Private Companies Should Be Allowed To Apply For Broadband Stimulus Funding

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The cable, satellite, and wireless industries got together Monday to tell the National Telecommunications & Information Administration that it should allow private companies to apply for the $4.7 billion in broadband stimulus grant money without having to partner with governments or other eligible entities.

Others argued that private entities were the ones that had thus far left the communities at issue without broadband, or without broadband of sufficient speeds and reasonable prices, and therefore needed to work in tandem with the government if they wanted a shot at the money.

That debate came at the second of a series of public meetings on the grant/loan program, this one focusing on the eligibility of private entities, an issue of obvious importance to the cable broadband service providers and networks seeking some of that money.

The way the economic stimulus package law was written, governments, nonprofits and tribal organizations are all free to apply for the money, but private entities like service and network providers can only apply if the NTIA determines it is in the public interest.

The morning session at NTIA's Washington headquarters on private sector eligibility was part of the process of helping the agency decide how to make that call.

Curt Stamp, president of the Independent Telephone and Telecommunications Alliance, spoke for an alliance of private-sector telecom companies, including National Cable & Telecommunications Association, in arguing that those industries have the track records and extensive expertise.

Stamp said that the groups he represented wanted NTIA to make eligible any entity that held an FCC license, a stated certification, cable franchise or similar government authority, saying they had clearly demonstrated the capacity to carry out the projects in compliance with applicable laws and in an expeditious and efficient manner. He said since they had already been found to be viable service providers, no other additional review was necessary. Stamp wasn't precluding making any others eligible, just that they might need a higher bar of vetting.

He recevied an assist from Debbie Goldman, telecommunications policy directoir for the Communications Workers of America, who said that past performance should be a strong consideration. She said that the proven track record should be an important criteria, suggesting that demonstrating the financial, technical and managerial chops to complete the project quickly and continue operating it after the stimulus money has been expended.

Not surprisingly, CWA also puts a premium on demonstrated job creation.

Also arguing for letting private industry apply without pairing up with a government entity was Grant Seiffert, president of the Telecommunications Industry Association, which represents telecom equipment vendors.

Seiffert argued that Congress meant for NTIA to choose among as diverse a pool as possible, and that the test should be based on the ability to use the funds to achieve the goal of efficient and quality service -- which is only possible under an open system. He said he did not think the program could be successful unless that were the case.

"Criteria for grant awards should include a proposed project's area and demographic coverage, cost, and efficiency, along with the quality and suitability of the broadband offering," Seiffert said.

"An open eligibility policy," he added, "would also be consistent with the RUS portion of the [program], which allows private entities to propose broadband infrastructure projects for funding."

The Rural Utility Service, part of the Department of Agriculture and NTIA, both got grant money under the program and were asked to work to gether to coordinate their efforts with an assist from the FCC, which must come up with a national broadband rollout plan within a year.

Stamp called on NTIA not to create a bifurcated grant process, saying that already-eligible entities should not gain an advantage while the agency figures out how to deal with the private sector. He said NTIA should not process those requests before it had figured out the standard for allowing the "experienced and capable" private sector entites to apply.

Betty Ann Kane, chair of the DC Public Service Commission, spoke for the National Association of Regulatory Utility Commissioners, in suggesting that those capable and experience companies needed a government partner to be eligible. She pointed to the state's role in broadband mapping as part of the broadband stimulus plan, and said that there was a need for at least a coordination role for state and local government entities in the grants.

Joining Kane in raising some cautionary flags on private sector participation was Sasha Meinrath of the New America Foundation, who said that profit must be a byproduct, not a goal, of the program, and said bemoaned the woeful state of current broadband service in many communities.

In fact, one of the arguments from members of this camp -- both on the panel an in the audience -- centered on incumbents as the ones responsible for the "woeful state" as Meinrath put it, of broadband deployment in some communities.

Stamp and Goldman took issue with that, pointing out that anybody among the 10%-15% of the country not getting broadband, were being constrained by uneconomical buildout and that with the grant money, the already-existing networks could apply their managerial and technical, and operational expertise to finishing that job with the governemnt's help.

NTIA has put out an official request for commentand his holding meetings March 16, 19, 23 and 24 in Washington, plus field hearings March 17 and 18. Comments are due by April 13.

The goal of the Broadband Technology Opportunities Program, which is the official name for the grant program, is "accelerating broadband deployment in unserved and underserved areas and ensuring that strategic institutions that are likely to create jobs or provide significant public benefits have broadband connections."

In addition to deciding eligibility, then deciding who among that pool would get the grants, another key question is defining "underserved areas" and how to serve them, as well as defining the openness and interconnection conditions that come along with the grants. Congress will have a hand in the latter.

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