Friday, September 4, 2009

Broadband Stimulus Round I Applicants: North Carolina Seeks $28.1 for Middle Mile Network with Detailed Filing

400 Page Application Includes Public-Private Partnerships and Full Congressional Delegation Support for 600 Mile Fiber Expansion

(Editors' Note: We thank the the team in North Carolina that worked to assemble the state's middle mile application for granting access to electronic copies of portions of the filed application.) 09/04/09
- North Carolina Gov. Bev Perdue (D-NC) yesterday announced that the state applied for $28.1 million in broadband stimulus federal funding to support the expansion, with 600 route miles of new optical fiber network, of the North Carolina Research and Education Network (NCREN).

"NCREN is of great importance to public education in North Carolina, serving over two million students across the state with vital broadband access," said Gov. Perdue.

"This proposal allows North Carolina to leverage the existing NCREN to create more robust access for our schools, libraries and public health facilities, while also reaching our underserved citizens," concluded the governor of the Tar Heel State.

The NCREN is a research and educational network (REN), similiar in purpose and design to other statewide nets operated by non-profit corporations, higher education consortia, and state quasi public authorities in other jurisdictions.

The application is part of a coordinated strategy to improve broadband access for businesses and residents in underserved areas, and enhance feasibility of Health Internet Technology (HIT) initiatives across the state, resulting in improved access to health services.

NCREN is owned and operated by MCNC, officially called the Microelectronic Center of North Carolina, the non-profit corporation chartered by, and initially funded by, the North Carolina General Assembly in 1980 to spur public-private high technology economic developmental ventures.

State Coordinates Multiple Agencies & Congressional Support
MCNC's application, submitted on Aug. 17, was coordinated through Governor Perdue's Office of Economic Recovery & Investment and endorsed by all 15 Members of the North Carolina congressional delegation. The state's broadband program, the e-NC Authority, further supported the application drafting process, with state broadband mapping and other services.

"The e-NC Authority assisted MCNC and many other groups in North Carolina who were applying (nonprofit, for profit and community networks) by helping them to determine unserved and underserved areas of the state," stated Ms. Jane Smith Patterson, Executive Director of e-NC Authority in a statement e-mailed to earlier today.

"A number of these potential applicants asked for our assistance," concluded director Patterson. As we reported in April of this year, the e-NC Authority, one of the oldest and most respected state broadband programs in the nation, faced potentially debilitating budget cuts just as the federal broadband stimulus program got underway.

North Carolina's 2 US Senators, Sen. Richard Burr (R-NC) and Sen. Kay Hagan (D-NC) and all of the state's 13 Members of Congress signed a letter of support for the application addressed to NTIA chief Lawrence E. Strickling.

The North Carolina delegation includes one of the most important Members of Congress having influence over
the funding and policy for rural broadband projects nationally. Rep. Mike McIntyre (D-NC) of the state's southeastern 7th congressional district (Lumberton, Fayetteville, Wilmington, Boliva) sits on the House Committee on Agriculture. Importantly, he chairs the Subcommittee on Rural Development, Biotechnology, Specialty Crops, and Foreign Agriculture. As we reported in July, Rep. McIntyre has already held the only congressional hearing focused on the portion of the federal broadband stimulus program administered by the Rural Development arm of the US Department of Agriculture.

In addition to the joint congressional letter, and the written endorsement of Governor Perdue, the application package included another 33 separate letters of support from academic, governmental, industry, and tribal leaders.

Joint BIP - BTOP Application
MCNC's application for ARRA funds was submitted to both to the U.S. Department of Commerce's National Telecommunications Information Administration (NTIA) Broadband Technology Opportunities Program (BTOP), and the U.S. Department of Agriculture's Broadband Initiatives Program (BIP) managed by the Rural Utilities Service (RUS) of the Department's Rural Development branch. The BTOP program requires a 20-percent funding match on the part of the applicant. MCNC raised the matching funds for its application through private sources, thus no state funds are required in the MCNC application.

Under joint rules of the BIP-BTOP programs, any application seeking both BIP and BTOP funding first must be vetted by the contracted reviewers of the Rural Development - RUS section, and then reviewed by the BTOP volunteer reviewers.

Governor Perdue as "The Driving Force"
Governor Perdue was elected North Carolina's first female governor on the same ballot of last November that returned North Carolina to the blue column for the first time since 1976, with President Obama's 0.4% plurality over John McCain. She became directly involved with educational technology and NCREN when she served as Lieutenant Governor (2001-2009). She championed state legislation and programs comprising the School Connectivity Initiative (SCI) which achieved the interconnection of virtually all K-12 and higher educational institutions in the state to the NCREN.

Her transition to the Obama era of broadband stimulus funding for integrated educational, healthcare, and rural underserved subsidized networks, as she became governor in January 2009 was swift.

"Governor Perdue has been both a longtime advocate of educational networks, and really the driving force that allowed us to put together such a good statewide application," said MCNC President & CEO, Joe Freddoso, a former Cisco executive and economic development official. Mr. Freddoso spoke with in a telephone interview this afternoon.

