be eaten up by administrative fees while the rest will be plowed into projects that will benefit only specific segments of the market or for projects that will never be completed.
Like so many others, I have my own ideas about what should be done with this money. But unlike most, I believe we can spend these funds in a better way than throwing them at some grants. This would be a good time to look at other initiatives and explore combining forces with others who are looking for communications access in the same areas. One perfect example is the public safety providers who are trying to build an interoperable broadband wireless network nationwide-including rural America. As it stands now, this network is in question of ever being built and if it is, it will take years for it to be extended to rural America. What if this project became part of the process? There is more than enough bandwidth to provide broadband access for first responders and much of rural America at the same time, using the same network.
There may be some funds for this network as DHS is already awarding grants for public safety systems, and adding these funds to the broadband stimulus funds could help add capabilities to what we build out now and well into the future. Most importantly, the public safety community in rural America would have this much needed network years ahead of current expectations. I have other ideas as well. Some have been refined after conversations with other people and groups, but the basic premise is to get the most bang for our bucks by using what is already in place.
Earlier this year I wrote a white paper outlining my ideas for the implementation of broadband for more Americans, and I concentrated on the economics, not the technologies. More recently, I turned the content of this report into a PowerPoint presentation which will you find attached to this website version of this Commentary as a pdf file. My basic premise in rural America is simple and straightforward:
1) Today, 90% of the U.S. population has access to at least one wireless broadband network, and 96% of the population has access to wireless voice services. So step one is to extend the 90% data footprint into the 6% of voice-only coverage. This can be done quickly and easily and does not have to be fully mobile at the onset. It can start out with point-to-multipoint systems using existing 3G technology. The backhaul is the big expense here and if it is set up to support next-generation data speeds, the radio equipment is all that would be needed to be upgraded in the future. This would provide 96% of the U.S. population with access to DSL-like speeds.
2) Next, most schools have broadband capabilities. These capabilities are used during the day and lie fallow after school hours. A one-hundred foot tower could be installed along with a data radio at each of these schools-it doesn't matter whether the radios are WiMAX, CDMA EV-DO, UMT/HSPA, or LTE to start-and tie it into the school's broadband system. Now there would be broadband in a three, five, or even ten mile radius around the school that can be used 24/7 and it can be paid for with low-cost monthly subscriptions. This strategy could also be used on tribal lands and, as one tribe has already done, make broadband available to those who can afford to pay for it, and broadband and computers can be added to community centers for those who cannot afford it. The total cost for such coverage should not exceed $25K to $50K per school plus the cost of the subscriber equipment.
3) The National Rural Telecommunications Cooperative (NRTC) has 1,400 co-op members, many of which are rural power co-ops. Through partnerships, their right-of-ways could be used for backhaul and towers for broadband. Power companies would have control for managing their power distribution (for which they pay) or they would purchase the equipment and use it for these purposes, then resell the rest of the bandwidth to the communities they serve. Stimulus funds could be used for this in addition to funds for the public safety network and from DHS. The result would be a fourth-generation wireless network with data speeds in the 50-Mbps range, and it could be built out quickly using existing radio sites and power line towers.
All of these projects could be completed in less than three to five years, and I am willing to bet that all of this can be accomplished with the funds allocated for capex, with monthly operating costs supported by paying customers, at least in most of rural America.
If we proceed down the current planned course of action, there will be thousands of grant applications submitted, many of which won't be funded because there isn't enough money to spread around. Unfortunately, much of the money will not go to the most deserving projects but to the ones with the most creative proposal writers. When the money runs out, most of those who are not served or are underserved with broadband will remain so, especially when you consider that we are talking about only rural America. The money is also meant to be used for providing broadband for those who live in more urban areas but cannot afford broadband services today. Here again, I am willing to bet that some of the proposals will be for new networks designed to serve this group of urban citizens. Again, this would be a needless waste of money. Today, most of these areas are already served by six or more choices for broadband services and there are additional networks in the pipe that will increase this number to nine to twelve per area. There is no way a given urban area can support that many choices for broadband services. Since we already have plenty of networks in place, what is needed in urban America is to find a way to make broadband affordable to these people. This calls for an economic fix, not more technology.
I spend my own time and money on two causes that I believe in deeply. The first is the need for better first responder communications and interoperability, and the second is providing broadband access where there is none today. I had hoped that the broadband stimulus package would give a real boost to rural America broadband deployment. Now it appears I was naive. I should have realized that waving this much money around only leads to a frenzy of greedy people raising their hands asking for a handout. Many may really care about broadband, but they have a narrow focus on their own area of interest and are not willing to step back and look at the overall picture. I guess I will be spending more of my time and effort working with the first responders now. I have come to the conclusion that broadband for rural America is a lost cause under the current stimulus structure.
Andrew M. Seybold