Rural Telecom Associations Band Together for Unified Approach to Universal Service Reform

May 20, 2010
5/19/10 at 8:28 AM by Bernie Arnason

There is a big fight brewing in Washington – one whose outcome will have far reaching implications for rural broadband carriers. The issue is the multi-billion dollar universal service fund, and the fight revolves around its reform. As a result, many of the leading trade associations representing the interests of rural telephone companies have banded together for a ‘unified rural position.’

The unified movement includes the National Exchange Carrier Association (NECA), the National Telecommunications Cooperative Association (NTCA), the Organization for the Promotion of Small Telephone Companies (OPASTCO), and the Western Telecommunications Alliance (WTA). That’s a mouthful. These groups have agreed to respond to the upcoming National Broadband Plan’s Notice of Proposed Rulemaking (NPRM) and Notice of Inquiry (NOI) seeking comment on the FCC’s proposals regarding Cost Modeling and Universal Service Reform.

In a letter to its joint members the coalition outlined several key positions they will advocate for:

  • Network design based on funding only 4 Meg in rural areas is shortsighted and creates a digital divide compared to 100 Meg in urban areas.
  • RLECs have made significant investments in multi‐use, broadband capable networks which serve 37% of the national geography. Their continued ability to provide comparable telecommunications services to rural Americans is vital to our nation’s economic development, national security and public health and safety.
  • These investments have been made possible due to a time‐tested cost‐recovery structure consisting of rate‐of‐return regulation, NECA pooling, intercarrier compensation and USF support.
  • The FCC should now be looking to recreate this success story with a broadband focus and not undermine or ignore what has worked to achieve affordable and comparable services for rural consumers as required by the Communications Act.

There’s a lot at stake. Expect some considerable and heated debate, with some eventual ‘horse trading’ before this contentious issue gets resolved. Comments on the NPRM/NOI are due on July 12, with replies due on August 11.

NTIA Completes Round One Awards With Plenty of Funds Left

April 28, 2010
4/27/10 at 8:19 AM by Joan Engebretson

The National Telecommunications and Information Agency on April 26 announced what it said would be its final awards in Round 1 of the broadband stimulus program. With this announcement, funding for round one of the broadband stimulus program is officially closed.

The nine new grants bring the total value of awards made by the NTIA in Round 1 to $1.2 billion. Considering that the NTIA was charged with awarding a total of $4.7 billion in two funding rounds, that leaves more than half for the second round. Combine that with the fact that there were fewer applicants in Round 2 and it should make an individual applicant’s odds of winning something considerably better in the second round, which had a filing deadline in late March.

Award winners included:

  • One Economy Corporation, $28.5 million for a sustainable broadband adoption program in 31 states
  • DigitalBridge Communications, three separate awards totaling $4.3 million for wireless broadband infrastructure in Idaho
  • The City of Williamstown, Ky., $535,000 for a fiber-to-the-home network
  • Pine Telephone Company, $9.5 million for broadband wireless infrastructure in Oklahoma
  • Critical Hub Networks, $25.8 million for an undersea cable and middle-mile microwave network in Puerto Rico
  • Buggs Island Telephone Cooperative, $19 million for broadband wireless infrastructure in Virginia
  • Public Utility District of Pend Oreille County, $27.2 million for a fiber-to-the-premises network in the state of Washington

The Rural Utilities Service, which has responsibility for awarding an additional $2.5 billion in broadband stimulus funding, issued its final Round 1 awards at the end of March.

The RUS also received fewer applications in Round 2 and has slightly more than half of its total award money still available.

RUS Receives 776 Applications for Broadband Stimulus Round Two

April 20, 2010
4/19/10 at 12:49 PM by Joan Engebretson

The Rural Utilities Service (RUS) said late last week that it received 776 applications in the second round of broadband stimulus funding requesting nearly $11.2 billion. The RUS was given a total of $2.5 billion to administer in two funding rounds and awarded less than half in the first round.

The total number of applications was down from the 1230-plus the agency received in the first funding round. But that’s not surprising, considering changes in application rules. In the first round applicants were allowed to submit the same application to the RUS and the National Telecommunications and Information Agency (NTIA), which then determined which agency—if either—would grant the award. In the second round, an individual application could go to only one agency.

The NTIA received 867 applications in the second round, down from 1090 in the first round. While all RUS applications are for infrastructure projects, only 355 of the NTIA applications in this round–totaling $8.4 billion–were for infrastructure projects.

