$3.4 Billion for Smart Grid Projects? Let’s Make a Broadband Deal!

Yesterday, the Feds awarded $3.4 billion to 100 smart grid projects across the U.S. There were about 400 total proposals. Since these are 50-50 matching grants, that means total dollars being queued up by these entities for smart grids is quite substantial.

For public and private sector organizations seeking broadband ARRA grants or planning to build networks without these grants, this smart grid investment could have stimulating effect. Those who stand to really benefit are urban areas submitting broadband adoption and public computer center proposals, and urban areas that may have given up on ARRA altogether after seeing the NOFA rules.

Big picture view

The best way to describe things so you see why yesterday’s news is important is to break down a smart grid into its main components.

There is the smart meter device that’s attached to (or built into) water, gas and electric utility meters at commercial and residential buildings to collect data on energy usage. The data collected can help utility companies manage their energy resources more effectively. Utilities can also communicate with these meters, sending data, commands to turn down air conditioners, queries to find the source of water leaks, etc.

Smart meter devices generally have their data aggregated to another computing device mounted at some point in the neighborhood, maybe one aggregation point per 100 dwellings (a hypothetical number). Then all of the aggregation points have to traffic their data back to the utility or wherever else it needs to go.

Overall, the smart grid can also be tapped to manage mobile utility workforces who can communicate with office staff and smart meters, as well as access office computer networks, via wireless mesh built into the grid and handheld mobile devices. The grid is also envision as a cost effective way to move energy such as that collected on windmill farms from one point of the country to another.

A primary intersection between smart grid and broadband potentially exists through the data backhaul infrastructure of the grid. A community’s fiber network can provide the backhaul for this aggregated data. Or a utility can build its own fiber backhaul and determine how to make that fiber available for local government and other institutions for their use. These stimulus grants went to public utilities, so local government and the community can have some influence in a discussion on the matter.

The mechanics of this whole smart grid are complex, but you get the big picture view. All of the things people are talking about doing with smart grid, such as moving “green” energy from windmill farms and proactively managing energy usage, require at some point a fast data connection. That means fiber (the ideal) or possibly super-fast fixed wireless. 

How to leverage the opportunity

Community broadband projects that survive the first phase of cuts in the NOFA round 1 funding process will soon go into a due diligence phase where NTIA/RUS will ask applicants to clarify and fine-tune their proposals. If an applicant is in an area that won one of these smart grid grants, they need to get with the smart grid winner ASAP and determine how the broadband proposal can be tweaked to incorporate, or integrate with, aspects of the smart grid project.

The end goal for NOFA applicants would be to strengthen the business case or the technology strategy of the broadband proposal. For the smart grid grant winners, this collaboration can lead to a better overall infrastructure that moves their data more efficiently. You can even contact the 300 applicants that didn’t win a grant. Smart grid is pretty important in utilities’ future plans, so they should at least listen to what you have to say. 

Urban areas definitely need to jump on this opportunity with both feet. Public utilities in Philadelphia and Baltimore are just two major cities that won big grants, and these are areas that have little or no chance at getting an infrastructure grant. But if big cities have broadband adoption and/or public computer center proposals in the queue as Philly does, they possibly can work out a way to tap into aspects of the smart grids wireless network or backhaul. Because the network infrastructure would already be paid for, NOFA applicants can make a stronger case for financial sustainability of the project.

The devilish details 

When contemplating the details of making this work, the first thing I always consider is the politics. Big utility companies in big cities mean potentially big political headaches trying to integrate the efforts needed to make this whole vision work. On the other hand, no risk, no reward, no pain, no gain.

There are a number of technology and potentially complex standards issues at play that have to be worked out. Different smart grid companies use different technologies for the devices that sit on meters, and this can play havoc with getting the data to a standard backhaul pipe such as a fiber or a WiMAX network. Not all of those devices are built around IP-based technology.

While those who understand WiFi networks’ potential to improve utility meter management praise the use of wireless mesh by some smart grid companies, some of these companies use different wireless than 802.11. Looking at which smart grid projects receive funding will help determine what standards should start to shake out. Did the IP-based projects get the lion’s share of the awards?

