I delivered a presentation and facilitated a workshop on broadband adoption in northern California yesterday. Far away from the Bay Area – and reliable broadband. Imagine the irony of giving a presentation on broadband in a location where you don’t have access to it. Or is that empathy? I feel your pain.
Lots of folks were grappling with making sense of the ARRA applications. They’ve created an infrastructure application that, among many things, requires you prove how you plan to sustain the network. But there’s a separate application for Sustainable Broadband Adoption (SBA).
That’s kinda silly, separating them out like that. Presents communities with what appears to be two separate hurdles. Inspires some entities to pursue broadband adoption on their own in areas that may or may not be planning to build a network. A few may not even build networks at all.
Other than being a relatively tiny bone ($1.5 million) for urban areas that have painfully realized Round 1 funding isn’t going to help them much, it would have made more sense to wrap everything together. However, what we have is what we got, so let’s talk sustainability. This is a valuable discussion also for those who are planning to make a run at Round 2 funding.
Sustainability is government speak for “having enough customers paying you enough money every year for network services so you earn sufficient revenue to cover the expense of running the network.”
SBA is mainly the methods you use to to close them. SBA is also digital inclusion, but I address that in another blog.
You need smart marketing to close the right customers. Though it may seem counterintuitive, if at this date your project team still believes that selling subscriptions to individuals and residences is the primary road to sustainability, your plan’s in trouble.
In rural areas there aren’t enough individuals out of your total population who you can reasonably expect to subscribe to the network to offset your 20% match and annual OpEx. What you really want to do is find and close those customers who can generate 80% of your revenue though they make up only 20% of your customer base.
Your SBA plan needs to focus on are institutional customers, the equivalent of anchor tenants in a mall. Get a Macy’s, the Gap and a Home Depot, you pay for most of the land while the ebb and flow of mom & pop shops doesn’t damage your bottom line so much. It’s the same way with broadband networks.
Town, city and county governments should be your lead anchor tenants. They have identifiable communication needs, such as overhauling old, expensive T1 lines and mobile workforce automation that can justify their investment in broadband services.
The business community, as a block, is probably your second best source of institutional customers. Many communities typically have a handful of companies that need super highspeed fiber access. Since the grant needs 20% in matching funds, these key businesses can provide much of that.
The medical community offers you the opportunity to drive adoption by being institutional customers, and through hospitals and medical centers using the network to engage constituents, thus driving residential adoption.
Educational institutions drive adoption throughout the community to the extent that the school systems – K-12, colleges or adult education institutions – want to create programs that extend classroom learning.
These points I presented yesterday are just the tip of the iceberg in the strategy guide I just finished. It gives you 16 pages of pointers and insights for getting your proposal out the door with a minimum intake of Pepto Bismol tablets.