Thursday, April 30, 2009

Matsui, Markey & Colleagues: Remember "Underserved' Areas

Rural vs. Urban in Broadband Funding Debate 04/30/09 Boston - Congresswoman Doris O. Matsui (D-CA), Congressman Edward J. Markey (D-MA), and 5 colleagues from the House Commerce and Energy Committee yesterday issued a joint letter calling on Obama Administration agencies to remember that Congress intended the broadband stimulus provisions of the federal Recovery Act to support urban underserved areas.

The powerful group of letter signatories clearly demonstrates that the political forces representing urban interests in Washington will demand, and we believe will receive, robust funding from the Act for stimulating broadband access and usage in urban communities underserved by broadband networks.

“While there is a strong focus in the ARRA on rural areas, we want to ensure that underserved urban areas are properly considered during the broadband grant process", wrote the Members. "Specifically, we request that low-income urban populations be considered as potentially underserved populations when you and your agencies develop the broadband grant programs and finalize the requirements for these programs.”

Joining Matsui and Markey were fellow Committee members Bobby Rush (D-IL), Michael Doyle (D-PA), Diana DeGette (D-CO), Kathy Castor (D-FL), and Donna Christensen (D-V.I.). All 7 signatories are members of the Subcommittee on Communications, Technology, and the Internet, now chaired by Rep. Rick Boucher (D-VA).

Matsui's press release of yesterday states that she "initiated" the letter that was sent to the agency heads of the Federal Communications Commission (FCC), the National Telecommunications and Information Administration (NTIA) of the Commerce Department, and the Department of Agriculture's Rural Utilities Service (RUS). John Eggerton of Broadcasting & Cable first reported the story yesterday.

The letter addresses a simple matter of arithmetic and law in the American Recovery and Reinvestment Act of 2009 (ARRA). The $4.7 billion appropriated to the
National Telecommunications and Information Administration (NTIA) within ARRA maybe be divided between rural 'unserved' and urban 'underserved' areas at the discretion of NTIA. Of the $2.5 billion allocated to RUS, 75% must be apportioned to rural areas. Broadband networks for rural unserved regions will cost tens of billions in capital expenditures (capex) from ARRA, and in operating subsidies for years going forward. The latter operating expenditure (opex) requirment of networks serving low customer densities gives impetus to Members and regulators attempting to reform the Universal Service Fund (USF) subsidy structure.

“To fully close the digital divide we must address the affordability of broadband for many low-income families,” the letter sent yesterday continued. “Although these families may have several different options for broadband access, they are underserved if none of these options are affordable. It is our hope that the grant programs will address this population to ensure that all Americans have the chance to benefit from ubiquitous broadband services.”

Matsui, representing the City of Sacramento and several Yolo County suburbs of the California capital city which comprise the Golden State's 5th congressional district, has had a remarkable rise through House ranks during her brief tenure. She was appointed to a coveted seat on Commerce and Energy last year, while the full Committee was still chaired by long serving Chairman John D. Dingell (D-MI). Dingell was famously dislodged as Chairman this year at the start of the 111th Congress, by Henry A. Waxman (D-CA). Speaker Nancy Pelosi (D-CA) had come to agree with a consensus in her Democratic Caucus that Dingell's continued 'no questions asked' defense of Detroit had become a political liability. Matsui, who took the seat of her late husband Congressman Robert Matsui in 2005, is demonstrating her own marked political skills.

Markey, representing the Massachusetts 7th congressional district comprised of both working class cities like Everett, Malden, Medford, and Waltham, and suburbs along Route 128 ("America's Technology Highway") filled with technology start-ups and stalwarts, had been the long term Chairman of the Subcommittee until this year.

He is most well known as being the father of the Telecommunications Act of 1996 which spurred much of the Internet - telecom investment boom in the years 1997-2001. Now dean of the Massachusetts delegation, Markey was first elected to Congress in 1976, one year before his colleague from the neighboring Massachusetts 8th district, Thomas P. "Tip" O'Neill, became Speaker of the House for 10 years.

With the beginning of the current 111th Congress, Markey vacated the chairmanship of the communications Subcommittee, passing the gavel to long time colleague Rick Boucher. Importantly, Markey simultaneously was appointed Chairman of the new House Select Committee on Energy Independence and Global Warming, and Chairman of the Subcommittee on Energy and Environment under the full House Commerce Committee, chaired by Waxman.

Although signed by only 7 Members, the letter represents a powerful statement by a powerful bloc in the House. It reminds us, as we have all spent so much time digging into the details of rural broadband deployment, about a collateral set of priorities. These policy priorities recognizing unserved populations will be addressed by ARRA financed programs, and by the FCC in the new National Broadband Plan also mandated by the Act. Thanks to the Act, rural broadband will prosper like the nation has not seen previously. At the same time, monies will flow from Washington for computer literacy, rewiring of libraries, schools, community centers, and yes even urban wireless models (if someone can frame one that works), for cities around the country.

Our Take: Urbanized precints of the nation have comprised the geographic backbone of the Democratic Party since the New Deal. With Democrats now in control of both ends of Pennsylvania Avenue, the Obama Administration will recognize Members of Congress calling for policies which support that constituency. The Members that signed yesterday's letter to the federal agencies, particularly Chairman Markey, have the clout and connections to make their collective voice heard.

Texas Broadband: Two State Agencies Launch Broadband Mapping Project 04/30/08 (Editor's Note: This story, first posted at 6:31 am today, has been updated with several follow-on quotes, background on the national broadband mapping debate, and a citation that clarifies the going forward release of an RFP. Updates posted: 9:58 pm)

Two Texas state agencies have jointly issued a Request for Information (RFI) that launches the Lone Star State's first official effort to map broadband telecommunications services across the second largest (by area) state in the nation.

The RFI (download .PDF) was issued in tandem by the Texas Department of Agriculture (TDA) and the Public Utilities Commission of Texas (PUCT).

"New communication technologies are shrinking our world, and it is essential we make sure Texans don't miss out on these new tech tools," TDA Commissioner Todd Staples said in a joint agency press release issued on April 27. "Expanding broadband service is key to creating opportunities and efficiencies for all Texans, from private citizens and businesses to healthcare and education."

"We are happy to be working with the Agriculture Department on this broadband project, said Barry Smitherman, chairman of the Public Utility Commission, in the same release. "It is an important opportunity to bring broadband service to areas that do not have this valuable service today."

With a posted response deadline of May 15, the RFI lives up to its name as it requests a wide range of information from responding experienced broadband mapping companies. Firms are asked to describe how they would assign broadband metrics for unserved and underserved areas, and map the collected data.

The RFI references provisions of both the American Recovery and Reinvestment Act of 2009 (ARRA), and of the Broadband Data Improvement Act of 2008 (BDIA) (downland full text .PDF) as providing potential funding for the project. ARRA carries $350 million in appropriations for broadband mapping, to be administered by the National Telecommunications and Information Administration (NTIA) of the Commerce Department. BIDA (summary here, analysis by Mintz Levin here) directs the Commerce Secretary establish "grants to develop and implement statewide initiatives to identify and track the availability and adoption of broadband services within each state".

