Though I did not spend a lot of time following stimulus proposals, two excellent proposals did catch my eye from Idaho and I hoped that at least one of them would be funded. Alas, neither was funded by NTIA or RUS. These are exactly the networks we need throughout the country, and Idaho is exactly the state that could benefit greatly from federal assistance. I hope these projects have better luck in the second round or in securing future funding from RUS outside the stimulus project. (This is not to suggest I disapprove of the Coeur d'Alene Reservation Fiber-to-the-Home (FTTH) Project that received funding - I am not as familiar with it and therefore have no comment on it.) The town of Ammon, some 13,000 people near Idaho Falls in eastern Idaho, developed a proposal for an a type of next-generation open access network in that it would offer greater flexibility to subscribers and service providers than many current open access networks. The other project, to serve the Northern Panhandle area, was designed with Ernie Bray, who previously consulted on the Powellink network in Wyoming. The Boise Weekly briefly discussed these projects a few weeks ago, noting their open access approach that would serve residents, businesses, and key institutional anchors with fiber-optics:

"Every entity we need to work with is already a stakeholder; we're ready to go," he said. "And we will use revenues for expansion and build out. We're trying to expand the concept of a service provider and services beyond just the triple play, voice-video-data," he said. "Telemedicine is a service, hospitals are service providers. We want to take fiber to every home and every business, then connect them to libraries, schools and job services so they can take advantage of programs to help lift them up."

Local jobs are at stake and incumbent providers are doing little to help:

Quest [Aircraft], who builds the Kodiak airplane, they've gotta exchange large engineering files in real time; 250 jobs are at stake.

Verizon is busy trying to offload all of its rural territories on Frontier (a company famous for slow and poor service) so it isn't about to upgrade facilities in Idaho.

Last summer, I predicted the NTIA's rules for the broadband stimulus would disadvantage the public sector and tilt the playing field toward the private sector. I was right. Consider a recent story about the first round of the stimulus:

With time and resources scarce and applications to review from nearly 2,200 entities, favoring vendors was less complicated because they wrote savvier proposals and required less follow-up, in Winogradoff's view.

Private companies were able to submit savvier proposals and generally swamp the system with far more proposals, slowing the entire process because the federal agencies did not expect the volume. NTIA claimed they wanted to make the funds more widely available and instead shut out much of the public sector. NTIA, along with most federal agencies, simply does not understand that a "level playing field" between private companies and the public sector is simply not possible. The public sector has different interests - maximizing social benefits whereas the private sector is interested in generating profits. Public and private entities are different creatures, operating in different regulatory environments, with divergent motivations. You can no more create an objectively level playing field between the two than one could in designing a contest between basketball and soccer teams. The rules are simply going to favor one or the other. The question becomes, who should the rules favor? When it comes to infrastructure and tax dollars, the rules should favor those who put the public interest first. This was the lesson of the Rural Electrification Administration, which was horrified at the idea of lavishing grants on profitable companies in the hopes they would temporarily invest in rural areas. Instead, they offered loans to cooperatives and extended electricity to farms across the country during the worst Depression in our history. What have we learned from that? Nothing. We contort our policies while offering more and more money to companies that time and time again show they have no interest in serving rural America. This is ludicrous - not only have we already built a wire out to almost every home in America, we still have the polls!

Finally, a broadband stimulus project that we can get excited about. RUS has announced a grant to expand the publicly owned WindomNet in southwestern Minnesota. Windom was originally built to bring broadband to a small community that Qwest didn't think ready for DSL. They built their own fiber-to-the-home network.

In rural Minnesota, the Southwest Minnesota Broadband Group (SWMBG) has been selected to receive an almost $6.4 million loan and a $6.4 million grant to extend fiber to the Jackson, Lakefield, Windom, Round Lake, Bingham Lake, Brewster, Wilder, Heron Lake, and Okabena communities. This funding, along with an $88,000 private investment, will provide high-speed Internet, voice, and cable television to the participating communities. This will improve the quality of life by increasing the availability of health, education, and public safety services across the region.

Now that network will expand to nearby communities, a move that will strengthen it financially as it can spread the fixed costs of such a network across a wider population base. And these communities will have actually have a choice in providers soon -- rather than relying on absentee incumbents that care only about increasing their profits. They will be beginning expansion work quite quickly according to this brief article.

