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October 2009 | Volume 12 / Number 10
Convergence Corner

Broadband Stimulus – The Application Story

As I spoke with a variety of hardware vendors at ITEXPO (News - Alert) West in Los Angeles last month, I got a good sense of what that side of the communications world expects from the broadband stimulus plan, and how it is looking to support customers’ efforts to win funding. But, what I didn’t know was much about the process itself – though, if more than 2,200 applications are any indication, it worked at least reasonably well.

Of course, the funding is being primarily directed toward last mile providers – those that provide connectivity from the backbone to the end users – in underserved areas to provide those communities a new broadband alternative and allow them to become as connected as the rest of the country.

One of the problems that has helped create underserved areas is the difficulty in providing service in heavily forested areas, because the density of trees presents interference with wireless transmissions, as well as other means of delivering broadband. But, because of the need to deploy more infrastructure to account for the natural environment, deploying access networks in those areas often results in an ROI in more than twice the usual four or five years.

“In heavily forested areas you have to put up more equipment, so the cost per user is two to three times what it would be in other areas, making it cost prohibitive,” explains Dr. Dean Cubley, CEO and chairman of ERF Wireless (News - Alert). “The technology is the same, you just have to deploy more densely.”

This is particularly relevant to ERF Wireless, which already provides wireless broadband services to many rural areas in the U.S., and now has applied for about $24.6 million in stimulus funding for a new project in Louisiana and eastern Texas.

“The funding will allow us to expand the rate at which we are providing services, and to go into a few areas that wouldn’t be economically feasible without some additional funding, from a population density standpoint,” Cubley says.

ERF Wireless, with the help of a consulting firm, worked on its application for more than two months, doing the proper due diligence Cubley says is required to put together a proper application, including demonstrating that broadband service isn’t already available from another source.

In doing their preparatory work, providers needed to survey the areas, talk to the local chambers of commerce and local residents to verify a lack of existing sources of broadband. Once they have accomplished that, they still had plenty of work to do regarding the demographics, population, potential customer base, etc. of the areas they are looking to enter.

Though the volume of applications suggests there are likely some that were compiled at the last minute, in hopes of sneaking through for funding, it’s not about simply picking a spot on a map and deciding to offer services there using stimulus funding to cover infrastructure costs – providers have to be intimately familiar with the area in order to complete the application.

Two months or more of background research might, at first glance, seem like a lot, because of the cost and man-hours, but, if successful, the effort will be well worth the return.

“Unless you were prepared to spend some significant dollars putting your application together, you are probably not going to be in a very good position,” said Cubley. “For a $20 to 25 million application, you would probably have to spend upwards of $100,000 putting the application together.”

When you consider the pool of money to be awarded, and the short time period over which the application collection was conducted, the overall process seems to have worked reasonably well. That’s not to say it can’t – and shouldn’t – be improved for the second and third rounds, considering the challenges applicants encountered when actually submitting their applications.

Again considering the total funding allotment, and the future implications for award recipients, you would also expect that the volume of applications should have been anticipated, and the appropriate provisions made. Instead, the submission process became painful for many because of server crashes from the sheer volume being uploaded at once. It took ERF Wireless two days to submit its application – a process that should have taken a mere 15 minutes. That was among the main reasons for the deadline extension, so the hope is that all requisite information was finally received.

That said, the intent of the funding, to deliver reliable broadband access to rural America, with the additional benefit of creating new jobs, is a positive step, and will ultimately deliver a service that otherwise would likely not be available to the residents and businesses in these areas for some time.

“That part, I am all for,” says Cubley. “I just hope the efficiencies of the process don’t eat up a lot of the resources needed to really do the job, and that remains to be seen.” IT

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