Broadband Oversight Hearings Highlight Burdensome Grant Paperwork

House Small Business Chair Nydia Velazquez gave Commerce Department and Agriculture Department officials an earful Wednesday over the complexity of the 200 page long grant application for businesses seeking to extend broadband coverage into communities needing the most help. The grant process has fallen nearly a month behind schedule, and Velazquez complained that the application paperwork discouraged otherwise viable applicants from getting grants and loans to extend service to folks needing help the most. “More often than not, small businesses can’t afford in house lawyers, accountants, or support staff,” she pointed out in asking the bureaucrats to find a more streamlined grant process.

Small Business ranking member Sam Graves echoed her concerns. “As the first round of broadband funding concludes,” he remarked, “it is imperative that government make changes.”

Broadband Construction Stimulus Grant Program 288% Oversubscribed

Yesterday’s hearings at the Senate Commerce Committee regarding oversight of the stimulus package grants of $7.2 billion for construction of broadband networks in unserved and underserved areas of the nation revealed that 2,200 applications seeking a total of $28 billion in funding have been submitted against the appropriation. Commerce Committee Chairman Jay Rockefeller and Missouri Senator Claire McCaskill both complained about the fact that responsibility for awarding the funds is divided between the Commerce Department’s National Telecommunications and Information Administration and the Agriculture Department’s Rural Utilities Service. Have they forgotten that they are part of the Congress which set up the stimulus package that way?

Meanwhile, Comcast and a number of other internet and cable TV providers are complaining that a large number of the grant applications, supposedly intended to get internet service to citizens in areas of the nation where none is available, propose network construction in areas where the companies already provide service.

Universal Broadband Access Will Depend On Private Capital

FCC Chairman Julius Genachowski emphasized at an agency hearing Thursday that extension of internet service to all Americans will depend on investment of up to $350 billion in private capital when telemedicine and "smart grid" electrical power monitoring are factored into the expansion of internet useage. With internet non-profits like Free Press, which helped candidate Obama formulate tech policies, lobbying intently for new net neutrality rules at FCC, and with those proposed regulations adamantly opposed by the broadband purveyors who have the capital required to fund a $350 billion internet expansion program, a clash of titanic proportions is looming as the February, 2010, deadline for presentation to Congress of FCC plans for universal broadband access approaches. The major internet providers have already opted out of the government loan and grant programs in the stimulus package which were aimed at promoting network expansion into rural regions of the country.

Broadband Extension Costs Estimated Up To $350 Billion

How broad is broadband communication? That's the question the FCC must answer by February 17, 2010, the deadline for it to report on the cost of extending broadband service to every American household, enacted in the stimulus legislation. FCC Chairman Julius Genachowski announced to reporters yesterday that providing all underved households only the bandwidth required for e-mail and web surfing would likely cost $20 billion, while expanding service to include high definition movie transmission and video conferencing would cost as much as $350 billion.

Present statistics show that 4% of the population has no access to internet service, while 33% choose not to pay for the service, and 63% are already subscribers. Whether the FCC chooses the low end, the high end, or some middle ground in the range of its estimates, there will be a lot of cash in this program for construction businesses.

FCC Meddling In Broadband Construction Could Spell Disaster

FCC Chairman Julius Genachowski spoke recently at a conference on broadband coverage in our country, explaining how the agency expects to comply with the Congressional mandate in the stimulus legislation to report by next February how best to make internet service available to every American. Behind him was a huge monitor displaying real time Twitter "tweets" from the audience members responding to his remarks. One audience member wrote, unnoticed by Genachowski, that "It would have taken the government until 2025 to have created Twitter."

During a hearing before the House Energy and Commerce Committee last week ranking member Congressman Cliff Sterns asked whether deeper FCC involvement in internet expansion is really a good idea. FCC Commissioner Robert McDowell echoed those sentiments during a break in the hearing. "I think we should proceed with caution, McDowell said, "There's a potential for good, but there's also a potential for government micromanagement." Amen.

Broadband Construction Grants Oversubscribed, Ineffective

Applications for over $28 billion have been filed in the first wave of grants to build broadband networks in underserved and unserved regions of the country, as provided by stimulus grant and loan programs administered by the Departments of Commerce and Agriculture. The first wave has only $4 billion available, however, meaning there are seven times the requests as there is available cash. Congressmen and Senators are disappointed that very few of the major broadband network operating companies have applied for any of the money, put off by the onerous conditions imposed on users of the funds.