Importantly, the RFI document requests suggestions from respondents for funding sources for the 20% state cost matching requirement of BDIA, although it also suggests TDA plans to apply for broadband mapping funds under the ARRA.

The RFI requires that all respondents be " with proven experience in delivering statewide broadband mapping...that can specifically address the initiatives and capabilities set forth in the BDIA."

Mr. Rick Rhodes, Assistant Commissioner for Rural Economic Development at TDA, is administering the RFI process. Rural Economic Development is one of 7 divisions within TDA.

The RFI contemplates the issuance of a Request for Proposals (RFP), as it states, "This is not a request for proposals but the information submitted will be helpful in developing such a request once the federal agencies make administration decisions." The two tiered process to move Texas toward a broadband mapping project reflects the importance and magnitude of the data collection and geospatial effort involved.

One Texas based national trade association, the Rural Mobile Broadband Alliance USA (RuMBA) underlined the size and rural expanse that is Texas, stating that broadband mapping " particularly critical for Texas as we possess one of the largest land masses in the country, with border issues, and a need for reliable and available E911 Location services (Phase II) and weather alert systems. With Texas possessing one of US’s largest portions of unserved and underserved rural communities, the mapping process is clearly going to be a daunting process, requiring strong partners. Fortunately," said Managing Director Luisa Handem, "RuMBA is right here, and able to help.”

In the often controversial world of broadband policy, the erstwhile technical issues of broadband mapping have been particularly fraught with contention. With a report issued this March, a coalition of consumer and broadband advocates has called into question the data collection and mapping techniques of Connected Nation. The latter group is a non-profit partially supported by fees from large cable operators and telcos, and which has a Board of Directors that reads like a Who's Who of cable and telecom government relations executives. When conducting broadband mapping projects as it has in several states, Connected Nation serves as a third party entity to shield underlining broadband network information and subscriber counts which the carriers claim is proprietary information. Many regulators, consumer advocates, and municipalities consider this underlying data to be inherently public information.

Ms. Veronica Obregon, Commissioner Staples' Chief Communications Officer, stated in an e-mail of this afternoon to that the TDA will approach the data collection process "through the Request for Information" which will "select a third party company to collect the data to map the state. We plan to work with this company to create a productive map that will not compromise Homeland Security or third-party proprietary information."

The joint RFI issuance involves greater inter-agency cooperation than would be the case in most other states. Under Texas law the Commissioner of Agriculture, who heads TDA, is a statewide elected official. Current Commissioner Todd Staples (R-Palestine) was elected to his first 4 year term in 2006. The PUCT is comprised of a Chairman and 2 Commissioners, all of whom are appointed by the Governor and confirmed by the State Legislature.

Gov. Rick Perry (R-Paint Creek) appointed PUCT Chairman Smitherman, and Commissioners Donna Nelson and Kenneth Anderson. Perry himself served as Agriculture Commissioner from 1991 to 1999. He was elected Lieutenant Governor in 1998, and became Governor upon the election of George W. Bush as President. Governor Perry, the longest serving chief executive in state history, has recently made national headlines for suggesting his state retains a constitutional right to secede from the Union, and for attempting to reject $555 million in unemployment insurance payments due his state under ARRA. Perry is on the front line of the possible emerging (biologically misnamed) swine flu pandemic. This morning the Governor declared a statewide declaration of disaster in order to call for more antiviral medicinal doses and associated assistance from federal agencies. has identified no other state sponsored broadband initiatives in Texas, following the expiration of the Telecommunications Infrastructure Fund (TIF) in 2006. TIF, funded with a 1.5% surcharge on telephone bills, expended $1.5 billion on institutional broadband projects (libraries, schools, hospitals) during its 10 year tenure.

After TIF, the major Texas broadband initiative, Senate Bill 5 of 2005, was sponsored by AT&T (NYSE: T), the former Southwest Bell-SBC Communications of San Antonio. S.B. 5 moved all cable and video franchising to the PUCT, stripping municipalities of a power they had held since the days of community antenna system licenses. The promise of S.B. 5 was broadband delivered by AT&T, via its Lightspeed and Uverse fiber rich networks, and by new DSL roll-outs at all local exchanges operated by the carrier. The legislation was hated by municipalities, the cable industry, and public access advocates. Governor Perry, arguably the biggest backer of the initiative, other than AT&T itself, signed the bill into law in September 2005.

Ms. Handem, of RuMBA, pointed out how few states had conducted statewide broadband data collection and mapping prior to the passage of ARRA despite the importance of these basic efforts. "A portion of the stimulus package funds, allocated to broadband, includes mapping of broadband," said Director Handem. "This means that all states must follow a similar path as California, one of the few states that had the foresight to fund mapping of broadband, ahead of the passage of the Recovery Act, last February." We add the states of Massachusetts, Maine, North Carolina, Vermont, and West Virginia to California, as jurisdictions that conducted mapping with their own resources, and without adopting the Connected Nation model.

Commissioner Staples, who keeps an official blog with social networking links, has his work cut out for him. He enunciates an extensive agenda for rural economic development for his agency, and for Texas as a whole. His Department manages a set of issues from community development, through school breakfast programs, pesticide regulation, to foreign trade. He certainly is correct in recognizing broadband deployment for unserved rural areas as a key part of any rural development mission.

Our take: We congratulate Commissioner Staples for getting the process started.
To paraphrase the national wireless trade association based in Texas quoted above, 'This is a big job, thank goodness someone has started getting it done.'

We hope the Public Utility Commissioners of Texas are equally as proactive as Commissioner Staples, and that the PUCT opens a rulemaking to mandate that in-state carriers and cable operators provide public data for the accurate mapping of their broadband facilities by the firm retained via the eventual RFP process.

We hope the data collection and mapping process is truly an open and transparent process in Texas, as is needed by such a vast and important state of (and still in) our Union.

Wednesday, April 29, 2009

Massachusetts Broadband: Governor Patrick Appoints Sharon E. Gillett to Head Massachusetts Broadband Institute 04/29/09 Massachusetts Governor Deval L. Patrick today announced the appointment of Commissioner Sharon E. Gillett to serve as the first Executive Director of the Massachusetts Broadband Institute (MBI).

Ms. Gillett recently resigned her position as Commissioner of the state Department of Telecommunications and Cable (DTC), in order to prepare to move to become the first chief of the Commonwealth's broadband development authority.

"Investing in broadband is essential to ensuring that our businesses can compete in the global economy, that our children receive the highest quality education, and that our citizens have access to high quality health care and other vital public safety services,” said Governor Patrick. “I am confident that Sharon’s leadership and expertise will be a tremendous asset as we accelerate broadband deployment efforts throughout the state.”

The MBI is a state authority authorized by the Massachusetts Legislature, via legislation signed by Patrick in August of 2008, to develop broadband telecommunications networks in the unserved and underserved areas of Massachusetts. The MBI was inaugurated with a budget of $40 million from state bonding authority, to be dispersed to approved broadband projects. Analysts of the Massachusetts broadband and economic developmental scene believe the majority of MBI's capital projects will be conducted in the 32 towns in Western Massachusetts which have been found to be fully "unserved" by broadband cable, telephone, or wireless networks.