For some 12 hours last week, entire communities found themselves without access to telecommunications due to a fiber cut to a Qwest cable that services the entire region. This is not the first time such a cut has marooned everything from Homeland Security to long distance phone calls to businesses that can no longer accept credit card transactions -- but Qwest has refused to invest in a redundant cable, showing their disregard for those communities. I wonder how many businesses were hurt by their sudden and unplanned isolation from clients, partners, and others. How many missed contracts or deadlines? It shows the insanity of putting barriers before communities that are trying to build the very networks companies like Qwest promise but never deliver (barriers like the 65% referendum to offer telephone services for publicly owned networks). Both Lake and Cook Counties are waiting to hear the status of their applications for federal broadband stimulus funds, with which they will build broadband networks. Companies like Qwest and Mediacom have opposed new networks in an effort to protect their turf, even while refusing to invest in those areas because they do not generate sufficient profits. These County initiatives have not been denied stimulus funding but have also not moved into the "due diligence" phase, placing them in limbo and forcing them to prepare additional applications for the second round of funding before they even know why their application was denied (if it is denied) in the first round. Somewhere, Joseph Heller is smiling.* MPR provided good coverage of this fiber cut even though they did not air an explanation as to why Qwest finds it reasonable to keep these communities connected with a single cable.

Bank ATM's failed. No one could use their credit cards. But as bad as that was for business, the 12-hour-long outage knocked out what the federal government calls a "vital part of our nation's emergency response system." The outage killed 911 emergency service in Cook County, Chief Deputy Leif Lunde said. ... With no 911 service, county officials turned to volunteer firefighters to field emergency calls from normally un-staffed fire halls. Fire truck radios relayed the information back to Grand Marais.

This community of almost 10,000 near St. Louis has taken another step toward creating competition in broadband by investing in a publicly owned fiber network. In April of 2009, the community voted overwhelmingly (75%) yes to a question authorizing the network with revenue bonds that would be backed by electrical revenues from the city's public power company. They have started the first phase (focusing mainly on businesses though some residences will be passed) by awarding bids for construction (the bids were below expectations - a slow economy is a good time for infrastructure investments due to the low prices). Though the project has spurred some debate, the majority remain in strong support, as demonstrated in a recent article about the project.

Guillot presented the council with more than 100 email replies from Highland Chamber of Commerce members who are in favor of the fiber project, including banks, schools, manufacturers, realtors and other businesses. “There are currently other companies providing like services in Highland. This project will not end their relationships with the city, rather it will give consumers a choice and force competitors to provide a better product or better service to remain competitive,” Guillot said. “This will also keep more revenue in Highland.” Highland resident Brad Korte agreed. “The fiber-to-the-home parallels paving the streets in the 20s, starting the city’s electric system and water department. I would rather spend my money, and take a chance with my money on Highland,” he said. “If we don’t take a chance on this, I think we would regret it in a couple of years.”

The project will proceed more quickly if they are successful in an application for stimulus funds under the broadband programs. Regardless, the first phase will be completed in a year and needs a 23% take rate to break even financially (ignoring the many indirect benefits of such a network).

After campaigning on building a publicly owned fiber-to-the-home network in Seattle, Mayor McGinn has decided to maintain leadership at the Department of Information Technology. Department head Bill Schrier will stay on, continuing his work that lays the groundwork for a community-owned network.

He said he expects the city to apply for federal stimulus money in the first part of the year to move toward that goal. In addition to improving broadband access in homes, the initiative could help Seattle City Light implement smart-grid infrastructure, and improve public safety communications.

Another article further notes their shared ambition:

"Mayor-elect McGinn ran on a platform of bringing fiber to every home and business in Seattle, something I've advocated for several years," Schrier commented.

No post discussing broadband in Seattle is complete without a reference to Glenn Fleishman - who both wrote another story discussing the situation and then patiently responds to many comments in the thread below it. Discussing Tacoma's publicly owned Click! network, he notes that Tacoma's investment benefited everyone:

Click being built actually helped what has become Qwest and Comcast: by creating a market and making it feasible for professionals who need high-speed Internet access in Tacoma to live there, Click spurred the two incumbents to improve their networks, compete, and gain new revenue. Comcast actually thanked Tacoma Power publicly years ago; not sure it would today, but it was seen as a big boost for the viability of competitive broadband.

Photo used under creative commons license from flickr.

I have just submitted comments from the Institute for Local Self-Reliance to both the the National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) regarding suggestions for rules in round two (the last round) of the broadband stimulus programs -- the Broadband Technology Opportunities Program (BTOP - administered by NTIA) and Broadband Initiatives Program (BIP - administered by RUS). The two agencies previously posted a joint request for information [pdf] on lessons learned from the first round:

RUS and NTIA released a joint Request for Information (RFI) seeking comment on further implementation of the Broadband Initiatives Program (BIP) and the Broadband Technology Opportunities Program (BTOP). Comments must be received by November 30, 2009. The input the agencies expect to receive from this process is intended to inform the second round of funding.