Bottom line? It’s clear where there is the potential for an intersect, and why it behooves broadband stimulus applicants to meet with utilities winning smart grid grants. But everyone involved must be prepared for a lot of work to make the integration happen.

My Two-Step on Net Neutrality

In anticipation of, and then response to, yesterday’s FCC meeting on net neutrality, I wrote a couple of posts for Daily Wireless that consider 1) money, the root of most actions coming the anti-net neut leaders, and 2) my wonderment at the fact we can turn a concept so simple into a total circus.

A debate full of sound and fury

One of the best movie lines is in All the President’s Men, the Woodward and Bernstein are trying to unravel the Watergate mess: “Follow the money.” This advice is priceless because it’s the answer to so many of pressing questions in politics, business, geez, even personal relationships. 

“Follow the money” definitely gets to the bottom of the question of why the incumbent telcos have totally lost their mind over net neutrality. It has become a breathtaking display of whining, bullying, fear mongering and distortion of facts. Before tomorrow’s FCC meeting to present the rules (that’s right, all this wailing and gnashing of teeth from people who haven’t even seen the rules), here’s a basic overview of the debate from a pro-net neutrality perspective.

Let’s follow the money to get to the heart of the massive resistance by AT&T, Verizon, et al.

Click here to read the rest

Rumors of death greatly exaggerated

As I sat watching Mr. G. lay out the details on the net neutrality rules, I had to chuckle. After weeks of the righteous outrage of incumbents’ CEOs, cries in the wilderness to “let my people go,” AT&T execs falling prostrate rending their garments and exhorting employees to rise up against the FCC demon hordes, this is it!? Where are the Four Horsemen of the Apocalypse?

Bemusement gave way to mild despair. I remembered after the FCC vote in favor of adopting the rules, we’re looking at over two months of public comment, plus a couple of more months for comments on the comments. Jiminy Cricket on a crutch! This net neutrality is such a simple concept that’s getting distorted all to hell, and we’ve got six more months of the same.

Let’s take the incumbents out of the picture for a minute. Hard as it is, pretend for a little bit they don’t exist. Ok, now that you can hear yourself think, let’s go over what was said yesterday.

The FCC believes we need Net neutrality rules. These rules would codify six principals that say the couple of hundred million or so U.S. citizens who access the Internet won’t be discriminated against in terms of what they can access (within legal boundaries) and the devices they use to access it. These rules also would require any entity that provides public access to the Internet to be open about how they manage the data passing through their respective domains.

Click here to read the rest

What are your thoughts on net neutrality, specifically, the merits of the issues being presented in the debate?

The Business Case for Longmont, CO’s City-Owned Broadband

Longmont, CO has the opportunity to launch itself squarely into a digital communications leadership position among U.S. cities. IF its citizens can beat back the latest attack from the Evil Empire, in this case with Comcast in the role of Darth Vader, and the storm troopers crouched in a hastily conceived vehicle called No Blank Check.

The set up here is simple (cue  serene music, pop up panoramic of sleepy bedroom community). Longmont is a forward-looking community, as typified by being declared an “All-America City” by the National Civic League in 2006, a recognition for communities whose citizens work together to identify and tackle community-wide challenges and achieve uncommon results.

One such achievement was to build a fiber network several years ago. Unfortunately in that period (cue sinister music), the Emperor’s senate allies in the state legislature passed a law that requires communities to get voter approval before they can run a network service.

Longmont, feeling their best interests lie in riding the current broadband push, put a ballot measure up for next month (segue to brassy Jedi music). In a stroke of serendipity, the city’s local WiFi provider recently defaulted on mondo tax payments, so the City took over the network until they can decide how to make this resource work for them. This gives the city a great one-two broadband punch capability.