In the second round the NTIA is focusing on broadband infrastructure projects that connect community anchor institutions, while the RUS focuses primarily on last mile projects aimed at reaching end users. All NTIA awards are in the form of grants, while the RUS can make awards that involve a combination of a grant and a loan. It would appear the odds of an individual infrastructure project receiving funding from the NTIA in this round are better than the odds of being funded by the RUS, as the NTIA still has approximately $2.35 billion available for infrastructure awards.

Among the largest carriers, only those who previously announced plans to apply in this round have done so. Neither AT&T nor Verizon nor any major cable or wireless company will be found on the applicant list. But as previously announced Qwest, TDS Telecom and Windstream made applications, as did Iowa Telecom.

Many applicants were small incumbent telcos and organizations that apparently were created with the goal of applying for broadband funding. Among all the last mile applications, FTTH appears to be the most popular last mile broadband technology.

NTIA Receives Fewer Applications, $11B in Funding Requests for Round 2

April 9, 2010
4/7/10 at 4:52 PM by Joan Engebretson

The National Telecommunications and Information Agency received less than half the number of applications in the second round of broadband stimulus funding than it did in Round 1.

The total number of applicants in Round 2 was just 867, compared with nearly 1800 in the first round. The biggest drop was in the infrastructure category, for which the NTIA received 355 applications—down from 1090 in the first round.

This was likely a result of new application guidelines, which now prohibit applicants from filing the same project with both the NTIA and the Rural Utilities Service (RUS), the agency that is administering the broadband stimulus program in cooperation with the NTIA. In the first round, applicants for infrastructure funding were allowed to submit the same project to both agencies. Although they were not allowed to receive duplicate funding, the idea was to improve the odds of winning something—and 830 joint applications were made in Round 1.

Despite their reduced numbers, however, infrastructure projects represented the majority of funding requested from the NTIA in the second round—$8.4 billion out of $11 billion total requested. The NTIA has approximately $2.35 billion available for this round for infrastructure applications, with an additional $250 million or more available for non-infrastructure projects, which include sustainable broadband adoption and public computer center projects.

The RUS has not yet announced how many applications it received in the second round. But several carriers — including Qwest, TDS Telecom and Windstream – already have announced that they have applied for RUS funding. An RUS spokesman said the agency expects to release its Round 2 application totals within a few days.

The RUS, which was allotted $2.5 billion to distribute over two rounds, recently said it had completed all awards for Round 1 and has awarded less than half of its total amount to date.

USDA Concludes Broadband Stimulus Round 1 with $22 Million Native American Award

March 31, 2010

USDA Press Release via StimulatingBroadband.com 03/30/2010 Washington – Agriculture Secretary Tom Vilsack today announced the selection of the Reservation Telephone Cooperative infrastructure broadband project to give rural residents of the Fort Berthold Indian Reservation and the surrounding area access to improved economic and educational opportunities. The service area includes parts of Montana and North Dakota.

Chairman Marcus Levings, of the Three Affiliated Tribes of the
Fort Berthold Reservation, ND, speaks to President Obama during
the Native American Summit of 11/05/2009 held at Dept. of the
Interior (Photo: Doug Mills, New York Times)

 

Today’s announcement concludes the U.S. Department of Agriculture’s first round of broadband funding announcements through the American Recovery and Reinvestment Act (Recovery Act). Applications filed under the second and final round are under review and will be announced before the end of the 2010 fiscal year.

“The Recovery Act broadband projects announced by USDA will open up educational, job and business opportunities to hundreds of thousands of Americans living in rural areas,” said Vilsack. “As President Obama said earlier this month, ‘America today is on the verge of a broadband-driven Internet era that will unleash innovation, create new jobs and industries, provide consumers with new powerful sources of information, enhance American safety and security, and connect communities in ways that strengthen our democracy.’ I am pleased that USDA, with funds provided through the Recovery Act, is leading this effort in rural parts of our country.”

Today’s announcement provides a $10.95 million loan and a $10.95 million grant to the Reservation Telephone Cooperative to provide service in the remote and rural areas in and around the Fort Berthold Indian Reservation. The project will bring broadband service to homes, businesses, schools and libraries. In addition, service will be provided to tribal government facilities which provide tribal child support, education assistance, employment assistance, health care and public safety services on the reservation. The area has experienced poverty rates as high as 28 percent and a 40 percent unemployment rate.