Ms. Gillett had served as Patrick's first Commissioner of the DTC since the spring of 2007. The DTC was created in 2007 as a separate regulatory agency for telecommunications carriers and cable television operators doing business in Massachusetts, as part of Patrick's reorganization of state government in his first several months in office. Previously the regulatory activities of the DTC were housed within the Department of Telecommunications and Energy (DTE), which oversaw regulated electric utilities as well as telecom and cable firms.

Patrick's commitment to bringing broadband facilities to Western Massachusetts began as a pledge during his successful 2006 campaign for governor. In his October 2007 message to legislators filing the bill that created the MBI, the Governor stated his intent to have the state authority "...make strategic and targeted public investments with the objective of providing high-speed Internet, or broadband, service to all currently un-served communities by 2010."

Funding for the MBI's capital investment programs has been further enhanced by the broadband stimulus provisions of the American Recovery and Reinvestment Act of 2009 (ARRA), signed by President Obama on February 17. The stimulus Act appropriates a total of $ 7.2 for broadband projects in regions of the US determined to be either "unserved" or "underserved." Two federal agencies, the National Telecommunications and Information Administration (NTIA) within the Department of Commerce, and the Rural Utilities Service within the Department of Agriculture (USDA-RUS) will disperse the broadband stimulus funds. tracks broadband programs in all 50 states. That effort leads us to believe that states like Massachusetts that have established broadband development agencies stand to gain the most what will be highly competitive grant rounds.

As Patrick's DTC Commissioner, Ms. Gillett became a leading spokesperson nationally. Shortly after the federal rulemaking process commenced, on March 12, the Massachusetts DTC became one of the first state agencies in the nation to issue suggested guidelines for the administration of the broadband stimulus monies. Commissioner Gillett's filed input argues for a strong state role in the federal broadband effort, stating "... We recommend that each governor be asked to designate one point of contact for the state for the grant programs, and that NTIA defer to that entity..".

Commissioner Gillett is considered a national leader in the effort to rework federal and state programs and regulations to bring broadband services to rural and other unserved regions. Until her current appointment, she had served on the Telecommunications Committee of the National Association of Regulatory Utility Commissioners (NARUC). In February she appeared on the C-SPAN cable network's program entitled "The Communicators", discussing broadband stimulus provisions in the draft ARRA then moving through Congress.

Prior to her appointment to head the DTC, Ms. Gillett "...was a Principal Research Associate at the Massachusetts Institute of Technology (MIT) where she chaired the Broadband Working Group of MIT’s Communications Futures Program and taught courses on telecommunications and Internet policy," according to the DTC's website. Ms. Gillett received her MBA and MS in Technology and Policy from MIT and her AB in Physics from Harvard.

Tuesday, April 28, 2009

Massachusetts Broadband Institute: Gov. Patrick Files Legislation Seeking Competitive Edge in Federal Broadband Stimulus Grants 04/28/09 Boston -  Massachusetts Governor Deval L. Patrick (D-MA) has filed legislation to strengthen the legal and operating powers of the Massachusetts Broadband Institute (MBI), the state's previously authorized broadband development authority. His stated purpose in doing so is to better "reap the benefits" of the broadband stimulus provisions of the American Recovery and Reinvestment Act of 2009 (ARRA).

The initiative filed with the Massachusetts legislature on April 24, seeks to clarify the legal powers of MBI, particularly in its authority as a state agency to partially preempt local municipal zoning restrictions. The Institute will be able to do so as it constructs and operates wireless towers, buildings, or other broadband network facilities.

Ms. Kofi Jones, Spokesperson for the Massachusetts Executive Office of Housing and Economic Development (EOHED) stated in an interview today with, "this is a technical clarification matter." Certainly had the legislation sought to empower MBI with greater preemption of local zoning strictures, the measure would likely have generated opposition even in communities in rural Western Massachusetts which MBI is primarily tasked to assist.

National Broadband Stimulus Competition
The legislative proposal, although it arguably does not call for substantive changes under Massachusetts law, is significant vis-a-vis other state broadband programs nationally. If Patrick's bill is passed into law, MBI will be able to demonstrate to federal grant issuing agencies that Massachusetts is proposing broadband projects that are as "shovel ready" as possible.

Several telecom industry veterans have recently confirmed what any operator in the industry knows instinctively: Local permitting requirements are always the greatest cause for delay in any network development project, especially those involving the construction of wireless facilities.

The legal housekeeping measure also diminishes the risk to Massachusetts of litigation from the foes of government operated or subsidized networks. The proposal iterates the public purpose of a state broadband authority acting to maintain ownership of network facilities it pays to capitalize. Current events in North Carolina demonstrate that the opponents of public broadband ventures remain.

The bill also seeks to allow MBI to hold indefeasible rights of use (IRUs) in fiber projects, and to allow the Authority to hold FCC wireless licenses.

MBI was funded with $40 million in state bonded monies. MBI's parent public authority produced broadband mapping of the state almost 2 full years ago. If Patrick is able to win near-term legislative approval of his proposal to clearly delineate the legal status of MBI, of its state parent, and of public and private broadband grant recipients, he will have built the necessary framework to geometrically leverage the Commonwealth's $40 million with federal dollars.

Patrick's Broadband Promise: Policies and Players
The MBI was established by an Act of the Massachusetts Legislature in August of 2008, based on legislation filed by the Governor in October 2007. Bringing broadband to the underserved communities of rural Western Massachusetts was a campaign promise made by Patrick during his successful effort to win the gubernatorial "corner office" at the State House in 2006. The small towns of the region gave Patrick his highest electoral performance numbers in that election.

Prior to Patrick taking up the broadband cause, the successful demand-side aggregation project, Berkshire Connect, launched in 1998, had been supported by the Administration for former Governor William Weld (R-MA). With the exception of US Senator John F. Kerry (D-MA), a champion of Berkshire Connect and of the needs of Western Massachusetts for broadband generally, few statewide officials during the intervening 8 years had taken up the cause. Kerry, a long term member of the Communications Subcommittee of the Senate Commerce Committee, now serves as Chairman of the reconstituted Subcommittee on Communications, Technology and the Internet.

As we previously reported, Kerry recently called the ARRA's $7.2 billion "a down payment on a national broadband strategy" that he will have a significant role in shaping from his Subcommittee chairmanship.

Governor Patrick, owing largely to his close personal and political relationship with President Obama, has been in the front rank of Democratic governors nationally that have both groomed their in-state agencies to receive ARRA monies, and have helped craft the administration of the Act itself.

While Patrick has counted on the support of friends and political allies in Washington, the work of cobbling together his broadband policy, and of knitting it into emerging federal programs, has been done by two of his Administration's aides in Massachusetts. F
ormer Commissioner of the Department of Telecommunications and Cable (DTC), Sharon E. Gillett, and EOHED Assistant Secretary Stanley McGee have been the workhorses moving the broadband agenda ahead. Attorney McGee serves as Chairman of the MBI's governing Board of Directors.

