Will Your 2014 Broadband Strategy Embrace Multi-Dweling Units? (pt 1)

As economic development pros and others develop strategies for using broadband to boost their local economies, here’s one strategy you should consider that can achieve this goal PLUS increase the financial strength of the network. Are you selling owners of commercial multi-dwelling units (MDUs) on being anchor tenants of the network?

Analyze Santa Monica, CA’s execution of this strategy so you can repeat their success. The City of Santa Monica’s IT Department built its initial fiber network infrastructure in 2004 primarily to replace the city government’s aging data and voice communication networks, saving $750,000 in the first year. Then they discovered offering services to local businesses attracted new companies and jobs.

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The “Building the Gigabit City” National Tour

Longmont, CO’s point person for the city’s gigabit buildout, Vince Jordan, recently said he gets lots of calls from Colorado communities asking how to move forward with similar networks. His observations inspired me to create a special training program to give communities the building blocks to replicate U.S. gigabit success stories.

As those billions of stimulus dollars in middle mile network buildouts nationwide begin lighting up, communities are realizing a whole lot of work is still required to get actual Internet services into their neighborhoods. Quite a few also are realizing they don’t know quite how to plan or pay for these communitywide last mile networks.

So my program is a full-day, roll-up-your-sleeves-and-work event limited to 20 jurisdictions max, and broken down into five sessions. Each session, addresses a specific skill set, and is tailored to local issues and addressing attendees’ feedback I gather from pre-workshop questionnaires and worksheets.

The key element is the consulting. My advice is customized to workshop attendees’ questions and needs. Attendees build skills in implementing key tasks necessary for moving broadband projects forward. My book, Building the Gigabit City, continues the skills development by expanding on lessons learned during the workshop.

Sessions overview

  1. Recruiting key community stakeholders
  2. Effective constituent data gathering and needs assessments
  3. Assessing business models and funding options
  4. Finding the “one thing”
  5. Marketing strategy and tactics

This is the initial list of cities where the training sessions will take place. If your state’s not included, call me: 510-387-4176.

There are also sponsorship opportunities for companies that want to participate in a unique marketing outreach program targeted to decision makers ready to move broadband projects forward.

Your Broadband Education Straight from the Source

Nowhere else on the Web can you find such a complete source of first-hand broadband project management and policy experience. And this knowledgebase grows weekly.

Last August I launched Gigabit Nation, the only radio talk show devoted to broadband, and have amassed quite a treasure trove of excellent insights as well as advice from people immersed in broadband projects and policy. Over 60 hours of interviews with public, private and nonprofit sector leaders who are getting broadband done.

Below is just a sampling of Gigabit Nation interviews. Go to the show’s Web site to get the complete list of archived shows. And don’t miss my upcoming shows. There are new guests and new topics every week. Tell your friends.

[Take this 5-minute survey to influence topics for future shows]

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The Middle Mile/Last Mile Disconnect

Last Thursday Washington, DC announced they’re powering up a 100-gig network, funded in large part by broadband stimulus money. If I’m not mistaken they’re the only urban area to get money for an infrastructure project. That’s kind of a pity since urban areas have some pressing infrastructure needs that get ignored by the media. But more on that in a future post.

This week I tackled another challenging issue represented by the DC deal that gets ignored by much of the media, and probably policymakers as well. What do you do about connecting all of these middle mile projects to last mile (or first mile, as my UK friends regularly remind me) projects? Huh. You say you haven’t heard about a lot of projects connecting consumers and businesses to those stimulus-funded middle mile buildouts? That’s my point.

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After the Stimulus, Now What – Sound Marketing Maybe?

Last Monday I participated in a Broadband Breakfast panel in DC that examined the effectiveness and shortcomings of the broadband stimulus program. It was a pretty good session since there was one person representing a winning project team and one whose team did not come away with an award. Charles Benton, head of the Benton Foundation, and I represented the thought leader crowd.

We each evaluated the program, which yielded a couple of B’s, a couple of A’s and a C. I gave a high grade for intent and good execution considering the near-impossible task NTIA and RUS faced, but C+ for uncertain results in the communities since I’m not sure how many of these awards are going to pan out.