Congressman Rick Boucher, chairman of the Telecommunications and Internet Subcommittee of the House Energy and Commerce Committee, told his panel today that major changes in the grant and loan programs are required to make certain that broadband networks built using taxpayer cash are fast enough to be commercially useful, and built first in areas where no internet service is currently available. Boucher is especially concerned that the current definition of "underserved" excludes any locale within 50 miles of a city of more than 20,000 people. This definition, he contends, excludes isolated communities in almost all the rural east coast.

Unfortunately for the construction industry, tinkering with the program definitions will only delay availability of funding for these projects.

New Hampshire Uses Stimulus Funds To Explore Broadband Expansion

New Hampshire Governor John Lynch has signed a bill creating the office of "Director of Broadband Technology Planning and Development" funded by federal stimulus appropriations, to explore ways to bring high speed internet service to rural areas of the state as a replacement for the dial up internet access which is the sole connection available to most residents of those locales. Keep watching the Director's office for announcements of opportunities for construction work on such projects.

Broadband Construction Grant Guidelines Due For Release Tomorrow

Vice President Biden and newly sworn in FCC Chairman Julius Genachowski are scheduled to appear together tomorrow at a news conference in Erie, Pennsylvania, where the Obama administration is expected to announce the Notice of Funds Availability for $7.2 billion in broadband stimulus funding for construction of wireless network facilities in unserved and underserved areas of the United States. The release will include details of restrictions on those who participate in the grant program, including the FCC "network neutrality" principles already in place as well as expected new restrictions on anti-competitive behavior like delivering the signal of competing content providers at slower speeds than the network owner's own programming.

One FCC desire is that the networks built with grant funds offer the fastest available data transmission speeds. It will not be clear until the NOFA is released whether the FCC will include objective data speed requirements, or will merely give award preferences to those applicants offering the highest transmission speeds.

Agriculture Department Broadband Grant Rules Coming June 30

USDA Undersecretary for Rural Development Dallas Tonsager announced yesterday that rules governing grants for broadband construction provided for in the stimulus legislation under the Rural Utilities Service will be published by June 30, opening the way for interested businesses to apply for these funds.

Lobbyist: Verizon Lukewarm Towards Stimulus Broadband Grants

Verizon Communications chief lobbyist Tom Tauke said yesterday at a news briefing that Verizon expects most of the federal stimulus grants for wireless internet expansion construction to go to state and local governments, who will then contract the actual network construction to companies best positioned to expand high speed internet access to unserved and underserved areas. Verizon is going to stay away from these grants as it positions itself to oppose proposals for stricter federal limitations in Verizon's ability to give preference to its own content on its networks. I guess this means Verizon is going to leave the construction work to the little guys, contracting with local governments which receive the grant funds.

Big Players Missed At Broadband Hearings

House Energy and Commerce Communications Subcommittee Chairman Rick Boucher noted Thursday the conspicuous absence of AT&T and Verizon from his hearing on competition in the cellular business, further complicating the effort to get the $7.2 billion broadband expansion program funded in the economic stimulus bill off the ground. Boucher is contemplating legislation making it easier for consumers to switch carriers without buying a new cell phone, and to guarantee that wireless internet traffic can freely roam on and off the networks of competing carriers.

Meanwhile, FTC Chairman Jon Leibowitz announced Wednesday at a conference of the Computer and Communications Industry Association in Washington, D.C. that his agency plans to take a bigger role in ensuring an open internet. We can only hope that these industry/agency battles don't create too much more delay in groundbreaking for the construction work funded by this appropriation.

Broadband Construction Grant Guidelines Due This Summer

Speaking Tuesday at a wireless telecommunications conference, Bernadette McGuire-Rivera, Associate Administrator of the National Telecommunications and Information Administration at the Commerce Department, and David Villano, Assistant Administrator of Telecommunications Programs at the Department of Agriculture, both announced that their agencies' guidelines for disbursing the $7.2 billion appropriated in the stimulus legislation for broadband expansion in underserved and underserved areas of the United States will be issued this summer. Villano promised USDA guidelines by June 30, but McGuire-Rivera would only commit Commerce to "sometime this summer."