Ms. Gillett, who recently stepped down from serving as Patrick's first DTC Commissioner, previously chaired the Broadband Working Group at the Communications Future's Program (CFP) of the Massachusetts Institute of Technology (MIT). While at CFP Gillett authored a series of research studies demonstrating the economic developmental benefits of telecom competition and broadband deployment.

Commissioner Gillett, along with California Public Utilities Commission Chairperson (and former FCC Commissioner) Rachelle Chong, has been a leader in the nationwide effort by state utility regulators to assert the role of states in approving and selecting broadband stimulus grants and loans in their respective jurisdictions.

The Broadband Institute is "housed" legally and physically within the Massachusetts Technology Collaborative (MTC), a quasi-public state economic development authority which also hosts the Massachusetts Renewable Energy Trust (MRET). MTC initially helped incubate Berkshire Connect, and its in-state sister organization, Pioneer Valley Connect. As a state authority, MTC has existing legal preemption rights in relation to local zoning regulations for public purposed projects. The Governor's recently filed legislation clarifies and reasserts MBI's collateral authority.

MBI advertised the position of its Executive Director in October of last year. Spokesperson Jones today told that the position will be filled "in about 10 days from now."

State Rights-of-Way Provisions
The bill filed last week also seeks to allow the Massachusetts Highway Division (MassHighway) to transfer real property to the MBI for up to 25 years. Under the same Section 4 of the bill, the real property transferred to MBI "may be subsequently transferred, leased or licensed" by the broadband program to "public entities or non-profit or for-profit private sector entities". Rules for the implementation of any such transfers are to be issued by the Inspector General of Massachusetts, a government watchdog who is appointed jointly by the state's Governor, Auditor, and Attorney General.

If passed into law, this provision will allow underground conduit duct banks in state owned highway public rights-of-way (ROW) to be used by MBI for the installation of new fiber optic telecom networks.

Of particular interest to MBI are the conduit banks now being constructed in state highway ROW adjacent to Interstate Routes I-91 and I-291, from the Connecticut border northerly to the Vermont border. This 63 mile project bisects the 4 counties of Western Massachusetts. The infrastructure was designed both as a federal-state Intelligent Transportation System (ITS), and as a pathway for long haul and "middle mile" fiber optic systems routed into splice points in undeserved towns.

The majority of the project will be constructed in the Massachusetts First Congressional District, of Congressman John W. Olver (D-MA). As the only member of the Massachusetts delegation currently sitting on the powerful House Appropriations Committee, Olver was able to secure the $30.7 million in funding for the project in via several earmarks. The appropriations were drawn from funds under the Federal Highway Administration's (FHWA) Intelligent Transportation System (ITS) program. The I-91 project was one of only three such federal efforts examined in the FHWA's Rural Interstate Corridor Communications Study Report to Congress (download .PDF) in August of 2007. The project is now being managed by Adesta LLC of Omaha, NE, under contract with MassHighway.

Less clear is the impact the filed legislation would have on the conduit capacity, and both dark and lit optical fiber, in the ROW of the Massachusetts Turnpike Authority (MassPike). In the telecom boom era of 1998-2001 high capacity backbone carriers Level 3 Communications (NASDAQ: LVLT) and the former Williams Communications (acquired by LVLT, 2005) constructed fiber duct banks along the 130 mile length of the MassPike from Boston to the New York border. MassPike negotiated fiber use agreements for non-commercial state communication purposes with the carriers at the time of construction. This contractual language, and the fact that MassPike remains, despite the transportation consolidation efforts of Patrick, another quasi-public state authority means that MBI use of "free" MassPike fiber is not going to occur anytime soon.

Massachusetts as Model State Broadband Program
Our takeaway: Under the leadership of a governor who chose to carry through on the political and economic developmental promise of ubiquitous broadband, Massachusetts has developed one of the very few truly model state broadband programs in the nation.

If Ms. Gillett and Mr. McGee continue to be empowered by Deval Patrick to deliver on that promise, Massachusetts will remain extremely well positioned for the federal competitive funding rounds. The Obama Administration will continue to listen to the Patrick Administration. The states will have more than the mere 'consultative' role referenced in ARRA largely because of that particular communications channel.

Massachusetts joins California, New York, North Carolina, and Vermont in having set the standard for the other states to meet in terms of state-level broadband programs.

Governor Patrick is right, the feds are paying attention. The first movers will be rewarded.

Wisconsin Officials Worry State Broadband Mapping Lag Could Jeopardize Federal Stimulus Funding 04/28/09 Boston -Wisconsin officials are expressing concern that their customer driven state broadband mapping effort may receive too few responses to accurately target broadband stimulus funds in the state. The worry is that without completed mapping, the Badger State will fall behind other states in the competitive rush to secure broadband grants, loans, and loan guarantees from the $7.2 billion in broadband funds from the American Recovery and Renewal Act of 2009 (ARRA).
A copyrighted story in yesterday's Wisconsin State Journal (Madison), states that 3,900 citizen survey responses have been received by the state Public Service Commission (PSC) up through April 16. While the program will remain open for responses into the summer months, the concern is that not enough responses will be received to plot accurate maps for broadband unserved areas.

While the otherwise mere technical issue of broadband mapping has stirred controversy nationally, most prominently in the critique of Connected Nation's mapping strategy by a collaborative of public interest groups, it has rarely been cast in such a problematic light as we may be witnessing in Wisconsin. What other strategies should the state PSC deploy immediately to remain competitive in the first funding round slated to kick-off with the NTIA's NOFA release by early July? Conversely, is Wisconsin voicing concerns about a necessary perquisite for any successful state broadband program that many states have not yet begun to consider?

We believe that a maximum of 20 states have effective broadband programs up and operating today. Not all of those jurisdictions have completed or even started a mapping effort. As Public Knowledge's Art Brodsky has declaimed, rather famously in these policy circles, broadband mapping has become The Great Distraction. We agree the imbroglio over mapping is distracting. We also know mapping remains necessary. Those of us that build networks, especially large carrier-grade networks, start with maps. Demand is mapped. Fiber is mapped. Competitor facilities are mapped. Everything is mapped. Rational choices and costing can't be produced without maps.

We believe that states need to share mapping best practices immediately. State regulators must order the carriers to produce public records of where they have deployed backbone, 'middle mile,' and access broadband networks. With that data in-hand the actual mapping is simple. We need to stop the distraction, and get on with building networks into unserved areas.

Wisconsin Governor Jim Doyle, like fellow Democrat, Massachusetts Governor Deval Patrick, was an early Obama supporter, and a leader within the National Governor's Association who worked closely with the Obama Administration to secure state priorities in the ARRA. It would be a horrible irony if Wisconsin's mapping challenges prevent Doyle's Administration from delivering on the economic developmental potential of broadband in his very rural state.