In further Q & A, there were feelings expressed by most of us that the crop of awardees could produce a mixed bag of wins and losses. However, we all offered advice on what communities everywhere can do to move broadband forward, whether or not they won stimulus money or submitted to outlandish craziness in order to snag Google gigabit gold. You can watch the event here. It’s well worth the time.

One crucial “where do we go next?” answer is marketing. Everyone who’s involved in broadband needs to come to grips with this realty – if you can’t mount an aggressive, creative marketing campaign with a strong PR component, you’re hosed.

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NOFA 2 Lessons from a Round 1 Winner

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As everyone scrambles to make one last charge into broadband stimulus history – for better or worse – here’s a hopefully helpful post to give you at least a tiny edge in your pursuit of the gold.

I decided to profile stimulus grant winner Tad Deriso, President & CEO of the Mid-Atlantic Broadband Cooperative in Virginia, in part, because his group is the self-proclaimed “square peg in a round hole.” MBC is a co-op of private-sector-only companies, they didn’t form a public-private partnership, they’re a middle mile project not targeted to all the usual suspects and they challenged NTIA/RUS’ definition of underserved. Yet they still come out ahead.

Let’s see what we can learn from this slightly odd duck in the winner’s circle. Many of Tad’s comments pertain to the due diligence process, but understanding how they navigated this process offers some insights on where to tighten up your proposal.

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NOFA 2 – It Does Matter How You Say It

I listened to the NTIA/RUS workshop in Denver as these folks spelled out what makes for a good grant application, interpreted rules, etc. My ears perked up when they started on why projects got rejected. Specifically, when they explained that, for apps to get graded well in the Purpose (of the proposed network) category, “you have to be compelling, credible and clear.”

There have been some bitter and justifiable commentary about the first funding round, it’s lack of transparency in key areas and the lack of feedback throughout the process. I’ll add my 2 cents on this, but since the agencies gave some specific feedback, albeit in a general audience rather than to specific applicants, I want to jump on the key lessons.  

Months ago I wrote a column on how vital it is for you to write a really outstanding mission statement and executive summary. I believe readers thought I was loony giving them writing tips while they were trying to sort out engineering issues, 122-pages of hell and other seemingly more important issues.

Listen up folks! This is important. Today’s workshop spent significant time relating how reviewers rejected apps right off the bat – before due diligence – because of what was said, not said or how it was said. I point you later to a document with advice you probably want to heed. But first, a summary from the people who hold you future in their hands about what can kill your good, even great, idea for a network.

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Eliminate Weeks from Your NOFA 2 Prep Time!

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Some of you have followed my blog for months and know I’m pretty spot-on with my assessment of the broadband stimulus terrain, and broadband strategy in general. I bring this expertise to my evaluations of the few 3rd-party services I select to complement mine. Here are two that pass the test.

Eliminate weeks of the most time consuming and tedious work needed to complete the roughest part of the NOFA application with ID Insight and RidgeviewTel services. These services also increase the accuracy and impact of your application plus help you build a sustainable broadband network after you receive funding.

ID Insight’s BroadBand ScoutSM pulls details from millions of online retail transactions nationwide to enable you to determine broadband penetration down to the census block on connection type (broadband, dsl, cable, dial-up, etc.), data speeds and carriers. Give us the names of counties in your proposed service area, and we deliver the data for you to create or verify broadband coverage maps.

RidgeviewTel adds your BroadBand Scout data to their dBOSS Broadband Network Management Platform to:

  • aggregate the majority of necessary data NOFA 2 requires; 
  • format the data for GIS systems to visually render locations on a map;
  • apply the data through imaging and layering of the various data to create maps of broadband usage, unserved areas, RF propagation and the number of potential customers per mile for fiber networks; and
  • return the NOFA-required data to you in the formats needed to upload these files directly to NTIA’s and RUS’ NOFA application servers

Successful.com facilitates the logistics between you and both companies, provides valuable analysis services if needed and ensures that everything is in order when you submit your application. You can purchase our services together or a la carte.

E-mail or call us today (510-536-4522) for more details. March 15 isn’t that far away.

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!

