Broadband grant frustrations mount
More broadband stimulus awards were handed out this week, but the process continues to move at a snail’s pace, despite the fact that the National Telecommunications and Information Administration (NTIA) and the Department of Agriculture’s Rural Utilities Service (RUS) program now have issued rules for the second round and declared that applications are due March 15.
NTIA and RUS are in charge of doling out a total of $7.2 billion in grants and loans to bring broadband to unserved and underserved areas in the U.S. The first-round recipients will receive $4 billion, but only a fraction has been awarded.
It’s a frustrating process for applicants given the fact that the applications for the second round are due a little more than six weeks from now. According to Stimulatingbroadband.com, both the NTIA and the RUS are in the process of mailing out rejection letters to those who applied for first-round funding. NTIA, which is in charge of the majority of funds, is aiming to mail out the bulk of letters by Jan. 30 and make all award announcements by the end of February. RUS is working on getting its letters out by mid-February. The timeline is important given the fact that applicants cannot apply for funding in the second round for areas already receiving funding.
NTIA and RUS plan to release an electronic map that identifies what geographic areas have been granted money, but critics say the maps don’t give enough information, such as breaking out middle-mile and last-mile projects, or specifying the number of applications pending for a given area.
Meanwhile, it is evident that the bulk of funds are going to middle-mile fiber projects and private/public partnerships that involve state and/or local governments, a trend that bodes well for public safety. NTIA and RUS, in explaining the new rules for the second round, have indicated public/private partnerships will receive top priority.
The most recent round has the RUS giving out nearly $310 million in funds, many for last-mile fiber projects. Prior to that, NTIA handed out $63 million. The split is happening this way: NTIA, which is handing out the bulk of the funds, is focusing on middle-mile projects, while RUS is focusing on last-mile projects. That trend is expected to continue in the second round.
Middle-mile projects are receiving top billing because they are positioned to serve as the backbone network that other providers can interconnect with to expand broadband services to the masses. The question is: Will broadband operators have the incentive to interconnect?
Daniel Hays, partner with PRTM, a global management consulting firm, believes an emphasis on middle-mile projects may slow down broadband adoption in underserved areas.
“I question whether middle-mile projects are really going to satisfy the needs of those that are underserved by broadband. The middle-mile projects are going to take a long time to come to fruition themselves and even longer to deliver broadband,” Hays said. “If I was to describe the typical middle-mile applicant, it appears to be a public/private partnership looking to extend the reach of fiber into their local region. … Most appear to be approved more for redundancy and expansion rather than new access.”
Meanwhile, the vast majority of 2,200 applicants that applied for funding in the first round are those entities looking to provide last-mile broadband access. That is, delivering broadband services directly to end users. Additionally, the bulk of those last-mile applicants proposed using wireless as a way to bridge the digital divide, but very few of these applications so far have received funding. Wireless proposals, it appears, aren’t being deemed as safe an investment as fiber.
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