Preliminary Analysis: First Batch of Stimulus Round 2 Awards

RUS, NTIA and the White House yesterday held a preliminary conference call to talk about today’s official announcement of the first batch of NOFA 2 (broadband stimulus) award winners.

No doubt the winners are popping champagne corks and started their 4th of July weekend fireworks early. The rest of the applicants and some of the rest of you probably want to get some sort of word on winners so crystal ball gazers can try to predict how the rest of this funding round will go.

I’ll try to help you out a little. Just last week I wrote an analysis of grants RUS awarded for NOFA 1 in case you want to get a little perspective before reviewing our first hint at what NOFA 2 might offer.

The conference call was a little light on detail, so tune in to catch the word from President Obama to get a broader picture of the program’s progress. But here are some highlights.

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Handicapping NOFA 2

The good news is that the new NOFA rules are out. The bad news, if you have Attention Deficit Disorder, is that there are two of them and each one seems as long as the first NOFA rules. But at least there are welcome changes. Here’s an overview and a look at who does well as a result of these. 

First, I think it’s wise to let each group have its own rules. Many of the frustration people have had with the NOFA, Round 1 stem from the rules being a quick blending of procedures from agencies with two different purposes and ways of doing business. That led to the rules contradicting each other in places, or otherwise breeding confusion.

In terms of focus, NTIA is addressing middle mile primarily and this makes sense because it gives NTIA a bigger bang for their buck, allowing them to bring broadband to large geographical areas through each award. Rather than spend time reviewing 30 proposals for $1 million each, better to review one proposal for $30 million. There’s less administrative hassle on the backend where NTIA has to manage each funded project to completion.

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Taking Action on the New NOFA Rules

Welcome to NOFA 2 and the 60-day march through hell (for some) to $4 billion. After Friday afternoon’s sudden delivery of the preliminary set of NOFA rules, I made the comment that it is good that the agencies are going their separate ways. Trying to keep the NTIA/RUS marriage together for the sake of the kids didn’t make sense

Then I looked at draft of the NOFA for NTIA and RUS. That’s nearly 200 pages! My brain glazed over. No wonder they waited until Friday before a 3-day weekend! Then at midnight, I got an e-mail from the New America Foundation with incredibly thorough summaries of NOFA 2 highlighting changes from NOFA 1 and other valuable details condensed into 85% fewer pages. Read the summaries before the actual NOFAs.

Heartfelt thanks to New America are very much in order from all of us trying to slog through all this info. Dudes and dudettes – thank you!!

For my part, since New America breaks down what NOFA 2 is all about, I’m giving you some tips on what to do about these rules so you can get a good proposal across the finish line. There’s barely two months to the March 15 deadline for your proposal, so I’m not prettying this post up. This train’s leaving the station. You can complain to the Fed’s conductors later about whatever injustices you spot.  

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What? Volunteers to Approve $4.7 Billion in Broadband Grants?

Now there’s a headline that’ll give a broadband applicant pause – and the rest of the network project team terminal heartburn.

NTIA unveiled in Boston yesterday they intend to recruit an army of volunteers to make up the panels that do the first round of the review process. This legion of un-paid but patriotic souls will influence whose grant applications make the cut by meeting the basic requirements according to the NOFA rules.

As NTIA let that little one-slide tidbit hit the screen, I gather there was a collective gasp from a majority of the people attending this workshop. The reaction was swift, and it was not positive. RUS, by the way, quickly pointed out that they’re handling the impending application onslaught the old fashioned way by hiring more staff and contractors.

I try not to be overly critical of NTIA because they have an impossible job and most of us wouldn’t want it. On the other hand, this is a pretty surprising revelation that has potential to produce some bad consequences for broadband.  

Get on the horn (e-mail, the phone line they rarely answer, your newspaper) and make your voices heard if you feel this is definitely NOT the way to go. Harold Feld, a fellow broadband activist, said it well – “you want good policy? Then you roll up your sleeves and get ready to fight for it.” I believe we definitely need to ask probing questions about this policy because it raises some doubts for quite a few people.

What were they thinking

Congress authorized a sizeable chunk of money (in the many millions) for NTIA to pay for administrative/logistical tasks. If there is a greater need for quality logistics support, you won’t find it this side of the North Pole.

When last I checked, this is a stimulus bill for creating paying jobs. How the heck can you justify asking people in a crappy economy to work for nothing on a jobs-creation project that has money budgeted to pay for the work these volunteers are being asked to do? But set aside the perverse irony for a minute.

You’re about to enter a competitive bidding process with millions of dollars at stake for your community. I think you’d want the best people stimulus money can acquire influencing who the winners are. Did you read the job qualifications required? Jiminy Cricket! NTIA wants people with some serious brain power, which is a good thing. But I feel it’s a reach to expect the best people are going to volunteer for this gig.  

If you have these skills, you’re already working fulltime or you’re looking fulltime for a job that pays you to be this good. In either scenario, you’re likely hoping to cash in on one of these broadband projects that eventually gets funded. The confidentiality and conflict of interest clauses can work against you all around.

Where does this leave the grant-proposing world? Probably with gatekeepers who sorta meet the requirements, were selected on a first come, first served basis and maybe without a lot of serious screening, and are working mostly from home with (according to the impression some workshop attendees got) moderate supervision .

Another thing…

Backtracking to conflict of interest, another concern you want to express to the powers that be is that there appears to be a lack of clarity from NTIA on how they intend to police this. As a practical matter, can you really police this?