“Incumbents Do Not Have a Veto!”

With those words, Asst. Sec Lawrence Strickling, head of NTIA, enables many applicants and others worried about the NOFA’s incumbent challenge clause breathe a little easier. And for those of us who’ve railed against this potentially destructive clause , there is also a bit of satisfaction for not giving up the fight.

Mr. Strickling and Jonathan Adelstein, Administrator for RUS, were responding to questions from the House Subcommittee on Communications, Technology & the Internet when Congresswoman Anna Eshoo (CA) pushed for answers about the clause. “I want to make sure there’s competition. If the incumbents can just knock out people because they don’t want any to come in, I don’t really think that’s the way for us to go.” (gotta love our Calif Congressional delegation)

Mr. Strickling gave a reassuring response from both gentlemen and a clearer picture of how this process will run.

Applications with infrastructure proposals have proposed to cover areas where there isn’t broadband coverage. Maps are being generated for these areas through a publicly accessible database so you can see the proposed coverage area. During the review period anyone, including incumbents, can submit a message on the site saying they agree or not that the areas currently are not receiving adequate broadband.

Because applicants had to provide detailed information to justify their claim that these areas need broadband, “incumbents have to provide a lot of information to overcome the presumptions that have been established by the applicants.” NTIA will evaluate the challenge if it feels the challenge and supporting material throws the proposal into dispute, but NTIA and not the incumbent will have final say in determining whether the app moves to final review.

Mr. Adelstein added, “We will demand real substantiation with any challenge. But also, we want to be sure that what applicants present is accurate. Claims have to be verified and substantiated.” Furthermore, RUS has over 400 offices across the U.S. and they will send people into the field to areas that incumbents challenge to test and assess the validity of any challenges.

Where does that leave us?

This isn’t a final knockout blow to the clause. Yet there is cause for some joy here.

First, NTIA/RUS is giving applicants the high ground and the presumption that you hold an unassailable position. The burden of proof to the contrary lies with the incumbent. If you’ve done your homework, and are continually gathering whatever data you can to reinforce the fact that people in your proposed coverage area don’t have adequate broadband, you can better fight off any challenge.

Second, political pressure matters here. When members of Congress such as Rep Eshoo say to NTIA/RUS they’re not going to be happy if they see proposals in their districts knocked out by incumbent challenges, you better believe this becomes a factor. Same holds true if governors start making phone calls. The Congressional and gubernatorial cards are in play.

Third, this challenge process will play out in a fishbowl. If, for example, incumbents are required to submit details on actual speeds delivered to make their case, there’ll probably be few challenges. Incumbents don’t want it proven in such a public fashion just how big the gap is between what’s advertised and what’s delivered. Can you imagine the kind of fallout that would generate?

Fourth, you can run a preemptive counter-challenge in thi fishbowl. Anyone can post a challenge on the Web site. But that means anyone can post a note saying “I live here and let me tell you how bad coverage really is.”

So what you do is round up a whole passel of people around computer in the libraries, community centers, the schools, and get their comments. Be sure they submit enough of the right information, such as address, who the incumbent is, etc. so their comments carry weight.

What can we expect?

In the end, everything comes down to how detail-y is NTIA/RUS’ definition of “substantiation.” I think any mid-sized incumbent will be hard pressed to respond if they have to do a lot of legwork in a short period of time (2 or 3 weeks) because they don’t have a lot of staff.

For the bigger ones, such as Verizon and AT&T, a lot depends on the specific requirements for making a challenge. Remember, these folks didn’t apply in the first place because they don’t want to open their kimonos for public inspection.

Another factor is whether or not the applicant can rebut the challenge. With the amount of work a lot of applicants have presented to make their case for an area not being served, incumbents have to realize they’re at a disadvantage. I think incumbents would fear the publicity of losing a public counter challenge, so in this case there would be few challenges.

On the flip side, if these public statements from NTIA about requiring lots of substantial are mostly posturing, and the eventual required data to make a challenge is minimal (i.e. presenting only advertised speeds), then all bets are off. Skimpy requirements will likely lead to lots of challenges. I’m banking on stronger.

Either way, your work is not yet done young warriors.

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