My experience with the Broadband Stimulus programs leads me to believe that it is a good idea that has been twisted around and is in the process of being gamed by many of the applicants. I am a provider in a very rural area and have been able to deliver at least 1meg broadband across the majority of my service area. There are several other WISPs (Wireless ISPs) that are also providing at least 1meg service in and around my service area and despite the rural nature of our area, nearly everyone in Western Nebraska and Eastern Wyoming has a choice of broadband providers.
Despite the robust competition here, there are multiple BBStim applications that are proposing to cover large parts of this area with services that are either duplicative of what is already available. I intend to protest nearly all of them, but according to several consultant/lawyer types, the burden of proof is on the protester to show that the areas should not qualify. Many of the smaller providers have not filed the FCC Form 477 that shows their coverage areas by census block simply because they don’t have that data. It cost us nearly $5000 to get that data together, and after putting the data together we found that the geocoding engines are very inaccurate and only about 60% of the data we got was correct. Listening to others in our industry, it sounds like everyone is having that problem, so until we have better tools for getting the data together and reporting it there is going to be a big disconnect between the data that is available and what is actually out there. Essentially, I don’t think that the data is accurate enough to make the funding decisions that are outlined in the stimulus plan.
Another item that has come up is the “gerrymandering” of applications to come up with a percentage of unserved or underserved areas that are adjacent to areas with adequate broadband service. This appears to be a common practice in many of the applications, and will be used by those applicants to provide more duplicative services in already served areas. This is something that many USDA project recipients have been doing for years, and undercuts the credibility of the program. This is the “gaming” of the system that I referred to earlier.
Many of the program requirements are also a significant deterrent to broadband providers, especially smaller ones. I looked at the programs but could not come up with a reasonable way to apply for any of them because the requirements were not suitable for a business of my size. The paperwork is substantial, requiring a large investment of time and ongoing auditing requirements that small to medium size operators will be able to provide. The minimum dollar amounts are also enormous, and only cover capital costs. Many rural WISPs gross under $1million in annual revenue, so taking on even a $500,000 project looks way too big for many smaller operators to handle. Operational costs should be allowed, especially if part of the goal of this program is to create jobs. $500,000 in equipment might also cost nearly that much to put in service, so it is asking a lot of a provider to take that risk especially when there is no guarantee of payback of that investment when going into an underserved area.
My last comment is about looking at the problem from the demand side. The entire broadband stimulus program has been put together to encourage service providers to build out to underserved/unserved areas. This only addresses half of the equation. Even though I have 1meg or faster service available to my entire customer base, 60% of my customers are on the sub 1 meg plans. There are also a lot of dialup customers out there who do not want to upgrade because of the installation costs for a true broadband connection. I would prefer to see part of the stimulus funds dedicated to a consumer centered program that provides a rebate similar to the Digital TV set-top box program for customers who wish to install a broadband connection. This is something that would benefit all broadband providers and remove many of the economic barriers to broadband adoption. I know that it costs us at least $300 in labor and materials to put a new customer on our network, so even a partial rebate would be an enormous help to get the non-adopters on board.
Round 1 is over except for the protests, but the terms might change in future rounds. Here’s hoping.
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