Funding Broadband by Turning Users Into Investors

Let’s explore a different strategic approach to funding.

In 2009 I came across National Community Development Services, Inc. (NCDS), which specializes in boosting the economic health of communities through a process they term economic development fundraising. The concept is simple, really, and can be applied to broadband projects where one of the main goals is to use the network to improve economic development. Build a financial sustainability strategy based on a campaign to recruit investors for the network.

As I find interesting guests to invite to be on my radio show, Gigabit Nation, I’m finding a theme that keeps recurring in slightly different forms, but with the same bottom line – fund a network by convincing local businesses, not-for-profits and other organizations to underwrite the costs. One variation to that are co-ops, such as the Mountain Area Information Network (MAIN) that I’m highlighting on tomorrow’s show.

We’re not talking investors as a euphemism for “subscribers,” but people who invest more than the price of service in exchange for a piece of the action. This aligns with my position that communities need to treat broadband networks as a business venture.

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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.

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