Tuesday, January 26, 2010

Breaking News: Large Middle Mile Project in Massachusetts Rejected by U.S. Dept. Commerce - NTIA

Round I Rejection of $ 100 Million Project Is First for Large State Middle Mile Proposal, Demonstrates Merit and Fiscal Based Criteria of NTIA Rather Than Straight Political Influence 01-26-2010 San Francisco -
One of the largest proposed state supported middle mile broadband stimulus projects in the nation, that of the Massachusetts Broadband Institute (MBI), targeted at the underserved areas of rural Western Massachusetts, has been rejected by the U.S. Department of Commerce for funding Round I of the federal broadband stimulus program.

Massachusetts Governor Deval Patrick (D-MA) announced that his Administration applied to the National Telecommunications and Information Administration (NTIA) arm of the Commerce Department for the $100 million project in August of 2009.

As we see it, the news is significant for 3 primary reasons:

1. The MBI middle mile project, is 1 of a handful of the large such state supported projects applied for in funding Round I of the federal broadband stimulus program, each in the range of $100 million in total requested funding.

The rejection indicates 1 or both of 2 factors are at play: The $100 million price tag may be too rich for the NTIA's overall programmatic budget. Just as likely, the Massachusetts middle mile application had several flaws in it. We think included in the latter was too aggressive a strategy of 'overbuilding' existing telecom networks in place, and not demonstrating sustainable revenues going forward from last mile network operators committed to using the middle mile fiber for intra- and inter-region transport.

2. Governor Patrick (left, with Congressman John Olver (D-MA-1) and former MBI Director Sharon E. Gillett), one of the nation's Democratic governors most closely aligned politically with President Barrack Obama, has made broadband deployment in Western Massachusetts a cornerstone of his in-state economic developmental program for the Bay State's most rural area. Virtually all of the in-region economic development agencies supported the plan.

NTIA's rejection indicates the high threshold for middle mile projects even when universal support of such projects, as infrastructure based drivers of economic development, is expressed in funding applications by economic developers.

3. The Western Massachusetts project has had the universal support of the entire array of Massachusetts-based Democratic elected and appointed federal officials now in key positions of power and policy influence relative to telecommunications issues in Washington.

As we have frequently reported in the past, included in this formidable array of officials focused on the current Democratic telecom policy agenda, are U.S. Senator John F. Kerry (D-MA), Congressman Edward J. Markey (D-MA-7); former MBI Director Sharon E. Gillett, who was appointed in late July as Chief of the Wireline Competition Bureau of the Federal Communications Commission (FCC); and Senator Kerry's brother, Cameron F. 'Cam' Kerry, the general counsel of the U.S. Department of Commerce.

The rejection of the project demonstrates that broadband stimulus awards issued by NTIA will not be controlled merely by political considerations or influence from the governing Democratic coalition now holding sway on both ends of Pennsylvania Avenue. Perhaps surprisingly to the harshest critics of the broadband stimulus program, merit is key in the highly competitive process. will continue to report on the details of the project, and on its rejection announced today by the Patrick Administration with further analysis and local reaction.

The following is a verbatim copy of the statement released at 1:52 PM (ET) time today by MBI (our links added):

"The Massachusetts Broadband Institute has been informed by the U.S. Department of Commerce that the applications of the Massachusetts Broadband Institute (MBI) and WesternMA Connect are no longer in the running for federal stimulus awards in Round 1 under the BTOP (Broadband Technology Opportunities Program).

While we are very disappointed by this development, we will work to ensure the Round 2 applications are ultimately approved. Our commitment to broadband connectivity is unwavering, and bringing this vital resource to the unserved and underserved regions of western Massachusetts remains one of our highest economic development priorities.

We recognize that it has been a challenge for the Rural Utilities Service (RUS) and the National Telecommunications and Information Administration to implement these new broadband stimulus programs under the Recovery Act quickly. The MBI put forward a strong application detailing opportunities for significant job creation, business growth and educational advancement. We are convinced the MBI made a credible and compelling case when scored against the NTIA’s own criteria. Our commitment to broadband expansion in western Massachusetts remains strong.

We are currently pulling fiber-optic cable along 55 miles of I-91, and this work will continue to serve as a critical component of our network in western Massachusetts. With state funds already available under Governor Patrick’s Broadband Act, we are working aggressively to determine how best to move forward in the absence of immediate federal stimulus funding for broadband. While we are unhappy about today’s news, we will make access to affordable, quality broadband a reality for the residents of western Massachusetts."
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