If Wisconsin is not competitive in its quest for ARRA broadband monies, it would also certainly be a point of frustration for two of its leading elected officials, Senator Russ Feingold, and Congressman Dave Obey. As we previously reported, Sen. Feingold has been a leading voice in the US Senate for expedited funding for broadband projects in rural areas, like those of his state. Congressman Obey, from the state's rural northwestern 7th congressional district, is the Chairman of the House Appropriations Committee. Given that Appropriations originates all spending bills in Congress, Obey's name is the listed lead sponsor of the ARRA itself.

USDA Rural Development Telecommunications Program Accepts CommScope's Fiber-to-the-Home Product 04/28/08 - CommScope (NYSE: CTV), the Hickory, NC based telecom equipment and cable manufacturer, announced yesterday that its fiber-to-the-home (FTTH) product has been approved by the US Department of Agriculture’s Rural Development Telecommunications Program.

This acceptance by the Program of the company's branded BrightPath® FTTH product line allows "service providers seeking funding from the Rural Utilities Service to propose the use of BrightPath products in business plans and applications they submit for RUS grants and loans," stated the company in a press release.

The release continues:

" The simple, effective BrightPath FTTH system from CommScope, a world leader in high-performance broadband infrastructure, works seamlessly with existing hybrid fiber coax (HFC) networks, employing a unique, tapped architecture that provides fiber connection from the head end/central office to the subscriber’s premises.

BrightPath provides all the benefits of a FTTH network without requiring changes to back-office, head end/central office or customer premises equipment. BrightPath is particularly effective in low-density housing and rural areas because of the low signal loss of optical fiber and the reduction or elimination of active devices in the network. In rural deployments, BrightPath can provide a competitive advantage with typically lower upfront costs and maintenance relative to traditional HFC networks.

“Acceptance of BrightPath by the Rural Development Telecommunications Program greatly benefits our customers,” said Carl Meyerhoefer, vice president of Marketing and Business Development for CommScope’s Broadband division. “Rural service providers now have an economical choice for an FTTH platform with which they can connect customers to high speed services, while at the same time supporting the broadband stimulus program.”

Monday, April 27, 2009

NTIA Release Date for Broadband Stimulus Grant Notice Is Still Fluid 04/27/09 A specific date for the release, by the National Telecommunications and Information Administration (NTIA), of the agency's Notice of Availability of Funds (NOFA) which will give specific guidelines for the first grant round of 'broadband stimulus' monies remains a fluid target date. Rumors had circulated late last week on various Twitter outlets stating specific dates in late June for release of the NOFA.

NTIA Spokesperson Mark Tolbert this afternoon stated in an e-mail to, "A date has not yet been etched in stone for the release of the Notice of Funds Availability. As mentioned earlier, it is likely to be released within the next couple months, early this summer."

We had previously reported Mr. Tolbert's statements relative to the pending NOFA release date in a posting of April 13. That was the closing date for public comments filed with NTIA relative to the agency's administration of the $4.7 billion in funds to be dispersed via grants from its Broadband Technology Opportunity Program (BTOP). Mr. Tolbert at that time had set a 'target date' of 60 days out from the April 13 comment closing. In doing so he had given slightly greater specificity for a NOFA release date than had NTIA Senior Advisor Mark Seifert the previous week in Congressional testimony. On April 2, Mr. Seifert had testified to the House Subcommittee on Communications, Technology and the Internet that the NOFA would be issued in "a couple of months."

The funds to be administered by NTIA are part of the total of $7.2 billion in broadband stimulus appropriations from the American Recovery and Renewal Act of 2009 (ARRA). The balance of the funds will be dispersed by the Rural Utilities Service (RUS) of the United States Department of Agriculture (USDA).

We believe that the Obama Administration is working quickly to promulgate criteria for grant review, to set priorities for broadband programs in both "underserved" and "unserved" regions of the country as such terms are specified in ARRA, and to align federal purposes established in the Act with state broadband initiatives. We will not be surprised if the '60 day' estimated figure takes us into early July, given the complexity of the policy and technical issues at stake. The rumors and speculation about the pending NOFA speak to the high level of interest that the broadband stimulus provisions of ARRA have created in both US telecom industry and in rural economic development constituencies.

Tuesday, April 21, 2009

NC Democrats Push Anti-Municipal Broadband Legislation, Threatening to Derail Federal Stimulus Money 04/21/09 (Editor's Note: The following copyrighted story by Dan V. Smith of Durham, NC, is reproduced with the permission of its author. The piece was carried in today's editions of the Democratic-oriented online services BlueNC and Daily Kos. Mr. Smith's detailed reporting on legislation in the Tar Heel State that seeks to forbid the construction and operation of broadband networks by municipal utilities in that jurisdiction is one of the most detailed outlines of the initiative, and of the organizing against it, we have seen. We believe there is a current uptick in the number of these "anti-muni net" bills around the country. We will continue to report on this trend.)

As reported by the Independent Weekly, Representative Ty Harrell (D-Wake) and State Senator David W. Hoyle (D-Gaston) have penned SB1004 (and it's House counterpart, HB1252), known as the "Level Playing Field/Cities/Service Providers" bill. Contrary to its name, the bill seeks to prevent municipal governments from installing high-speed broadband or wireless internet service and acting as an ISP, even if commercial ISPs have no plans to offer service to their communities.

Close on the heels of Time Warner Cable's announcement that it would begin testing "tiered bandwidth" caps in Greensboro, and the announcement of Salisbury's plan to follow in Wilson's footsteps and provide fiber to the home for its residents (promising symmetrical speeds of up to 100Mbps), these bills not only threaten the possibility that North Carolina will finally claw its way above the national average in residential broadband access, and do so in an affordable manner, it also threatens North Carolina's access to the $4.7 billion the National Telecommunications and Information Administration (NTIA) has set aside from the $787 billion stimulus package to bring broadband to underserved and un-served communities.

Read on for legislative contact information and learn why North Carolina isn't likely to receive fiber internet any time soon...

Current Status and Legislative Contacts

HB1252 is expected to be considered by the Committee on Science and Technology tomorrow (apparently, despite numerous complaints, Harrell was pushing to have it voted on on April 15, but ran out of time). If the Committee on Science and Technology, which Harrell chairs, approves the bill, it will then be sent to the Commission on Public Utilities, chaired by Lorene Coates (D-Rowan), and then, Finance, chaired by Paul Luebke (D-Durham).

SB1004 is waiting to be considered by the Senate Committee On Commerce, chaired by Sen. Floyd McKissick (D-Durham).

If you oppose this bill, and there's plenty of reasons to oppose, just as there were plenty of reasons that the previous attempt, the "The Local Government Fair Competition Act" failed in 2007, contact the bills' sponsors:

The sponsors of House Bill 1252

Ty Harrell (D-Wake) | (919) 733-5602 |

Earl Jones (D-Guilford) | (919) 733-5825 |

Marilyn Avila (R-Wake) | (919) 733-5530 |

Thom Tillis (R-Mecklenberg) | (919) 733-5828 |

The sponsors of Senate Bill 1004

David Hoyle (D-Gaston) | (919) 733-5734 |

Debbie Clary (R-Cleveland/Rutherford) | (919) 715-3038 |

ILECs and LATAs and RBOCs, Oh My!: Why NC is Screwed When it Comes to Telecom Coverage

Most people would look at North Carolina and think it was a prime candidate for a rollout of one of the leading high-speed internet packages, such as FIOS or U-Verse, considering that it is the 10th largest state population in the U.S., home to a number of major banking and telecommunications companies, the site of three major research universities, the hosts what is widely considered to be the east coast's Silicon Valley.

