StimulatingBroadband.com 09/08/2010 San Francisco - Occam Networks®, Inc. (Nasdaq: OCNW) today announced it has been selected to provide access network equipment to a fourth customer awarded federal broadband stimulus funds.
In a company press release Occam said that Marquette-Adams Telephone Cooperative, has chosen the gear maker and its BLC 6000 multiservice access platform (MSAP) to extend its fiber network as part of the provider's funded broadband stimulus last mile project.
The Cooperative, headquartered in Oxford, WI was awarded $20 million in a last mile broadband stimulus grant ($13.8 million) / loan ($6.2 million) combination by the Rural Utilities Service (RUS) of the U.S. Department of Agriculture (USDA). The award was announced as part of a package of 66 projects across the nation released by President Obama on July 2 in the first group of awards in Round2 of the federal program.
Occam's BBstim Funding by the Numbers
Today's announcement marks the fourth time Occam has disclosed that it has become, in the words of company CEO Bob Howard-Anderson, a "designated vendor" for a service provider winning broadband stimulus funds. Howard-Anderson stated during the firm's 2Q 2010 conference call held July 27, "We are making good progress in being chosen as the access vendor of choice by awardees of government stimulus funds."
The CEO concluded his prepared remarks regarding the stimulus program saying, "So far we are the designated vendor of approximately $150 million of total stimulus dollars awarded to our customers."
Occam previously announced that customers Rural Telephone/Nex-Tech of Lenora, KS, Slic Network Solutions of Potsdam, NY, and Wabash Mutual Telephone of Celina, OH, each a RUS broadband stimulus recipient, had selected the gear maker's equipment for the new federally financed network builds. The providers had been awarded $101 million, $5.2 million, and $4.3 million respectively.
With the Wabash Telephone and Adams-Marquette announcements being made after the conference call of July 27, the company has as of yet not given out exact data around Howard-Anderson's figure of "approximately $150 million" awarded to customers that have told Occam is "designated" to receive new stimulus funded orders. Company investor relations outside counsel Peter DeNardo did tell us this afternoon that the figure had not been updated.
Analysts and investors in OCNW will be watching for specificity in that number, and in dollar amounts of access equipment ordered to further track the additional variable given by the company CEO on the July call. "The piece that goes to access equipment is 10% - 15%," stated Howard-Anderson referring to the percentage of the stimulus awards received by the 4 announced providers that is expected to flow to Occam as selected vendor. Thus, by Occam's calculation the firm is slated to receive as much as $22.5 million in revenue attributable to the 4 stimulus financed projects already in hand.
As all close observers of the federal effort know, the actual awarded dollars are moving into vendor and contractor pipelines slowly. Occam would appear to be well positioned to capture greater wins as the large bulk last mile projects move toward procurement following contract execution with RUS.
A Strong Stimulus Support Program
“Marquette-Adams’ dedication to true broadband access for an unserved population that also delivers on the National Broadband Plan’s goal of 100Mb speeds is a perfect example of how rural service providers are at the forefront of broadband deployment in the US,” said Juan Vela, Director, Solutions Marketing and Strategy for Occam Networks. Vela has been driving Occam's broadband stimulus vendor support program, holding industry workshops on the effort even before the Round 1 rules were announced.
Occam and its competitors Adtran (Nasdaq: ADTN), and Calix (NYSE: CALX), and optical transmission manufacutuer Infinera (Nasdaq: INFN) have been running aggressive and well organized efforts supporting their customers in going after federal dollars. Each of them have given close-in support to their current customers while seeing strong stimulus support programs as delivering competitive advantage aimed at capturing greater market share.
The larger Cisco Systems (Nasdaq: CSCO) and Alcatel-Lucent (NYSE: ALU) threw their lobbying might around Washington last year, in a successful effort to emasculate the Buy American provisions of the Recovery Act as they relate to telecom equipment. Since that time, one has seen little from either firm in terms of the day-to-day vendor-customer partnerships coming out of the broadband stimulus program which OCNW, ADTN, CALX, and INFN have shown.
“In closely working with Marquette-Adams throughout the application for stimulus funding, it was clear that their approach to extending their network was both innovative and economical, which was well-received by the RUS,” concluded Vela in today's press release.
Marquette-Adams to Use Federal Dollars to Scale to 1 Gbps
“Our goal at Marquette-Adams is to deliver the highest quality of services possible to our subscribers so that they are not handicapped by living in a rural area,” said Jerry Schneider, general manager of Marquette-Adams Telephone Cooperative. “With the new funding, we will routinely deliver 100Mbps access to our customers and will easily scale up to 1Gbps with Active Ethernet solutions from Occam. They have been a true partner throughout this stimulus application process and worked with us to maximize our network value.”
With the broadband stimulus funding, Marquette-Adams will leverage its existing core network and the Occam BLC 6000 to expand its fiber network 500 miles beyond the current serving territory, doubling the network to 1,000 miles in total. The flexibility of the Occam BLC 6000 MSAP and its support of Active Ethernet and GPON will allow Marquette-Adams to reach subscribers regardless of where they live. In addition, by utilizing existing central office and transport equipment from Occam Networks, Marquette-Adams will keep the deployment of new active electronics to a minimum and is estimating an annual electricity and battery savings of $50,000.
Marquette-Adams started a six-year transition to an all-fiber infrastructure in 2008 utilizing Occam’s BLC 6000 and a mix of GPON and Active Ethernet technologies. Over 1,000 existing customers are currently served over this network and the remaining 2,400 of Marquette-Adams customers will transition to fiber by 2012. Fiber subscribers are able to access traditional voice and data services, as well as video services such as HD television programming.