Broadband Stimulus Post-Game Recap

By John M. Celentano, Market Development Manager, TESSCO

Reprinted from Connected Planet

Well, folks, the clock has run out and the Broadband Stimulus Bowl is over. This contest is one for the history books. The Recovery Act set a prize of $7.2 billion for this event with $2.5 billion in the Rural Utilities Service (RUS) Broadband Initiative Program (BIP) and $4.7 billion in the NTIA’s Broadband Technology Opportunity Program (BTOP). BIP funds are intended for broadband access (last mile) network deployments in poorly served or unserved areas. BTOP grants are intended to support comprehensive community infrastructure (middle mile) inter-city, inter-building, and public safety facilities; public computer centers (community entities-schools, libraries and municipal facilities); and sustainable broadband adoption (broadband education and training programs).

Why wasn’t more money allocated to wireless infrastructure? Wireless systems can extend broadband to subscribers over many miles at much lower deployment costs, around $1,500 per subscriber for the access portion (base station and subscriber units). Moreover, wireless systems are easier and faster to deploy than trenching fiber cable over long distances. It appears to be a matter of numbers or maybe less familiarity among the reviewers with wireless broadband, even with many wireless products on the RUS LOM.

BIP budgeted $10,000 per subscriber for FTTH deployments. Most of these projects are in rural areas with lots of wide-open spaces, so deployment costs will be higher than if FTTH were deployed in denser-populated areas. Still, that figure is probably 2-3 times what can actually be done to extend fiber into rural markets.

Comprehensive community infrastructure (CCI)/middle mile BTOP projects are adding significant dark fiber capacity to the national network. While there is a "build it and they will come" feel to some of these projects, if the demand for broadband services continues, that capacity should be burned off at a steady pace. Still, it behooves players on both the last mile and CCI squads to team up to make end-to-end broadband a winner.

Overall, $9.4 billion was designated for 653 projects with $6.6 billion in grants, $1.3 billion in loans, and another $1.5 billion in matching funds. Infrastructure projects took 434 awards, with $5.8 billion in grants and $1.3 billion in loans.

The first half--Round One--was a free-for-all with seasoned veterans almost overrun by a pack of undisciplined, freewheeling walk-ons and free agents scrambling to score a piece of the action. Those that couldn’t demonstrate viable performance were cut almost immediately.

Second half action in Round Two was much more orderly with applicants showing more disciplined approaches and greater technical and economic feasibility.

Team BIP Highlights: A total of nearly $4.0 billion, well above the original appropriation, was awarded in grants, loans, and matching funds to 310 BIP players that include 294 last mile, 12 middle mile, four Satellite Broadband projects and one Technical Assistance grant.

The vast majority, 79% last-mile projects went to wireline plays, either fiber-to-the-home (FTTH) or digital subscriber line (DSL) over copper. A total of 50% of all BIP projects were for FTTH. Another 19% of the plays went to a mix of wireless or hybrid wireless/fiber projects. Wireless-only projects accounted for just 15% of the BIP awards, up from around 5% in Round One.

Team BTOP Highlights: The term “middle mile” was used until Round Two when CCI came into the game, presumably because it applies to projects that involve more than just intercity backbones. CCI applies to backhaul facilities between towns and cities, and interconnecting major institutional buildings and campuses. Over $4.4 billion was awarded to middle mile/CCI projects alone, including $973 million in matching funds. As expected, the majority (83%) of these projects went for fiber technology that is a proven reliable high-capacity technology for inter-city and long-haul applications. Wireless accounted for 10% of BTOP projects along with another 7% that went for hybrid fiber-wireless combos.

A couple of points to note:

First, the referees (reviewers) faced a monumental task in sorting out projects that had merit from those that did not; they did a commendable job.

Second, most BIP awards went to established companies that have a history of borrowing, and repaying, RUS funds. Scores of BIP applicants were turned down flat because they had no track record or because their proposals were not feasible.