Unfortunately, if you think that way, you're looking at the Old North State from the standpoint of a rational human being. The Telcos see it far differently.


The Regional Bell Operating Companies were the result of the U.S. DoJ's anti-trust suit against AT&T. Commonly called "Baby Bells," the RBOCs were split regionally in an effort to prevent monopolies and increase investment in telecommunications technologies. North Carolina was served by BellSouth and independent regional carrier GTE, which was roughly the size of an RBOC, but was not limited by geographic boundaries like the units spun-off from AT&T.

Following the Telecommunications Act of 1996, which substantially erased the lines between the RBOCs and the long-distance carriers, the larger RBOCs began gobbling up the smaller RBOCs and independent regional carriers, creating circumstances wherein what were formerly local, competitive markets became fragmented segments of national markets.


Incumbent Local Exchange Carriers are essentially what's left of the RBOC -- they're the telecom companies that, prior to the 1996 Telecommunications Act, held local monopolies. Competitive Local Exchange Carriers, on the other hand, are the smaller, more agile telecom carriers, that, for the most part have been bought-up as soon as they pose a financial threat to the ILECs. North Carolina has three major ILECs: Verizon, AT&T and Embarq and none of them are interested in providing substantial service outside of their main ILEC boundaries.


Local access and transport areas are the geographic regions in which former RBOCs and ILECs own the physical exchanges and network infrastructure. LATAs are the reason that calling a physically local number within the same area code (such as Durham to Raleigh) might incur long-distance charges, but further distant numbers within separate area codes (Durham to Roxboro) does not. As a result, wireline providers are able to license their high-speed backbones to their competitors at prohibitively expensive rates, discouraging competition.

Further confusing the issue is that LATAs are not defined by state, county or even city boundaries and a single city may have multiple LATAs owned by multiple providers. DSL providers are not permitted to provide broadband service that crosses LATA boundaries, even if the adjacent LATA is also owned by the same company, so while your residence might be only 1,000 yards from the geographically-closest CO, the closest CO in your LATA may be more than 6,000 yards, making it effectively too far away for DSL.

And the LATAs, themselves, are often divided by the ILECs. LATA 426, technically the "Raleigh" LATA, encompasses the Research Triangle Region, and has five different ILECs/CLECs providing service to various locations. None of these companies, particularly BellSouth (AT&T) and Verizon, have any incentive to improve the quality of their data services in these municipalities, because the customer base is so balkanized that the costs of infrastructure improvements outweigh any potential profits.

LATA 426 is North Carolina in a microcosm. Divided between Verizon, AT&T and Embarq, as well as a host of small, regional and local players, the rules as they exist, discourage the telecom industry from serving the residents and businesses of North Carolina with the latest in high-speed broadband, if they provide any service at all. (Click here to see just how segmented North Carolina's telecommunications infrastructure is.)

If the telecom industry manages to ram HB1252 and SB1004 through the state legislature, it will only get worse.

Save NC Broadband

As best summed up by Brian Bowman, the Public Affairs Manager for the City of Wilson, NC, on the Save North Carolina Broadband blog:

If the cable/phone companies really want a level playing field, they’d open their books just like we do in the spirit of open meetings and open records law. They don’t want a level playing field. They want to be the only team on the field.

Bottom line, these companies are using your state lawmakers to protect monopolies. It was wrong in 2007 when a similar bill died in the house and it’s wrong today.

One last note, Wilson tax money does not fund Greenlight. It is self-supporting through subscription fees.


Cross-posted at DailyKos (link)

Digg it (link)

This article is © Dan V. Smith 2009, and used by with the permission of the copyright holder. This story and headline first ran on BlueNC.

$13.4 million in 2009 Community Connect Program at RUS 04/21/09 Boston - The Rural Utilities Service (RUS) of the US Department of Agriculture this morning posted on its website a copy of its Notice of Funds Availability and Solicitation of Applications (NOFA), which the agency published in the Federal Register with yesterday's date.

The deadline for applications for this year is June 19, 2009.

The NOFA states that the RUS Community Connect program for 2009 will administer $13.4 million in available grants during calendar year 2009.

This budgeted figure is $2.2 million less than the $15.6 million in grants let by the agency during 2008, and considerably less that the "$20 million to $25 million" "in annual appropriations to the USDA for the program" which we had erroneously estimated, based on incorrect data quoted to us, in our posting of yesterday.

Repeated Note: The annual appropriations and programmatic guidelines for the Community Connect Program are distinct from the $2.5 billion in appropriations and guidelines yet to be issued for the RUS portion of the "broadband stimulus" funds contained in the American Recovery and Reinvestment Act of 2009 (ARRA). The Notice of Funds Availability (NOFA) for the ARRA derived RUS program is expected to be released on or about June 12, 2009 as previously reported by here.

The June 12 target date for the ARRA derived NOFA is expected to be a joint issuance with the National Telecommunications and Information Administration (NTIA), as the rulemaking proceeding has been jointly conducted by both agencies to date.

RUS Community Connect Program, with 2009 Application Forms

NOFA published in Federal Register of 04/20/09

Community Connect Grant Award Summaries (2005 - 2008)

Monday, April 20, 2009

Breaking News: RUS To Post 2009 Funds Notice for Community Connect Grant Program 04/20/09 The Community Connect Program of the Rural Utilities Service (RUS), division of the US Department of Agriculture (USDA), will post its Notice stating available funds for the Program's 2009 grant cycle within the next 12 to 18 hours.

The Notice will state the grant application deadline date for 2009 applications is June 19, 2009.

The Program within RUS funds telecommunications networks in designated rural and underserved areas of the domestic United States, with grants, loans, and loan guarantees.

The Community Connect Program is funded with annual federal appropriations for the USDA in the range of $20 million to $25 million. The Program is strongly supported by Members of Congress from rural states who routinely work to include the programmatic funding in each federal funding cycle's Farm Bill. The RUS previously announced that "25 communities in 16 states" received a total of "$15.6 million in broadband community connect grants" in the 2008 funding round.

Sources within the USDA have told that the funds Notice will be posted either this evening, April 20, or Tuesday morning, April 21, Washington time (EDT).

Deadlines for grant, loan, and loan guarantee applications, and other terms and conditions of the Program, will be posted on the website of the "Rural Development Community Connect Grant Program," at:

Note: The annual appropriations and programmatic guidelines for the Community Connect Program are distinct from the $2.5 billion in appropriations and guidelines yet to be issued for the RUS portion of the "broadband stimulus" funds contained in the American Recovery and Reinvestment Act of 2009 (ARRA). The Notice of Funds Availability (NOFA) for the ARRA-derived RUS program is expected to be released on or about June 12, 2009 as previously reported by here.

The June 12 target date for the NOFA is expected to be a joint issuance with the National Telecommunications and Information Administration (NTIA), as the rulemaking proceeding has been jointly conducted by both agencies to date.