To date, $1.067 billion has been invested by USDA through the Recovery Act for 68 broadband projects. Together, the projects will make high speed Internet available to an estimated 529,000 households and 96,000 rural business and public facilities across 31 states, one territory and 17 tribal lands and predominantly Alaska Native regions. Many of the areas to be served are extremely remote, sparsely populated and in some cases not connected by roads. Secretary Vilsack and other cabinet officials visited some of the communities that will receive broadband Internet access during a “Rural Tour” last year. Funding is contingent upon the recipient meeting the terms of the loan, grant or loan/grant agreement.

President Obama signed The American Recovery and Reinvestment Act of 2009 into law on Feb. 17, 2009. It is designed to jumpstart the nation’s economy, create or save millions of jobs, and help to bridge the digital divide necessary to addressing long-neglected challenges so our country can thrive in the 21st century. The Act includes measures to modernize our nation’s infrastructure, enhance energy independence, expand educational opportunities, preserve and improve affordable health care, provide tax relief, and protect those in greatest need.

Agriculture Secretary Vilsack Announces Rural Broadband Projects to Bring Economic Opportunity to Communities in Eight States

March 24, 2010

WASHINGTON, March 23, 2010 – Agriculture Secretary Tom Vilsack today announced the selection of broadband infrastructure projects to give rural residents in 8 states access to improved economic and educational opportunities. Funding for the projects is being provided through the American Recovery and Reinvestment Act.

            “The broadband projects announced today will give rural Americans access to the tools they need to attract new businesses, educational opportunities and jobs,” Vilsack said. “The Obama Administration understands that bringing broadband to rural America provides a gateway for businesses and key anchor institutions – such as libraries, schools, public buildings and community centers to provide services to thousands of Americans.  These projects will create jobs building these networks, and the completed systems will provide a platform for rural economic growth for years to come.”

In all, $150 million will be invested in 12 projects through funding made available by Congress in the American Recovery and Reinvestment Act.  An additional $68.2 million in private investment will be provided in matching funds, bringing the total funds invested to $218.2 million. To date, $1.05 billion has been provided to construct 67 broadband projects in 30 states and one territory.

For example, in the Sonoran Desert of Arizona, the Tohono O’odham Utility Authority (TOUA) has been selected to receive a $3.6 million loan and a $3.6 million grant to design, engineer and construct a digital network to replace dial-up service.  This project will provide services throughout the Tohono O’odham Reservation using Fiber-to-the-Premises (FTTP) and fixed wireless broadband. 

Also, in the rural towns of Madison and Lamont, Kan., Madison Telephone, LLC (MTC) was selected to receive a $3.5 million loan and a $3.5 million grant to design, engineer and construct an FTTP network. This project will improve the existing copper-based network that currently limits average customer service speeds. MTC will upgrade this network to FTTP facilities and technologies, thereby eliminating this last mile limitation.

Funding is contingent upon the recipient meeting the terms of the loan, grant or loan/grant agreement. A complete list of recent Recovery Act broadband award recipients by state is below:

Alaska

  • Copper Valley Wireless, Inc.: The Cordova, Alaska, Microwave Project; $1,747,796 loan and $1,747,795 grant. The funding will extend middle-mile connectivity from Naked Island to Cordova.

 

Arizona

  • Tohono O’odham Utility Authority: The Fiber Route – Middle Mile Project; $3,565,900 loan and $3,565,900 grant. The funding will enable high-speed DSL services throughout the reservation with Fiber-to-the-Premises and fixed wireless broadband in certain areas. 

 

Illinois

  • Norlight Telecommunications, Inc.: The Rural High-Speed Ethernet Network – Southern Illinois Project; $14,230,375 loan, $8,538,224 grant and  $5,692,151 of private investment. The funding will provide more than 1,600 miles of middle-mile fiber-optic network throughout 24 southern counties to deliver high-speed Ethernet connectivity.

 

Kansas

  • South Central Telephone Association, Inc.: The Lake City & Sun City Rural Fiber-to-the-House (FTTH) Project; $871,200 grant, and $3,550,800 of private investment. The funding will provide FTTH broadband service to all unserved establishments in the telephone exchanges of Lake and Sun City.

 

  • Madison Telephone, LLC: The Madison-Lamont Fiber-to-the-Premises (FTTP) Project; $3,519,750 loan, $3,519,750 grant and $763,634 of private investment. The funding will provide FTTP last-mile broadband service to exchange areas, including the Kansas telephone exchanges of Madison and Lamont.