Third, fiber projects far outweighed wireless alternatives. This is, in part, because more wireline companies (independent telcos, ISPs, small cablecos) applied for funds. Fiber systems are the safe bet; the technology is stable and the players are established. Fiber equipment manufacturers are well-known, reliable, and have a good performance record. Plus, most of the FTTH products picked for these projects already are on the RUS List of Materials (LOM).

WCAI Webinars to Focus on Broadband Stimulus, Alternative Funding in U.S., Spectrum Policy in LatAm

WCAI will host three webinars in February to examine broadband stimulus and alternative funding opportunities in the United States, as well as spectrum policy issues in Latin America. Coming up this Friday, February 5, at 11 am EST is a Webinar on the Second-Round Broadband Stimulus NoFAs released by the NTIA and RUS last month in their second funding round. This webinar is restricted to WCAI members.

Our second Webinar on Alternative Funding for Operators in Emerging Markets is scheduled for February 9 at 4 pm EST. Whether you are a start-up looking for funding to kick-start your business or an established operator in search of additional investment, join us next week to learn about alternative funding opportunities available to operators in rural and emerging markets. This is an open event with no charge.

If you are interested in spectrum policies, especially in Latin America, do not miss the WCAI Webinar on Spectrum Policy in Latin America scheduled for February 26 at 11 am EST. Presenters Allan Ingraham, the Founder and Partner of Empiris, LLC, and Wayne Leighton, the Professor of Economics from Francisco Marroquín University, Guatemala and Partner, Empiris, LLC, will discuss current spectrum policy issues for several countries in the region, with special emphasis on Brazil, Chile, Colombia and Mexico. This is an open event with no charge.

We look forward to seeing you on the Webinars!

JAB Wireless Targets its 50th Acquisition

JAB Wireless, Inc., headquartered in Englewood, Colorado, continues its growth in 2010 as the leading fixed wireless service provider in the U.S. In May 2006 JAB commenced operations with the acquisition of six wireless Internet service providers in Colorado and Utah, and is now targeting its 50th acquisition planned to close soon. JAB provides wireless Internet and digital phone service to tens of thousands of subscribers in Colorado, Wyoming, Utah, Idaho, and Dallas/Ft. Worth. JAB is a member of WCAI and is active in the Emerging Markets Committee and the 3.65 GHz Working Group.

We asked JAB founder Jeff Kohler about the challenges of consolidating so many companies in so little time. “It takes a lot of experience and capital to execute a plan like this, and you can’t rely only on acquisitions for growth. Organic growth must be equally as strong.” JAB’s executive management team has extensive experience in capital formation and consolidations in the communications industry, and with wireless Internet they say the same fundamental disciplines apply: make accretive acquisitions in your geography, compete with a good product, and take care of your customers. Of JAB’s 250+ employees, almost all have come from the acquisitions.

Operating in unlicensed last mile spectrum, JAB has found that using the latest generation equipment, licensed backhaul, and buying out the competition has allowed the company to operate virtually interference free. They have recently deployed 3.65 WiMAX in its markets.

When asked why JAB had not applied for broadband stimulus money, Kohler replied “for several reasons, but mostly because our strategy works and making accommodations for this particular program is a potential roadblock to executing our business plan.”

For more information on the company please visit www.jabwireless.com, and its operating company websites www.skybeam.com and www.digis.net.

Airspan 3.65 GHz Band FCC Certification Redefines U.S. WiMAX Arena

By Guest Blogger Dori Erann, Senior Director of Marketing Communications, Airspan

Due to recent Airspan developments, wireless operators are now able to take advantage of the full 50 MHz (lower and upper) 3.65 GHz frequency band. Until now, the lightly licensed frequency band made only the lower 25 MHz available for WiMAX operation. But earlier this week, Airspan, a WCAI member, announced that it has received the first-ever certification for a WiMAX system to operate in the upper 25 MHz (3675-3700 MHz).

Airspan has been a dominant player in the 3.65 GHz band in the U.S., with a majority market share as well as the first WiMAX system to be certified by the FCC for both portions of the band.

Implementing the FCC’s contention protocol, the Airspan HiperMAX system is now certified for use in the full 3.65 GHz. Existing Airspan customers can take advantage of this certification and can immediately apply for use of the upper 25 MHz. New operators will be able to apply for the full spectrum in their FCC registrations.