But wait! (you guessed it – cue sinister music, heavy DV breathing) Once the ballot measure was approved over the objections of the local Comcast lawyer, said lawyer starts No Blank Check, a “citizens” group to save Longmont from the fiscal ee-vil of the Jedi, eh, city-owned broadband. Colorado Cable Telecommunications Association’s promptly pours $150,000 into the group, and away we go with the usual campaign of distorted facts, twisted logic and baseless fear mongering. 

Striking back at the Empire

Let’s put the Empire’s negative PR machine in its place. 

The argument that, by default, all governments cannot run effectively a broadband network service is totally false. Dozens of towns, counties and regions efficiently operate networks that are financially sustained through services sold to local governments, businesses, medical facilities, educational institutions and individual and residential subscribers.

 The name “No Blank Check” is a joke! It’s implication is that cities risk fiscal irresponsibility by investing in broadband. First, the ballot measure gives Longmont the freedom from the state’s anti-muni network law so they can assess the most sound course of action, and then be in a position to act on that if this is what citizens want to do. That means due diligence, needs analysis and stakeholders’ buy-in, the antithesis of random spending.

Second, there are enough examples of muni-run networks improving government operations, reviving local economies, enhancing education for youths and adults alike and advancing telemedicine to where this isn’t a crap shoot. Community broadband is good business and sound public policy representing a responsible investment of taxpayer dollars.  

Incumbents like Comcast claim muni networks create an un-fair playing field. If I ran a bezillion-dollar company and a small town of 48,000 such as Wilson, NC with no prior technology business expertise, built a network 10 times faster than my best offering, I’d be embarrassed. What’s unfair is Comcast, after repeatedly failing to adequately serve the broadband needs of the community, will spend big bucks to subvert the will of a community that is able to do what the incumbents can’t or won’t.  

Incumbent astroturf groups like No Blank Check claim city-run networks are not profitable. But this plays on emotion rather than the reality that community networks don’t have the same profit metrics as incumbents. Wilson’s network is working towards a 12-year return on its investment. Incumbents can barely  think beyond a quarterly ROI. Many community networks exist to break even on operating costs, the infrastructure investment being viewed as similar to paying for new sidewalks or water systems. ROI comes from the economic development and hard-to-quantify benefits these networks deliver.

Detractors also talk about the failures of municipal wireless as examples of why city-run networks are a bad idea, usually citing Philadelphia, San Francisco, Portland, OR and a few others that folded operations. But what they don’t tell you is that private companies owned and operated almost every city-wide network that failed. Longmont’s WiFi network had two successive private owners and look at the results.  

Government-owned networks have a lot to recommend them. They also demand proper previous planning. But plenty of roadmaps to successful, financially sustainable community-owned networks are out there (here are 10 such networks – http://bit.ly/Ejg6L), so Longmont will have quite a few guiding lights if they can just get the Empire out of the way (segue to triumphant Jedi-in-the-house music).

Gates Foundation Proposal – Linchpin to National Broadband Strategy?

A few days ago the Bill & Melinda Gates Foundation sent analysis data to the FCC postulating that $5 – $10 billion could install fiber networks in most of the anchor institutions (hospitals, medical facilities, schools) in the U.S. The FCC quickly issued a public request for comment to validate the financial and technology assumptions in the Foundation’s analysis.

My strategic mind scooted past the numbers to ponder a question that should always be near the top of people’s thinking on broadband: does wiring 98,400, or 80% of all U.S. anchor institutions, that lack Net access make good business sense?

The premise behind the Foundation’s report – wire of all these institutions first and great things will happen – in my view is a great strategic approach to reap broadband’s promised benefits. It should be the core for our national strategy plan, as well as a central strategic objective for those applying for stimulus grants. In one fell swoop you resolve three critical issues: financially sustaining the network, fostering economic development and generating widespread broadband adoption.

Financial sustainability

The Foundation’s analysis estimates the cost to install fiber in every institution but doesn’t include the costs of keeping it operational. In my assessment, I’m taking their premise and assuming you’re going to build a network business, not just create little islands of fiber access. For one thing, money for ongoing  operations has to come from somewhere. To make that money, communities will do best by integrating their institutions’ fiber cabling into one network if possible.