I’m at home (hypothetically) reviewing proposals from my state and I don’t particularly like Los Angeles. I could zap every L.A. proposal in random ways and you’d never know. If I gave favorable point awards to a proposal from a vendor or county my best friend works for, would I be in conflict? You betcha! Would NTIA find out, or if they did what are they going to do, withhold my last Attaboy? I’d like to think that paid contractors give you stronger legal recourse to respond to such a scenario.

With this volunteer admin army, are there enough incentives, training time, management skills and oversight capability within NTIA to make these troops sufficiently competent, efficient and reliable to recommend the “A Team” of grant proposals? Would you trust the integrity of the grant process with such an army in place if the answers to all of the above is “no”?

We Got the NOFA. Now Let’s Move Broadband Forward!

It’s time to move this broadband ball forward!

 In my analyst role, I could ponder the winners and losers of the NOFA (broadband stimulus grant rules), or summarize 121 (+ 45 pages on broadband mapping grants) in 900 words. But I’ll let others do that.

In my role (and day job) as a consultant to those who want to put a true broadband network in place post haste, my main thoughts over the weekend focused on how you can get it done. The depth of broadband needs, the insanely short NOFA deadline and weather factors demand some quick, thoughtful decision making. There are two main paths you can take.

For communities that want to build and maintain reasonable control of a blazing fast network that delivers maximum economic and societal benefits for constituents, stakeholders and partners, and start this effort before the winter winds, forget the stimulus. Look no further than Wilson and Salisbury, NC for two communities building networks to deliver 10 mbps [up and down], plus faster speeds for businesses, yet bypassed the stimulus. 

Doug Bergren, an Alderman in Mt. Carroll, IL, said over the weekend “my small town is attempting to go it alone. There is some thought here in Mt. Carroll, IL that it can actually cost LESS to do it ourselves than become part of a big scheme. It’s our objective to get at least the downtown portion serviced by broadband by the end of the year.”

 Chasing the stimulus effectively

 The other path is to do the stimulus dance. Here’s a highlight the practical issues and action steps to give you a strong chance at winning (actually, some of the points here are good for everyone).

First, if you have been planning your network competently since before 2009 and yours is a county or regional effort, you’re practically the only ones with a good shot at first-round stimulus funding. Your biggest task is probably to find the mandated professional engineering firm to sign off on your technology plan, and tweak your proposal to conform to the many NOFA requirements. Though not mandated, still consider getting a similar professional to sign off on your business case and your financials.

Cities and towns pursuing projects solo may want to sit this dance out and wait for Round 2 stimulus funding. Ditto anyone who started planning in March, hasn’t done much partnership development, and doesn’t have a sound business/financial plan completed that’s certifiable by a credible professional services firm.

For this latter group, you have effectively five weeks to fund and secure an engineering firm’s sign off, financial verifications, legal certifications, and other similar tasks, which likely means re-writing or speedwriting chunks of your proposal. That assumes you have a plan capable of meeting the 101 other NOFA tick points. For the soloists, the cards in this first funding round are truly stacked against you. A lot. 

Become the Tom Brown of backtrackers

Second, you better get to backtracking some key elements of your proposal ASAP. If, for example, you heeded hints to create relationships with other Federal agencies to complement funding with their grants for activities such as using transportation projects to lay fiber conduits, you win extra points. But only if you prove these deals are real.

Likewise, if your financial sustainability case rides on community stakeholder support, you have to provide letters or other proof of said support. The NOFA references anchor institutions (anchor tenants for us muni wireless veterans), nonprofits and public safety. You can claim these partnerships, but the devil’s in documenting the details.

Your backtracking had better include verifying who owns what and the rights to what, particularly if your project involves multiple town and county jurisdictions. In many muni wireless projects, network contractors sat with city officials who swore they owned this or that vertical asset. But once projects started, the real owners would be pop up to derail or delay them. You don’t want NTIS/RUS or the governor’s office to discover these things post-submission because your proposal’s chances could sink like a stone.

The catch-22’s 

Third, you have 45 days to solve the following digital inclusion (DI) conundrum. One component of most DI plans is the use of community centers, libraries, churches, etc. as what NOFA calls Public Computer Centers. If you plan to pursue stimulus funding for these, are you ready to dash through the hoops such as providing data on the demographics of people who’ll use the centers, how the centers will market their services, the equipment to be used, etc?

If you find the time limit too overwhelming to write what in essence is a somewhat meaty business plan for each center or the centers collectively, are you ready to show how you plan to fund these resources otherwise? The people creating the NOFA, by virtue of making computer centers a distinct funding area, must believe centers are important. You can’t ignore the centers and how you plan to create, fund and sustain them as well as other DI efforts.

A similar conundrum concerns demand generation (DG). Simply stated, DG is the marketing campaign you need to run to have enough people and organizations use the network to affect economic development, DI and network sustainability. The NOFA asks for innovation, market size, sales projections, cost projections, how the project will create sustainable adoption and how will the program sustain itself.

If your project team finds it to be too daunting – and even too foreign a concept – to complete a full-scale marketing strategy plan as a separate proposal within five weeks so you can get it grant funded, how will your proposal address the execution and financing of DG so your entire network proposal gets funded? Few, if any, proposals without a strong DG plan will fly because DG is the crux of sustainability. Having done plenty marketing plans, I know this is a steep hill to climb. 

I haven’t given you an inclusive list of action items for those wanting to move on their broadband efforts ASAP and worry about the failings of NOFA later. But it’s enough work to keep you busy for the next few days.

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