We offered five pages of comments, responding directly to the questions - I am led to believe that this is the preferred way of responding to such requests for information. Thus, the format consists of a short introduction and then questions (in italics) followed by our responses. Unsurprisingly, we generally encourage NTIA and RUS to better serve the public interest by requiring more transparency in the second round. We also call on them to stop accepting "advertised" speeds in their broadband definition and use actual delivered speeds in order to ensure communities are not discouraged from applying because their incumbent providers exaggerate the capabilities of their network. Most importantly, we call on NTIA and RUS to encourage public sector entities to apply by ceasing to consider all private networks to operate in the public interest. As we previously documented here, NTIA subverted the intent of Congress with the rules from round one. The rules should prefer public and nonprofit entities as they are directly accountable to the public and should therefore be the first in line to receive public money for essential infrastructure. As the number of applications to NTIA and RUS was far higher than expected, making the public interest requirements stronger should be a natural response.

Highland, a city in Illinois, has been recommended by the governor to receive a grant from the broadband stimulus program. Highland plans to build a full fiber-to-the-home network after first connecting the schools and public buildings (a phased approach that has worked well elsewhere). Stimulus funds would expedite the buildout that has already demonstrated strong community support.

Highland city voters passed — with 75 percent voting in favor — three referendums April 7 concerning the idea to bring fiber-optic cable connections to every home and business within the city. It will offer high-speed Internet service, telephone and cable TV. Shortly after, the council had authorized construction and operation of a telecommunications and cable television system, while emphasizing the need for careful planning. The council also voted to set up a three-member Telecommunications Advisory Board to oversee the process.

Our focus on the broadband stimulus is almost entirely on last-mile infrastructure because it is the most challenging and expensive problem to solve before all Americans will have affordable access to the broadband networks they need in the modern era. As we are most familiar with Minnesota, we decided to take an in-depth look on who is proposing what projects in our state. Total Infrastructure Grants Requested for Last Mile solely in MN: at least $240 million Total Infrastructure Loans Requested for Last Mile solely in MN: at least $85 million Groups seeking stimulus funds to deliver last-mile broadband access in Minnesota have asked for hundreds of millions of dollars. By my tally, some 17 applicants are seeking to serve Minnesota with last-mile access (I threw out applications pertaining to middle mile infrastructure, digital divide, and those last-mile projects that combine Wisconsin and North Dakota areas) have requested some $240 million in grants and $85 million in loans. If one assumes that the total amount of money is divided evenly among the states, this is somewhere around 3x as much stimulus money that will be awarded to Minnesota applicants over the course of the multiple rounds of funding. At some point, this list will have to be winnowed and prioritized, so let's delve into it. All applications still must survive the peer review process (ensuring they met NTIA/RUS requirements), the incumbent challenges (incumbents can veto applications by showing that targeted areas already have broadband advertised to them), and the prioritization of surviving projects by each state (no one seems sure of how this will happen in Minnesota, our Governor is too busy not running for President in 2012). There are two applications that should be jettisoned immediately, Arvig Telephone Company and Mid-State Telephone Company, both of which are owned by TDS Telecom.

The July/August issue of Broadband Properties features a number of stories relating to community broadband. Editor Masha Zager explains how the stimulus rules hurt communities:

The NOFA explicitly calls 768/200 Kbps broadband “sufficient access to broadband service to facilitate rural economic development,” but how many jobs will this kind of broadband really attract to a depressed area? How many new services can service providers sell over such networks? Will the networks support public needs for distance education or health care? And how long will it be before the equipment has to be replaced? In the words of a rural telco manager I spoke with recently, “You want to put money into something long-term if you’re going to start building networks. Don’t build something you’ll have to throw away in two or three years.”

Steve Ross takes a look at two networks in Minnesota - the much discussed Monticello FiberNet and a proposed network in Lake County (see Lake County Fiber Network Project FAQ):

Lake County is a rural area in northeastern Minnesota. Its planned network requires 800 miles of fiber to more than 7,300 homes and 500 businesses – every premises in the area that has electricity or telephone service now. It’s the first project of National Public Broadband (www.nationalpublicbroadband.org), a nonprofit helping communities develop and operate municipal fiber networks. NPB’s CEO is Tim Nulty, director of the ECFiber project awaiting funding in Vermont.

Steve discusses the crap that TDS is pulling to again prevent competition in Monticello. Despite being laughed (albeit slowly) out of court in their attempt to stop the city from building a fiber network, they are now attempting to incite a bondholder lawsuit by spreading more FUD (fear, uncertainty, and doubt). Interestingly, Steve suggests that TDS' numbers do not add up and that they are advertising fiber services while offering advanced DSL (not that any other private companies have similarly lied).