 

  • J.B.N. Telephone Company, Inc.: The West Cluster Plus Barnes Fiber-to-the-Premises (FTTP) Project; $5,489,250 loan, $5,489,250 grant, and $3,697,619 of private investment. The funding will provide FTTP broadband service throughout seven western exchanges (West Cluster) and the Barnes exchange (Barnes).

 

Minnesota

  • Northeast Service Cooperative: The Northeast Minnesota Middle Mile Project; $21,749,110 loan and $21,749,110 grant. The funding will provide middle-mile, dark fiber, wavelength services to private-sector providers in rural areas of northeast Minnesota.
  • ·
  • Minnesota Valley Television Improvement Corporation: The Minnesota Wireless Expansion Project; $562,776 loan and $562,776 grant, and $281,388 of private investment. The funding will provide a two-way broadband internet network to unserved and underserved areas of west central and south central Minnesota, providing 34 additional wireless (WiMAX) access points.

 

North Dakota

  • Dakota Central Telecom 1 (DCT1): The Dakota Central Telecom l Project; $2,252,250 grant, and $2,499,597 of private investment. The funding will provide Fiber-to-the-Premises (FTTP) broadband services to households, businesses and key community organizations in portions of the Streeter and Gackle exchanges that are currently unserved.

 

Oklahoma

  • Pioneer Long Distance, Inc.: The Western Oklahoma Wireless (WOW) Project; $1,819,349 loan and $1,783,322 grant. The funding will provide wireless broadband service to unserved and underserved rural areas in western Oklahoma.

 

  • Panhandle Telephone Cooperative, Inc.: The Western Oklahoma Broadband Infrastructure Development Project; $3,366,188 loan, $10,098,562 grant, and $23,297,597 of private investment. The funding will provide a broadband infrastructure to rural areas within the western Oklahoma panhandle area.

 

Texas

  • Wes-Tex Telephone Cooperative, Inc.: The Western Texas Broadband Infrastructure Development Project; $16,891,875 loan, $16,891,875 grant and $28,417,425 of private investment. The funding will provide a broadband infrastructure to increase Internet availability and access speeds in rural areas of western Texas.

 

            President Obama signed The American Recovery and Reinvestment Act of 2009 into law on Feb. 17, 2009.  It is designed to jumpstart the nation’s economy, create or save millions of jobs, and put a down payment on addressing long-neglected challenges so our country can thrive in the 21st century.  The Act includes measures to modernize our nation’s infrastructure, enhance energy independence, expand educational opportunities, preserve and improve affordable health care, provide tax relief, and protect those in greatest need.

            More information about USDA’s Recovery Act efforts is available at www.usda.gov/recovery . More information about the Federal government’s efforts on the Recovery Act is available at www.recovery.gov .

FCC’s National Broadband Plan Released Today

March 16, 2010
3/16/10 at 10:08 AM by Joan Engebretson  http://www.telecompetitor.com/

The National Broadband Plan, to be released today, focuses on four ways government can help ensure that every American has access to broadband. These include, 1) designing policies to ensure competition; 2) ensuring efficient management of assets such as spectrum and rights of way; 3) reforming the Universal Service Fund to support broadband; and 4) reforming policies to maximize the benefits of broadband in government-influenced sectors. Such sectors include education, health care and government operations.

According to a FCC broadband plan executive summary released yesterday, the plan also will establish six longer-term goals “to serve as a compass over the next decade.” These include:

  • Connect 100 million households to affordable 100-megabits-per-second service, building the world’s largest market of high-speed broadband users and ensuring that new jobs and businesses are created in America.
  • Affordable access in every American community to ultra-high-speed broadband of at least 1 gigabit per second at anchor institutions such as schools, hospitals, and military installations so that America is hosting the experiments that produce tomorrow’s ideas and industries.
  • Ensure that the United States is leading the world in mobile innovation by making 500 megahertz of spectrum newly available for licensed and unlicensed use.
  • Move our adoption rates from roughly 65 percent to more than 90 percent and make sure that every child in America is digitally literate by the time he or she leaves high school.
  • Bring affordable broadband to rural communities, schools, libraries, and vulnerable populations by transitioning existing Universal Service Fund support from yesterday’s analog technologies to tomorrow’s digital infrastructure.
  • Promote competition across the broadband ecosystem by ensuring greater transparency, removing barriers to entry, and conducting market-based analysis with quality data on price, speed, and availability.
  • Enhance the safety of the American people by providing every first responder with access to a nationwide, wireless, interoperable public safety network.