If your ultimate objective is to create a communitywide broadband network, then these institutions have to become anchor tenants that actually pay for network services, with libraries being the one possible exception (more on their role in a bit). In many underserved rural and urban areas, low population density and/or low income make it difficult to get enough individual subscribers to pay for a network’s operating expenses (OpEx,) even when the network is built mainly on grant money.

If you look at successful networks already in place, anchor tenants collectively produce most of the revenue because each one spends more per month for services (maybe $1,000, $2,000/month or more) to replace older slower communication technologies, and capitalize on new computing technologies. Extrapolating the Gates premise, you boost communities’ main institutions over the big hurdle of broadband buildout with financing, and thus make it easy for them to become anchor tenants. 

It’s important you include local government since it is the mother of all anchor tenants. Some are burdened with so much ancient legacy communication technology, a small town of 84,000 people can justify the network costs because they save $700,000 or $800,000/year replacing that old technology with fiber. You shouldn’t have much trouble building an ROI case here.

Furthermore, local government can build a wireless network on top of the fiber that produces an even greater financial bang for the buck. New York City, Minneapolis, Providence, RI and Oklahoma City are major cities that built or subscribed to citywide wireless networks to run hundreds of mobile government workforce applications and reduce government operating costs.

While it’s true that adding local governments would add to the cost projected in the Foundation report, governments can show a significant return on investment to underwrite their portion of the buildout and the OpEx.

Economic development

Once you have your anchor institutions wired and wireless, they become a catalyst to drive economic development. Santa Monica proved that once a local government and other anchors have a network that’s saving or generating money, it’s less expensive to extend that network to your largest 10 – 12 businesses. Word of mouth sells services.

This network extension builds on itself. As infrastructure goes out to the biggest companies, you attract new businesses looking to move or expand to small towns and rural areas. Network costs stay reasonable so small businesses in rural and urban areas can afford to tap into the infrastructure. Each anchor tenant can build a wireless hub that attracts shoppers and tourists, which impacts the neighborhood’s economic picture.

Broadband adoption

Anchor institutions, particularly when you include libraries in the mix, address one of the more vexing challenges of broadband – getting individuals to subscribe. It can cost hundreds of dollars to win and keep an individual as a subscriber. It’s months before each subscriber becomes profitable. Many people have no interest at all in getting on the Internet.

Rather than bust your rump and your budget chasing after these individuals, leverage the anchor institutions. If each institution provides content, services and applications that enable their constituents to benefit without having to fight traffic, stand in line or sit for hours with a phone locked to their ears, individuals will subscribe to the network.

As part of the strategy for broadband adoption, anchor institutions hold the key, so be creative in structuring relationships with them. Libraries especially hold promise in this area because they already are a central point within communities for people who want to use the Net to do research or hunt for jobs. 

This discussion, of course, may all be for naught if no one can figure out where the $10 billion is coming from to invest in the anchor institutions. I was hoping Bill and Melinda would round up 9 or 10 of their similarly heeled golfing buddies and put together a broadband investment group. But none of the press articles indicated any such luck. It may be hard to get a second chunk of change out of Congress on the heels of this $7 billion, but stranger things have happened.

For the moment, we can speculate as to the possible sources of funding, but at least this is a strategic path that shows promise. What are your thoughts?

Round 1 and 2 NOFA Applicants

Fine-tuning your business plan as you move to next stage of the Round 1 funding process? Getting you plans in order so you can pursue funding in Round 2? I can help you put your best proposal forward. Contact me today (510-536-4522) to get your plan in the winner’s circle!

NTIA Awards First Four Grants for Broadband Mapping

I was almost too giddy to speak. The first four stimulus grant awards for broadband mapping were announced yesterday for the states of California, Indiana, N. Carolina and Vermont. If a majority of the remaining states that receive grants employ similar mapping procedures of these four, NTIA and taxpayers stand to get plenty of bang for their stimulus buck.   

