Suggested Revisions for Broadband Funding Flood NTIA, RUS

The National Telecommunications Cooperative Association urged NTIA and RUS to delay the second round’s start until March. “NTCA appreciates the time constraints imposed on NTIA and RUS, but there are known flaws in the process that will take some time to thoroughly address and potential other issues that are unknowable until the first NOFA is further along.” The postponement would still give the agencies enough time to award all funds by September, as required by the Act, the association said.

Many commenters urged revamps to the application process. “The application process should be streamlined significantly, and perhaps completely overhauled,” said the American Library Association (ALA). “Many libraries were completely overwhelmed by the detailed rules, the lengthy and sometimes contradictory documentation, and the confounding web interface.”

State review of Broadband Technology Opportunities Program proposals is an “essential step” in the award process and the requirement should be retained, said NASCIO, which represents state chief information officers. The group also suggested streamlining the application process and making it as publicly transparent as possible. Monte Lee and Co., an engineering consultant, agreed applications should be streamlined by changing the mapping calculation function to reduce applicants’ research time. Linking applications also could help joint projects, it said.

Others complained about the process for incumbents to review applications, designed to ensure they don’t cover already-served geographic areas. USTelecom said the system was “extraordinarily difficult to use,” and recommended as “added insurance … a post-award process that would offer recourse in the case of improper awards.” AT&T urged the agencies to require applicants to “disclose publicly the data upon which they rely and the methodology they used to determine that a proposed funding service area is unserved or underserved.” The review process “is unnecessarily burdensome and inefficient,” said NTCA. “Incumbents can only be thorough if they can effectively search the applications.”

USTelecom said second-round rules should encourage more participation by “experienced” broadband providers. “Many of our nation’s most experienced broadband providers were forced to sit on the sidelines during the first round of funding,” said President Walter McCormick. The association urged the agencies to “modify the rules relating to nondiscrimination and interconnection to not exceed the [FCC’s] broadband Policy Statement,” and “clarify that vendors, suppliers providing inputs to stimulus projects and third parties leasing space or capacity on awardees’ facilities are not subject to those rules.”

EarthLink said the agencies should keep the nondiscrimination and interconnection rules, which it said recognize the importance of competitive wholesale broadband access. The company urged additional rules requiring funding winners to provide “fully functional and comprehensive” operation support systems and application programming interfaces for wholesale services. “The lack of adequate, fully functional and real-time OSS and APIs by broadband providers is a gating impediment to bringing even more consumers competitive broadband services,” EarthLink said.

Some sought revisions enabling more anchor institutions to receive funding. The ALA said “rules in the first round were skewed in favor of residential applications, but the limited amount of funding available will not come close to serving the needs of residential consumers.” AT&T said “the rules for the first round of funding precluded anchor institutions from obtaining infrastructure funding unless they effectively functioned as broadband network operators.” AT&T said an anchor institution should be eligible for funding if it wants to add a high-capacity connection to an existing broadband network. The agencies should expand the definition of “eligible expenses” to cover associated costs, it said.

Civil rights groups urged more funding for adoption programs. “We recommend NTIA and RUS place greater importance on the issue of affordability in round two by mandating that deployment efforts to low-income consumers include affordable broadband service and hardware,” said the Minority Media and Telecommunications Council and four other groups in joint comments. The agencies should reserve some round-two funding for minority-owned businesses, and consider “special rules” and more funding for tribal areas, they said.

Projects that demonstrate a link between unserved areas and public-private partnerships should get priority, the United Tribes of North Dakota said. “Indian tribes, particularly those in the Great Plains, are the most in need of broadband access.” The agencies should make unserved populations their “foremost priority” when awarding grants, and tribes should be exempted from any decrease of points used to rate proposals due to presence of operating service providers in the proposed service area, the group said.

The first round was “geared heavily toward proposals that would bring broadband facilities to rural and low- density areas,” Cricket said. “Although increasing the availability of broadband in such areas is an important goal, NTIA should not overlook the significant segment of the U.S. population who simply do not have access to affordable broadband services.” The wireless carrier suggested widening the definition of “underserved” to account for affordability in addition to subscribership levels.

Rural carriers urged the agencies to loosen the definition of a “remote area,” which had raised alarm bells in Congress. The first-round definition was an unserved rural area at least 50 miles from an area that isn’t rural. “Applications seeking more favorable funding terms should be assessed on their own specific circumstances and merits, such as the presence of difficult terrain, geographic isolation, sparse populations, etc., rather than an arbitrary mileage factor,” said the Organization for the Promotion & Advancement of Small Telecommunications Companies. Rural companies also urged the agencies to give points to applications based on the proportion of consumers served in a rural area, rather than the number. In round one, the agencies awarded a point for each 10,000 unserved households. NTCA said that approach “is inconsistent with the distribution of households in rural areas and unfairly skews the evaluation criteria toward the larger providers.”

Some small providers were unhappy about the definition of “rural” in the grant rules, a concern also voiced by rural members of Congress in recent hearings (CD Sept 11 p1). “The most ironic and confounding result of the first NOFA is that the Rural Utilities Service made being ‘rural’ a disadvantage,” said Bend Cable, which operates in rural Oregon. Stretches of the company’s service territory that are roadless still don’t qualify as rural under grant rules because they're within 50 miles of communities that have service, Bend said. This restriction should be lifted in the second round. The cable operator also said applications should be allowed to be submitted to NTIA without having to go to RUS when part of the service area would be considered rural.

The Montana Telecom Association supports retaining the requirement that applications first be submitted to RUS to maintain due diligence: “RUS and NTIA should focus stimulus activity in areas of greatest need.” In particular, the agencies should not grant applications that duplicate or overbuild existing broadband networks -- “a significant problem with Round 1 applications.” The group cautioned against “substantial revision” of the definition of “remote area.” NTIA can entertain comments on modifying the 50-mile standard, “but not at the expense of compromising the objective” of getting service to areas most in need. Eastern Oregon Telecom said the requirement that rural projects apply to RUS puts companies like it at a disadvantage due to the matching grant/loan requirements. “Since EOT has never received RUS funding before, other companies would receive priority consideration ahead of us.”

The agencies shouldn’t prioritize certain types of projects, such as middle-mile work, OPASTCO said. “The relative benefits of awarding funding to individual applicants are dependent on many factors that may vary greatly from one proposal to another. In some areas, middle mile projects could best help achieve the overall goals of the Recovery Act. However, in other places, last-mile projects, or those focused on economic development or specific populations, etc., might represent the most beneficial use of funding.” However, NTCA said the agencies should give fewer points to middle-mile than last-mile projects. “The cost of middle mile facilities per subscriber is much less than the cost of last mile facilities per subscriber,” the association said. “While the cost per mile to place fiber is comparable whether the facility is last mile or middle mile, middle mile serves all of the subscribers, while much of last mile facilities are dedicated to some or one subscriber. This fact of shared cost for middle mile facilities makes middle mile a more efficient deployment and less in need of support.”

RUS and NTIA must “fine tune” criteria used to review middle-mile projects, AT&T said. “The current approach to middle mile funding poses the significant risk that RUS and NTIA will subsidize projects involving the overbuild of broadband infrastructure.” For the second round, agencies should adopt the definition of middle mile used by the FCC, the company said, and require applicants to show that their middle-mile proposals “will extend service to an unserved or underserved area and will provide lower cost service than is available from existing service providers.”