The Broadband Technology Opportunities Program (Stimulus)

The Broadband Technology Opportunities Program (Stimulus) will provide some $4 billion grants for broadband deployments across the US for unserved and underserved communities while supporting healthcare, education, public safety and job creation. Entities eligible for those dollars include any government, nonprofit or service provider. Another $2.5 billion is available through the Rural Utilities Services (RUS). Lets put that in perspective. The telecom boom of the 1990's allegedly put $80 billion into circulation worldwide and across many disciplines. While this might be only 10% of that, the focus on rural US communities and (probably) wireless broadband internet projects marks the largest infusion of capital into rural telecommunications since the Telecommunications Act of 1934 or the creation of the RUS loan program of the 1950's.

Given that last telecom boom was a decade ago, we can say that for many young telecom professionals, this won't be their dad or mom's telecom boom. I get calls that go like this: "I want some of that bailout money for my startup" or "Me and 50 of my best friends are gonna go for $10 million of that grant money, put up a WiMAX network in the desert, get a bunch of subs and cash out early. We're gonna be rich!" These programs don't work that way.
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First, unless a for-profit, private sector entity can demonstrate a powerful public good in their grant application, they will not receive grant or loan funds. What is stressed by the American Recovery and Reinvestment Act of 2009 are "public-private partnerships" that will:

1. provide service to unserved or underserved markets
2. provide broadband to support education
3. provide broadband to support healthcare
4. provide broadband to support job creation
5. provide broadband to low income households and support computer usage

These goals don't sound much like your typical Silicon Valley VC pitch which go more along the lines of "By Christmas 2008 we will have X towers in Y cities" or "we will be EBITDA positive in 18 months and you can cash out for $200 million". Nope, outcomes predicted by grant applicants will have to go more on the lines of "our network will reduce the drop out rate at Public School 13 by X %", or "we can reduce rural unemployment in this community by Y %", "we will reduce the cost of healthcare provided by fill-in-the-blank county public health by X %". If you're not prepared to do this stop reading here and forget the grant program.

The real engineering of a successful grant will not be in the technology but in organizing those public private partnerships. The public-private partnership will have to be a balance that mixes public good, social goals and economic sustainability of the project. Challenges might include:
1. Who builds and operates a network in a public-private partnership?
2. Who are the anchor tenants for a sustainable, community network?
3. How does one measure the outcomes of the network to determine success or failure?

In any event, obtaining "free" federal money to the tune of millions of dollars is never an easy process. The grant application requires: a) a business plan b) an engineering study and c) a cost estimate. Sounds easy enough, but the details of that business plan with appendices should stretch into the hundreds of pages. You will need to detail how every dollar is going to be spent. Expect to be audited by the feds and state governments while being open public scrutiny. Did I talk you out of this yet?

None of this is unprecedented. That raving socialist Dwight D. Eisenhower built the Interstate highways along these lines. Would we have fast food, shopping malls, far-flung suburbs, car-based everything without his "public-private partnerships"?

Frank Ohrtman is author of the BTOP Grant Application Support Package that enables service providers, municipalities and other grant applicants to quickly and accurately write a technology-detailed, application-specific grant application to fund a WiMAX network in their unserved or underserved market.

http://www.mindcommerce.com/Publications/BTOP_Grant_Appl_Package.php