PalmettoNet is MCNC - NCREN Lead Partner
The investor owned PalmettoNet, headquartered in Columbia, South Carolina is the lead carrier / provider partner with NCREN in the application. PalmettoNET, a regional fiber network operator with facilities in Georgia, North Carolina, and South Carolina, has pledged $4 million in capital contributions to the overall venture. In turn, PalmettoNet, jointly owned by 13 local operating telephone companies and connected to 69 points-of-presence (POPs) in North Carolina provides fiber and engages in fiber swaps with NCREN in a mutually beneficial and interconnected networking strategy.

Last Mile Partners Endorse NCREN Application
According to MCNC, 5 investor-owned last mile providers endorsed the NCREN application to the 2 federal agencies, and submitted letters of support as part of the total 400 page filed application. The listed access network providers are: Spirit Telecom, ClearTalk Wireless, ERC Broadband and Balsam West FiberNET.

MCNC states that all the carriers expressed "interest in using the proposed middle-mile" facility "to reach underserved consumers." Spirit Telecom and PalmettoNet share some common operating telephone company ownership.

Balsam West FiberNET is partially owned by the Eastern Band of Cherokee Indians of North Carolina (EBCI), a federally recognized Native American tribe headquartered on the federal land trust known as the Qualla Boundary in Cherokee, NC.

Mr. Michell Hicks, Principal Chief of the EBCI stated in his recommendation letter for the project that "Your collaboration with Balsam West has the potential to drive social and economic benefits for residents of western North Carolina."

Proposed Network Reach and Multipurpose
If approved, MCNC plans to use the economic recovery funds to build a network of more than 600 miles of new middle-mile fiber, an essential element in North Carolina's plans to reach citizens and community anchor institutions (schools, community colleges, other institutions of higher education, and community support organizations) who currently have limited broadband access.

Underserved citizens will be reached by last mile investor-owned telecom and cable providers with whom MCNC has formed partnerships.

The middle-mile is the sector of the network that connects last-mile (access) facilities such as telecom company local interconnection points (central offices) with the commercial Internet and with national and global advanced research networks.

The proposed network has the potential to serve more than 1,500 anchor institutions, 180,000 businesses, and more than 300,000 underserved families. In addition, the MCNC application has been coordinated closely with other applications for federal economic recovery funds in North Carolina, including those in the areas of health care and education.

MCNC estimated in its application that the design, construction, and operation of the network will create more than 230 engineering/construction jobs.

About MCNC
MCNC is an independent, non-profit organization that employs advanced networking technologies and systems to continuously improve learning and collaboration throughout North Carolina's K-20 education community. MCNC provides advanced communications technologies and support services that enable access to 21st century learning applications and offers the opportunity to improve teaching, learning, research and collaboration among North Carolina's education community.

For almost a quarter century, the 501 3 non-profit organization, MCNC, has operated a robust, secure, exclusive communications network that has connected the institutions of the University of North Carolina System, Duke University and Wake Forest University to each other, and through advanced research networks such as Internet2 and National Lambda Rail, to the world.

About NCREN The North Carolina Research and Education Network (NCREN) is one of the nation's first statewide education and research networks. It provides broadband communications technology services and support to K-12 school districts, higher education campuses and academic research institutions across North Carolina.

MCNC offers the NCREN network, technology tools and services to guarantee equal access to 21st century learning by providing a future-proof technology network that is the foundation for change and innovation in our educational systems. It creates possibility and provides an equitable educational experience throughout the state.

Our Take: Governor Perdue, Joe Freddoso of MCNC, the Governor's Recovery office, and a host of North Carolina public employees have done their homework. Their effort would stand out, on its own merits, even if the politics and policy of broadband deployment and telecom competition in North Carolina this year had not focused a national spotlight on the Tar Heel state.

As the large carrier incumbents attempted earlier this year to wipe-out the legal ability of the public sector to construct and operate broadband networks to help rebuild the economy of the state, Governor Perdue and her team paid attention to the job in front of them. They wove together a coalition of private and public interests to support the expansion of the state's quasi public network. The 400 page application submitted on August 17 is testimony to their focus, and to their achievement in advancing the public interest.

We see North Carolina in the same league as Maine, Massachusetts, Maryland, Missouri, and New Mexico in terms of Round I of the broadband stim program. Each state, acting through either its broadband program, or legacy REN organization, has proposed extensive middle projects for funding to the federal agencies.

The challenge for each of these states, and for other state proposed middle mile projects, will come when some of the in-region incumbents push back during the 30 day window following September 15. Incumbents have the right, under the federal rules, to argue that proposed federally subsidized middle mile networks will be redundant of existing investor owned networks. Some of the states proposing middle mile nets have done better jobs than others in reducing their exposure to incumbent push back.

We have not been granted nearly the level of access to other state applications that the good folks in North Carolina have given us to date. We are however betting that North Carolina will experience push back from a particularly petulant crowd of incumbents. We suspect the state will prevail better than some others, thanks largely to diligence shown as that 400 page application was put together.
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