The California Public Utilities Commission (CPUC) gets approximately $1.8 million to collect and verify the availability, speed, and location of broadband across the state, plus $500,000 for the cost of statewide broadband planning activities over four years. The Indiana Office of Technology (IOT) receives approximately $1.3 million.

In N. Carolina the Rural Economic Development Center, Inc. (e-NC Authority) is awarded approximately $1.6 million plus about $435,000 for the cost for broadband planning activities in that state over five years. The Vermont Center for Geographic Information (VCGI) is awarded approximately $1.2 million.

This is a victory of sound mapping processes over the straightjacket of the  conventional wisdom regarding mapping that makes broadband advocates ill. These four awardees were selected because their proposals met or exceeded program requirements in three key areas: data collection, verification and collaboration. In a minute I’ll show how this leads to greater ROI for broadband investments.

The conventional wisdom, driven in large part by incumbent telcos and cable companies, is that you can’t get good broadband mapping data unless service providers (incumbents) give it to you. And because incumbents don’t want to give you the data you need, this mapping process has to be tedious, expensive and nearly void of independent verification. Indeed, when some critics said $50 million is adequate, $350 million was set aside for states to do mapping because of the expense of prying the data loose.   

For seven months, community broadband supporters watched with increasing trepidation as the embodiment of this flawed conventional wisdom, Connected Nation, secured deals to pursue mapping on behalf of states such as Texas, Florida and Minnesota. NTIA’s announcement today indicates that the agency is going to, as much as is possible, fund states that do mapping right.

 Why these award winners matter to community broadband 

I believe that, by selecting these particular four states for initial awards, NTIA establishes the benchmark by which future applications will be reviewed and grants awarded. Other states can view these winning procedures to modify their own proposals. And I believe NTIA will actually push back on those applications that follow the conventional wisdom, again, using the first awardees as the models for what should be.

California and N. Carolina have been at this game longer than most states (I assume the same for Indiana and Vermont as I learn more about them). Early on they rejected the notion of relying solely on service providers and have been collecting data from other sources, including directly from constituents through telephoning and in-the-field surveys. You cannot collect more accurate data than when you go straight to the people who do or don’t have broadband. N. Carolina plans to use Web and GIS tools to collect additional extensive data in a process they expect to be effective and surprisingly inexpensive.

Verification is critical to a superior mapping strategy and subsequent broadband deployment. The lack of independent verification leads to situations such as you have in West Virginia. Connect West Virginia (Connected Nation) produced a map showing 90%, 95% broadband penetration while the state ranks nearly last among U.S. states for broadband adoption. NTIA’s awardees will use multiple methods and independent verifiers to conduct data verification work. 

Collaboration is the third important ingredient for mapping success. The four awardees are pulling together state and local partners to execute the mapping exercise with maximum efficiency and minimizing some of the process implementation costs. Unlike the incumbents that shroud all of their data in non-disclosure agreements, these collaborative efforts create for the public a true, comprehensive picture of broadband availability.

When states use what e-NC Authority’s Ex. Dir. Jane Smith Patterson refers to as a multi-modal broadband data collection, you get better-detailed, accurate maps. This in turn enables you to make decisions that lead to (hopefully) the most appropriate broadband technologies going into appropriate communities in a way that yields the best results for your broadband investment. 

Ultimately, these state maps will be woven into a national broadband map that should be the cornerstone for the FCC’s national broadband strategy. I don’t expect that all state maps will be perfect, though I may bet you beer that my state’s map (CA) will be better than your state map. I’m sure some mapping awards will make me want to wretch. But I do have greater confidence in getting a decent number of high-quality maps than I did a couple of months ago. 

 Shout out

I have to send a special shout out to e-NC Authority. Here is a state agency that in July of this year was sold down the river in favor of Connected Nation by some of its own state legislators (at the behest of AT&T). You can read the ugly details here. Luckily for the good guys and gals, the state’s governor wasn’t swayed. She gave the nod to e-NC to represent and go after the NTIA grant.