“The National Broadband Plan is a 21st century roadmap to spur economic growth and investment, create jobs, educate our children, protect our citizens and engage in our democracy,” said FCC Chairman Julius Genachowski in announcing the delivery of the plan to Congress. “It’s an action plan, and action is necessary to meet the challenges of global competitiveness and harness the power of broadband to help address so many vital national issues.”

In the coming weeks, we plan to offer much more detail about this plan and its implications fro broadband carriers, large and small. Stay tuned.

Stimulus Award Momentum Growing Quickly, Latest Take is $160 Million

March 5, 2010

3/4/10 at 9:55 AM by Joan Engebretson

The National Telecommunications and Information Agency (NTIA) has announced 23 more funding recipients under the American Recovery and Reinvestment Act. The total value of the awards announced March 2 is more than $160 million.

Fifteen of the awards went for broadband infrastructure, while six were for public computing centers and two were for sustainable broadband adoption. All awards were grants with applicant-provided matching funds.

The largest recipient in this announcement was Level 3 Communications, which won individual broadband infrastructure grants in six states with a total value of $14 million. The grant to Level 3 will support the construction of network access points to its existing broadband network in California, Florida, Georgia, Kansas, Tennessee and Texas.

The smallest award was a public computer center grant for $176,000 to the Santa Fe Civic Housing Authority to expand the capacity of one public computer center and create an additional center at two public housing sites.

Other states where project funding was announced include Illinois, Indiana, Louisiana, Massachusetts, Maryland, North Carolina, Ohio, Oregon, Wisconsin and West Virginia. The Iniciative Tecnolegica Centro Oriental in Puerto Rico also won a grant.

In a press release announcing the awards, NTIA Administrator Lawrence Strickling said “the strongest proposals are the ones that have taken a truly comprehensive view of the communities to be served and have engaged as many key members of the communities as possible in developing the projects.”

For a detailed summary of these latest awards go to:  http://www.telecompetitor.com/stimulus-award-momentum-growing-quickly-latest-take-is-160-million/

FCC’s National Broadband Plan May Cost $25 Billion

March 5, 2010
3/2/10 at 11:10 PM by Bernie Arnason

In about two weeks the FCC is scheduled to deliver a national broadband plan to Congress. The American Recovery and Reinvestment Act of 2009 mandated that the FCC author the plan, with the idea that the billions of dollars that are being allocated to broadband infrastructure should be wisely invested. The broadband stimulus plan allocates $7.2 billion towards the broadband cause. It appears to be a down payment.

The Wall Street Journal is reporting that the FCC’s national broadband plan will call for an additional $25 billion in spending. Of that $25 billion, approximately half or more will be allocated to a nationwide broadband public safety network for first responders. The FCC hopes to pay for this portion through future wireless spectrum auction proceeds. Additionally, the plan calls for $9 billion in funding for bringing broadband to rural areas. But it’s not entirely clear where that funding will come from.

The universal service fund (USF) is also addressed in the plan. Much of its current $8 billion budget would be reallocated towards broadband service, away from its current legacy phone service focus. The FCC believes it can clean up significant waste in the current USF, allowing it to address its new broadband mission without significant increases in its budget. Determining and rooting out this so called waste should be an interesting process to watch.

The Wall Street Journal also reports that large ISPs (cable and telco) will probably be happy with the plan, as it won’t force their hand on much. That’s not surprising. As I wrote this post (in approximately 30 minutes or so) in suburban Washington D.C., I counted three or more broadband lobbyist commercials on the 10:00 news.

http://www.telecompetitor.com/fcc%e2%80%99s-national-broadband-plan-may-cost-25-billion/

NTIA and RUS Grant Limited Extension to File Infrastructure Applications for Second Round

March 3, 2010

Tuesday, March 2, 2010

NTIA and RUS will grant a limited extension of time to file infrastructure applications in the second funding round. Specifically, applicants for BTOP Comprehensive Community Infrastructure projects will have until March 26th to file their applications to NTIA. Applicants for BIP infrastructure projects will have until March 29th to file their applications to RUS. Applications in NTIA’s two other project categories – Public Computer Centers and Sustainable Broadband Adoption – remain due on March 15th.


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