Sunday, April 19, 2009

The Stimulus "Buy American" Debate, Cisco, and Fair Trade 04/19/09 Boston - Our comments on the reported lobbying effort by Cisco Systems, Inc. (NASDAQ: CSCO) to clarify the "Buy American" provisions of the ARRA have sparked argument and counter-argument over on NetworkWorld's Brad Resse on Cisco blog.

We made the point in our post here that love it or hate it, virtually no broadband network built in the US can be deployed using 100% "domestic content". If we therefore believe in ARRA's goal of quickly deployed new broadband nets by 4Q 2010, then we can't support a strict interpretation of the Act's "Buy American" clause.

As seen in the clear language of the clause itself -- a provision meant to apply to roads, bridges, and other "public works" -- Congress did not explicitly mean for it to be applied to the information technology (IT) sector. In our previous post we also made the point that the total of all IT-related appropriations in ARRA is correctly estimated at approximately $100 billion, not the "mere" $7.2 billion in the broadband stimulus section. Do we really want to hold back spending in the entire IT sector while we fight about US trade policy?

Most microelectronics, generally the most valuable components of any electronic array, are not fabricated in the US any longer. We believe that ubiquitous broadband -- high capacity telecom networks that are truly accessible and available throughout all areas of our country, and to all of our citizens -- is a critically important goal
for American society.

Truly ubiquitous broadband is a driver of economic growth, an enabler of better healthcare, a vital part of a strong educational system from advanced research to K-12 learning, and a key component of our critical infrastructure supporting homeland security and public safety communications. Smart grids are needed components of a new sustainable energy future for America. The funding in ARRA for the construction of smart grid networks presents us with great synergies, and huge business opportunities, for combined broadband / smart grid deployments. To quote FCC Charmain Michael Copps, ubiquitous broadband is the "cross cutting" enabler of all these highly beneficial applications.

As we responded to Brad Reese: Yes, of course we want to bring as many jobs back onshore as possible. We have always supported folks like John Kerry and Barack Obama that are serious about changing the federal tax code so that incentives for the offshoring of jobs are removed. Let's move ahead as a nation to truly reach fair trade agreements with our trading partners. Markets around the world are still not fully open to American high technology manufacturers and service providers -- as we well know from our own work in ASEAN countries.
Let's let our trading partners know that reciprocity means just that.

As we work to reform "free trade" policies to make them truly "fair trade" policies however, let's not let the our national broadband agenda be delayed any longer.

Saturday, April 18, 2009

British Government Announces Broadband Plan, Catches Up with the Colonies 04/18/09 British Prime Minister Gordon Brown yesterday announced that his Labour Government will quickly file a new national broadband plan aimed at delivering universal broadband access to all citizens (or is that subjects?) in the UK.

A published report in the Guardian suggests that Labour's broadband plan will be included in legislation to be filed in Parliament calling for "sweeping changes to the regulatory regime for television, radio and regional newspaper companies, allowing them to merge to meet the challenges of the internet and other digital technologies."

The broadband aspects of the Government's planning, are in the charge of Labour communications minister, Lord Carter, who will release a report in July suggesting how "universal broadband access" will be reached. Clearly the British plan differs from the Obama Administration's broadband agenda in the US in that Brown's Government is simultaneously addressing media cross-ownership, and digital intellectual property rights.

Further demonstrating the distinctions between British and American politics, UK tech blogger Zedian reports that "...UK opposition leader David Cameron waded into the debate pledging a "fiber to the home" (FTTH) programme within a decade if the Conservatives get into power...".

As Brown and his ministers work to release the plan this year, broadband policy in the Mother Country is playing catch up with that of at least three of its Commonwealth Nations. As Ovum's David Kennedy reported from Sydney here earlier this week, Australia, New Zealand, and Singapore are all fully engaged in developing quasi-state supported next generation networks, each of which will include FTTx access networks. Lightwave's Steven Hardy posted drill-down details on a blog post of April 8 entitled "More info on Australia's NBN".

How should American policy makers look at the emerging British model, or that of other developed nations rolling out national broadband networks (NBNs)? We see the impact on American thinking as twofold, albeit both somewhat speculative:

1. To the extent that many of the developed nations are moving toward NBN frameworks, each having some degree of state subsidies, mandated high capacity bandwidth requirements, and universal access for all, there will be less chance that the US will return to a strictly private sector and fully deregulated model. As NBNs come to be seen as prerequisites of global competitiveness, the American 'private sector only' model will be morphed into a public / private national broadband model.

2. Secondly, two definitional characteristics of the NBNs reported on by David Kennedy are that they are built around "wholesale" business models, and full FTTx deployments. As NBNs become more of the norm in the economies of our global trading partners, an American approach to "open access" across both the backbone and fiber-rich access portions of the network will emerge.

Friday, April 17, 2009

Recommendations for RUS Broadband Stimulus Programs 04/17/09 (Editor's Note: With this posting, we welcome our colleague Liz Zucco. Liz has deep experience in successfully writing and winning grants and loans for rural carriers, community organizations, and healthcare providers. We welcome her invaluable expertise in the complex realm of federal grantsmanship, program management, and rural broadband. Liz knew rural broadband before rural broadband was cool.)

The Rural Utilities Service (RUS) loan program within the US Department of Agriculture (USDA) has been invaluable in moving funding for rural broadband initiatives out into the field. However, when we examine the loan program and the Community Connect Grant program together, we see that there remain gaps in the methods and availability of funds for rural access. Even with the positive terms of federally backed loans, many times there is just not enough market potential to warrant a loan to serve a particular rural market.

While the Community Connect program provides grants, we believe the program suffers from limitations such as the inability to group together multiple townships to provide for management and operation of a larger system. Such systems scale better and tend to be more sustainable.

With the new $2.5 billion funding soon to be made available for RUS from the American Recovery and Renewal Act of 2009 (ARRA), RUS now has an important opportunity to better leverage its funds via some simple program reforms.

We would like to propose that the RUS consider making the following changes in its grant and loan strategies in order to fulfill the goal of access for all Americans.

1. Provide a loan/grant combination for RUS borrowers to assist them in leveraging their operational costs when they are willing to take the risk of a loan. This will give these good borrowers the chance to extend their footprint with assistance for capital costs, and repay monies borrowed to continue the RUS’ ability to make loans. This is a fair solution, as operators are in many cases struggling to get into the leaner and less populated areas. In many cases operators are forced to drop markets altogether due to the inability to justify capital costs. Yet these same borrowers could support their operational costs if given the opportunity to build into these areas with assistance in the form of a grant.

2. Allow the Community Connect program to encompass more than “one incorporated area”. This would allow entire counties to develop unified broadband initiatives, thus improving operational sustainability and better leveraging the costs of running networks in extremely rural markets. Many towns and hamlets are only but a few thousand people. By combining five or six small towns into one consolidated service area, the costs to build and maintain networks are apportioned over a larger revenue base. The rural service provider thus increases its chances of sustaining the network in a previously unserved region.