I talked to Ms. Jane on the phone soon after I heard the news about the award and my office lit up from her smile. She and her team’s worked hard since 2001 developing good broadband maps. They had to fight naysayers, AT&T obstruction, serious budget cuts and treacherous political hacks (but I repeat myself), yet they came out on top. Karma rocks! e-NC won’t be gloating, though. They’re already working towards making their stimulus fueled project a model for the nation, then having NTIA and RUS come on down for some southern hospitality and technology showcasing.

I’ll be writing more about these states and their respective efforts in a week or so. Stay tuned.

A Little Self-Promotion Always Helps

If you’re planning to build a community broadband network, call me (510-536-4522) or e-mail. I have a ton of knowledge that can help you create a great plan, write a great NOFA app and implement your plan.

Time to Rummmmmble for Net Neutrality!

Who’d a thunk it. The next big broadband flashpoint appears to be net neutrality. Incumbents and their lobbyists have gone ballistic, with rhetoric that went from 0 to High Moral Outrage within a day. Friday the Republican Congressional leadership went directly to the President’s doorstep to complain about net neut, so that means some hum dinger political fireworks are likely in the offing.     

I threw in my first commentary on the topic in the mix last week.

Hearing all the bluster from big incumbents about how unfair net neutrality rules are and how much they contribute to the demise of innovation, methinks “The lady doth protest too much.” Underneath their pushback is the underlying threat that, without incumbents’ support, these rules are DOA.

The giants put a similar fine whine out on the table when they didn’t apply for broadband stimulus grants. But alas, they were “full of sound and fury, signifying nothing,” as 2,200 applications poured in from others stepping into the breach. There are plenty of local governments and smaller service providers that can profitably build networks and offer Internet services that consumers and businesses want, and without being tripped up by net neutrality.

If you look at history, it’s often been small, initially anonymous companies that drove technology innovation, creativity and competition. The biggest companies were often the slowest to innovate but the fastest to obstruct, if not outright kill innovation. (You can read the rest of this Fierce Broadband column here)

You’re going to read a lot about net neut in the upcoming weeks. One of my contacts at the Benton Foundation mentioned how surprised he was at all the media coverage, saying you don’t usually see this much until after the FCC has made rules, not when they’ve just proposed some.

My main take on things is that those of us who support community broadband need to get on the stick and pushback on all this incumbent noise. If they are allowed to discriminately throttle content on the Internet based on their financial self-interests, broadband advancement in the U.S. is hosed. 

As David Isenberg says on his blog

Network Neutrality has never been about the idea of too much bandwidth on a limited network. That’s dinosaur feces. It’s always been about whether the telcos and cablecos could leverage ties between their network and certain apps to make discriminatory, anti-competitive profits.

The strength of the Internet is that it accepts all traffic without a “will it make money” test. That’s why a Pez dispenser collector could grow a hobbyist site into eBay. It’s how two Stanford students could grow their thesis into Google. It’s how an Israeli apps company that wanted to reduce its phone bill invented Internet telephony….the reality is that if we ever say “Goodbye Net Neutrality” we’ll also be saying, “Goodbye Internet.”

Check out David’s blog. Be sure to scroll down to “Making Network Neutrality Sustainable, Revisited” This post isn’t as long as it seems and it’s very good.

At every opportunity, we have to call the incumbents on their silly allegations, fear mongering and distortions of reality. Here’s a good write-up on debunking industry talking points.

Needless to say, the road to net neut is going to be a rough one, long and definitely winding. As one of my more cynical media contacts Karl Bode stated, “At this point, I’ll believe any real, tough consumer-friendly rules coming from Uncle Sam when I actually see them. Just too many lobbyists, too few consumer advocates.” Luckily, Karl gets past (or harnesses, depending on your take) his cynicism occasionally to write some real scathing push-back pieces – and doesn’t mind if you quote him.

Tying all this back to the broadband stimulus program, this month NTIA/RUS have opened the doors via an RFI soliciting feedback on the NOFA rules. Get over there and put your two-cents in. Be sure that top of your list is “keep net neut in the NOFA!!” If incumbents won’t play in the stimulus sandbox, tell them to get out of our way! We’ve got business to attend to.

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