The certification applies to both fixed 802.16d as well as 802.16e applications.

There have been many speculations by industry players as to whether the upper ‘unrestricted’ band would be made available by the FCC. Operators nationwide have expressed strong interest and support for this move in order to allow added capacity and range, enabled by the additional spectrum.

Airspan clearly has a market advantage with this surprise certification. And, with double the amount of spectrum, Airspan 3.65 GHz customers will benefit greatly with the ability to integrate more cost effective business models, while better serving their customer base.

The timing of this new Airspan certification is ideal, allowing Broadband Stimulus applicants to incorporate new deployment and business models into their network plans, better meeting agency requirements by extending coverage with double the capacity and/or double the range.

For more information on Airspan’s equipment, please visit http://www.airspan.com/ or contact Declan Byrne, Chief Marketing Officer for Airspan at dbyrne@Airspan.com.

e-Copernicus: Assisting Applicants Obtain Broadband Stimulus Funding

WCAI member e-Copernicus, one of the nation’s premier telecommunications and technology consulting firms, is leveraging its broadband financing experience to help clients obtain federal broadband stimulus funds. Led by Gregory Rohde and Christopher McLean, former NTIA Administrator and former RUS Administrator respectively, e-Copernicus provides clients with high quality, in-depth knowledge about successfully navigating their former agencies’ BTOP/BIP application processes.

e-Copernicus provided strategic advice to wireless, wireline and cable clients in the filing of more than 130 applications requesting over $232 million in broadband stimulus funding. Additionally, the firm worked closely with clients to develop individualized strategic plans for responding to over one hundred Public Notice Filings.

As applicants await notifications regarding progress to Step 2, e-Copernicus recommends that applicants begin thinking about their compliance strategy. e-Copernicus works with clients to devise a project-specific action plan to meet all federal compliance targets, help the awardee calculate and track job creation statistics, and prepare and submit compliance filings.

For Step 2, the e-Copernicus team recommends that:

• Round one applicants awaiting notification on their application should begin compiling data in advance that will be required for the Step 2 Due Diligence Stage;
• Unsuccessful applicants should begin revising their application for Round Two;
• First time applicants should begin developing partnerships and strategies for Round Two funding;
• Current Round One applicants and potential Round Two applicants should consider responding to the soon to be released Request for Information (RFI) to shape the rules for Round Two.

e-Copernicus is a full service consultancy built on an experienced team of professionals with in-depth knowledge of every aspect of federal grant programs. In addition to its two partners, Gregory Rohde and Christopher McLean, the e-Copernicus team includes Carla Anderson, an expert in telemedicine, grant/loan writing, and grants administration, as well as a group of professionals with the experience needed to meet ARRA and grant requirements.

For more information on e-Copernicus services, please visit www.e-copernicus.com or contact Jennifer S. Holtz.

WCAI Seeks Member Input on Second Stimulus Funding NOFA

Now that the filing period for the first broadband stimulus funding NOFA is drawing to a close, we at WCAI have already begun to think about how the process can be improved for the second NOFA. We are soliciting member input on what went wrong with the first NOFA and what might make the second NOFA better. We intend to use this input to help us in formulating our advocacy strategy to improve the second NOFA. Please email me (fred@wcai.com) and WCAI Counsel Paul Sinderbrand (psinderbrand@wbklaw.com) with your comments and suggestions for improving the second NOFA by Aug. 27, 2009.

WCAI Congratulates Jonathan Adelstein on Confirmation as RUS Administrator

The full Senate has approved the nomination of former FCC Commissioner Jonathan Adelstein to be the Administrator of the U.S. Department of Agriculture’s Rural Utilities Service (RUS).

On behalf of the wireless broadband industry, I congratulate Mr. Adelstein on his confirmation to head the rural Internet program. A strong advocate for bringing innovative broadband services to rural America, Mr. Adelstein is the ideal choice to lead the RUS program to distribute $2.5 billion in broadband stimulus funds and promote universal wireless broadband access in the United States.