Thursday, April 16, 2009

Rural Utilities Service (RUS) at USDA: Failing Report 04/16/09 Boston - There is a good summary story carried in today's issue of reviewing the recent regional Inspector General's report on the Rural Utilities Service (RUS) division of the US Department of Agriculture. 

ProPublica's Michael Grabell did a deeper review in a story on Monday. As many close observers of RUS, and several Members of Congress have complained for years, many of the grants and loans expended by RUS in recent years for "rural broadband" have gone to build new networks in non-rural suburban areas.

To the distress of incumbent carriers, a sizable percentage of this programmatic spending has gone to deploy "overbuild" networks -- systems built in areas already served by one or more commercial carriers, and thus most probably not "underserved".

While much attention has recently focused on RUS, several Members of Congress from rural states worked to correct the "suburban" network deployment record of the agency in the Farm Bills of the past several years. In a message to constituents about the 2008 Farm Bill, Senator Russ Feingold (D-WI) highlighted his efforts to reform the 'suburbanization' of RUS: "Rural Broadband: Building on provisions in Russ's Rural Opportunities Act, the Farm Bill clearly defined "rural" so that broadband programs and funds targeted for rural communities in Wisconsin stay in rural areas and are not used for various suburban developments."

Our analysis: The Notice of Funds Availability (NOFA) which will issue on or about June 12 and which will describe the criteria for grant, loan, and loan guarantees for the $2.5 billion in ARRA appropriations to be administered by RUS will seek to correct the non-rural / suburban spending pattern by the agency. These regulatory changes will certainly be made in the wake of the recently highly publicized reports that have highlighted this past history during the Bush Administration.

Politically, the coalition of rural Senators that has already signaled to the Obama Administration that rural broadband spending must be the priority for ARRA broadband funds, will demand such reform.

Importantly, current FCC Commissioner Jonathan S. Adelstein, President Obama's nominee to be the new head of RUS has a long public service record of advocating for the specialized telecom needs of rural communities.

As Administrator, Adelstein will drive the reform agenda at RUS. His lateral move to RUS is urgently needed for the successful ramp-up of ARRA. In order to maintain a legal quorum at the FCC however, his Democratic successor at the Commission must be nominated, approved, and seated before the move can occur.

The $100 Billion Issue: Cisco Lobbies to Clarify "Buy American" Clause in Federal Stimulus Package 04/16/09 Boston - As seen in a publicly disclosed e-mail message from Cisco Systems, Inc. (NASDAQ: CSCO) to the National Telecommunications and Information Administration (NTIA), the San Jose based networking equipment market leader is lobbying against a strict interpretation of the "Buy American" provisions of the American Recovery and Reinvestment Act of 2009 (ARRA).

We believe the Cisco statement to the federal agency is extremely significant. Far more than the $7.2 billion in "broadband stimulus" funds in ARRA could be subject to the Buy American clause.
We believe that upwards of $100 billion in information technology (IT) appropriations are contained in all of the tech-related programs and funding lines in the Act. 

As outlined below, we believe that strict application of ARRA provisions meant to apply to roads, bridges, and public buildings can not reasonably be applied to the IT / telecom sector if appropriations from the Act are going to be spent on technology deployments, as intended.

Our analysis of IT funding portions of the Act agrees with that of several legal and market research analysts who have done detailed reviews of the legislation. We believe the approximate $100 Billion IT figure is reached when considering total appropriations, additional to the $7.2 billion, for: healthcare record computerization, smart grid electric distribution control technology, federal computer system upgrades, public safety communications, intelligent transportation system (ITS) tech within the massive funding for road and bridge construction, computer learning and educational technology, and possible broadband rewiring of subsidized and public housing.

e-mail message, reproduced on the NTIA's public disclosure site reports that Cisco's Jeffrey A. Campbell had an Ex Parte telephonic discussion with NTIA Senior Advisor Mark Seifert on March 23, 2009 to lobby NTIA against strict interpretation and enforcement of the Buy American language contained in Section 1605 of the Act (Section below, full ARRA text in .PDF, here).

Mr. Campbell, based in Cisco's Washington office, is the firm's Senior Director for Technology and Trade Policy, within the corporate Global Policy and Government Affairs division. As stated in his e-mail, he specifically sought clarification from NTIA that any network facilities built with BTOP funds not be "...constituted a "public work" which would subject them to the "Buy American" requirement." Alternatively, Campbell sought "a public interest waiver of the "Buy American" requirement...for all electronics equipment used in broadband networks."

The report by the retained lobbyist who initiated the telephone discussion, and its public disclosure, are both mandated by the Obama Administration's new disclosure rules for lobbyists seeking to influence any federal agencies relative to grant or loan expenditures from the ARRA. President Obama issued a Memorandum on March 20 which contained the strictures. As reported by the government watchdog group The Sunlight Foundation, the disclosure regulations set off a firestorm of concern on K Street when they were promulgated.

Our analysis
: 1. To date we have only seen published stories on the Cisco meeting in Brad Reese's column on Cisco in Network World, and on Democratic Underground. Cisco itself has not commented yet, although its government affairs site routinely stakes out free trade positions, as is common in the high tech sector. We believe the Cisco argument will receive far greater review and feedback from not only other electronics manufacturers, but from the telecom carriers that purchase their products, and from the bevy of trade associations representing the American high technology industry in Washington. Cisco itself has been instrumental in supporting the work of as many as 32 technology trade groups, including TechNet, in addition to its own robust lobbying presence.

2. The reality is that many components of any microelectronic array, and most semiconductors found in virtually any networking equipment, are fabricated abroad. Virtually no telecom network operating today in the United States, supporting either a public service provider or an enterprise, could function without the existence of global supply chains feeding into the final hardware product. We hope that review of the Act's Sec. 1605 by NTIA will reasonably look at the realities of global manufacturing and trade in the telecom sector, as do current domestic content regulations of the USDA's Rural Utilities Service.

3. Cisco and its supported high tech trade groups, like TechNet (the folks that lobbied for a 100 Mpbs national broadband goal back in 2002), have been in the forefront of pushing for a progressive national broadband policy for years. Cisco understands the equation of greater broadband deployment equals greater economic activity and higher employment levels in the American economy. Cisco's push for clarification of the "Buy American" provision is a reasonable and an ultimately practical request. The goal of an effective national broadband strategy is within reach, in large measure thanks politically and technically to Cisco.

The Buy American language of ARRA is found under Section 1605 of the Act:


GOODS. (a) None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public
work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States.

(b) Subsection (a) shall not apply in any case or category of cases in which the head of the Federal department or agency involved finds that—

(1) applying subsection (a) would be inconsistent with the public interest;

(2) iron, steel, and the relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or

(3) inclusion of iron, steel, and manufactured goods produced in the United States will increase the cost of the overall project by more than 25 percent.

(c) If the head of a Federal department or agency determines that it is necessary to waive the application of subsection (a) based on a finding under subsection (b), the head of the department
or agency shall publish in the Federal Register a detailed written justification as to why the provision is being waived.

(d) This section shall be applied in a manner consistent with United States obligations under international agreements.

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