It remains to be seen whether broadband service purveyors will be interested in applying for grant funding once the guidelines are released. Industry leaders have been saying they don't want the funds if restrictions on their network expansion connected with the appropriated money are too onerous from their point of view.

Political Wrangling Ties Up Broadband Expansion Grant Funds

House Energy and Commerce Chairman Henry Waxman and Energy and Commerce Subcommittee Chairman Rick Boucher want most of the broadband funds to be divided among both unserved and underserved regions of the country, while Senate Commerce Ranking Member Kay Bailey Hutchison and House Commerce Ranking Member Joe Barton want to concentrate on areas with no broadband service at all. Until their differences are resolved, $7.2 billion sits in the vault unspent. No towers or fiber optic lines are being built to bring broadband service to customers who don't have internet connectivity.

Is $7.2 Billion For Broadband Construction Going Begging?

In remarks at a convention of the cable TV industry in Washington D.C. yesterday, House Energy and Commerce Communications Subcommittee Chairman Rick Boucher spoke out against open access requirements which could discourage major cable networks from applying for $7.2 billion in grants for construction of broadband towers and other facilities to make internet access available in presently unserved and underserved areas of our nation. The funds, appropriated in the economic stimulus legislation passed earlier this year, have so far been rejected by major cable operators because of the absence of a clear regulatory definition of what "open access" means in terms of availability of facilities to other networks at wholesale rates. Boucher urged the major industry players to apply for the grant money.

Another bottleneck in the way of funding these tower construction contracts is the dispute among Congressional leaders over where the money should be spent. Boucher and House Energy and Commerce Chairman Henry Waxman want the new facilities to be built in both unserved localities, and underserved localities where some service is available. Republicans Joe Barton and Cliff Sterns, ranking members on Waxman's committee and Boucher's subcommittee, want to restrict all the $7.2 billion to construction in completely unserved localities. Until these two regulatory bottlenecks are resolved, the construction contractors waiting for these projects to be released for bidding will continue to go hungry.

Broadband Mapping May Delay Network Construction Contracts

Representative Cliff Stearns of Florida, ranking member of the House Energy and Commerce Communications, Technology and The Internet Subcommittee, and Representative Anna Eshoo of California, raised their voices today against expenditure of the $7.2 billion appropriated for extension of broadband networks into unserved and underdserved areas until after completion of a national broadband inventory map now being prepared by the National Telecommunications and Information Administration of the Commerce Department.

Now that Congress is committed to spending this money, it seems government officials just can't resist throwing up bottlenecks to actually sending checks out the door to contractors who need and want to do the work.

Will Open Access Stall Stimulus Broadband Construction?

Consumer advocates are pressuring the Commerce Department to make open network access a condition attached to disbursement of economic stimulus appropriations for construction of expanded of broadband networks. Wireless carriers say requiring them to permit all carriers use of their newly built towers will be counterproductive to universal service by slowing investment in construction of new networks. The Commerce Department is weighing the opposing arguments as it formulates the details of spending this $7 billion appropriation.

Internet Construction Funding Bottleneck

Jonathan Adelstein, the FCC commissioner tapped by President Obama to head up the Rural Utilities Service within the Department of Agriculture, acknowledged today that FCC has been too slow in funding Bush era projects for health information technology in rural areas. Of 69 projects for which funds were appropriated, only 37 are in the vendor selection process and only one has actually been funded thus far. This does not bode well for the pace of spending the $7.2 billion appropriated for rural broadband construction projects in the economic stimulus legislation. The bulk of these projects are to be administered by RUS, under Adelstein's leadership.

Vislack Announces Broadband Construction Grant Process

Agriculture Secretary Tom Vislack, accompanied by some junior officials from the Commerce Department, announced the process both agencies will follow in distributing a total of $7.2 billion for broadband network construction in rural and impoverished areas. The grants will be released in three rounds, beginning with round one April through June 2009. The second release will be October through December 2009, and the final round April through June 2010. Check here for listings of the grants when they become available:

http://grants.gov

Internet Expansion Is The New FCC Priority

Announcing his nomination of Julius Genachowski to chairmanship of the FCC, President Obama charged the new leader with designing a plan to bring broadband internet connectivity to rural and low income areas within one year, signaling additional federal spending on communications network construction in the coming months. If you are in the wireless broadband tower construction segment, keep your eyes on the FedBizOpps.gov website for your chance to bid on these projects.