WCAI to Hold a Webinar on Broadband Stimulus Rules in the U.S.

WCAI will hold a member-only webinar on Wednesday, July 8 at 2 pm (U.S. Eastern Time) to analyze the broadband stimulus Notice of Funding Availability (NOFA) released by the National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) last week and brief the members on the next steps they need to take to apply for the broadband stimulus funds. Speaking on the webinar will be WCAI President Fred Campbell and WCAI Regulatory Counsel Paul Sinderbrand of Wilkinson Barker Knauer. The event will be sponsored by WCAI member Airspan. The webinar is open to WCAI members only and is free of charge. For more information or to register, please contact Angela Wagner at angela@wcai.com.

WCAI Applauds Obama Administration for Releasing Broadband Stimulus Funds

Vice President Joe Biden today announced the availability of $4 billion in loans and grants to bring broadband to unserved and underserved communities. This is the first round of the funding NTIA and RUS will disburse under the American Recovery and Reinvestment Act of 2009.

On behalf of the wireless broadband industry, I applaud the Obama Administration for taking this critical step toward bringing broadband access to rural America. As the only platform that provides access everywhere, all the time, wireless broadband is essential to achieving universal broadband connectivity, creating jobs and encouraging economic growth. WCAI members are eager to begin the broadband stimulus application process and get to work building a better America.

WCAI will hold a member-only webinar on July 8 to analyze the broadband stimulus NoFA released by the NTIA and the RUS today and brief the members on the next steps they need to take to apply for the broadband stimulus funds. For more information, WCAI members should contact Susan Polyakova at susan@wcai.com.

WCAI Congratulates Julius Genachowski, Robert McDowell and Lawrence Strickling on Confirmation to FCC, NTIA

Last night, the Senate voted to confirm Julius Genachowski as FCC Chairman, Robert McDowell as an FCC Commissioner, and Lawrence Strickling as NTIA Administrator. On behalf of the wireless broadband industry, I want to congratulate Chairman Genachowski, Commissioner McDowell and Assistant Secretary Strickling on their confirmations to serve on the FCC and at NTIA. These confirmations come at a critical time, when the FCC is crafting a national broadband plan for our future, and NTIA is poised to disburse $4.7 billion in broadband stimulus funds to bring additional broadband services to America.

The confirmation of Chairman Genachowski is great news for both the industry and users of wireless broadband services. His proven record of success in both public policy and business development is a harbinger of great things to come at the FCC.

A strong advocate for supporting competition in the marketplace, Commissioner McDowell has been a long-time friend of the wireless broadband industry. His deep knowledge and significant experience in the communications industry will continue to serve the FCC well during his second term.

A leader in the communications sector with deep knowledge of the industry and extensive experience in public policy and business development, Assistant Secretary Strickling is an excellent choice to head NTIA as it works to promote innovation, create jobs and achieve universal broadband access in the United States through the broadband stimulus program.

We at WCAI look forward to working with Chairman Genachowski, Commissioner McDowell and Assistant Secretary Strickling to promote innovative wireless broadband services and achieve universal wireless broadband access in the United States.

Save the Date for the WCAI’s Wireless Policy Summit!

As the new Administration is acting on its commitment to bring broadband access to all Americans, we at WCAI are organizing a Wireless Policy Summit to examine the role of wireless in achieving universal broadband access at affordable prices. A premier event for the wireless broadband industry, the Summit will offer an open forum for exchange of ideas and presents an ideal opportunity to meet face-to-face with top decision-makers who are shaping the future of the industry in 2009 and beyond. Come join key officials from government and industry as they debate such critical issues as:

• Wireless and the Broadband Stimulus Package

• The Role of Wireless in Universal Broadband Access

• Application of Net Neutrality Principals to Wireless Broadband Networks

• Reforming Spectrum Management: What’s Next?

• Building a Wireless Broadband Network for Public Safety

The Summit will be held May 5-6, 2009 at the Grand Hyatt Hotel in Washington, DC, with May 6 being reserved for member-only activities. More information is available on our website.

We look forward to seeing you in May!