I’ve seen two articles this week that address or allude to the amount of money being spent to get more people online. One addresses the efforts spent on broadband adoption efforts – and I hope to talk about that soon. The other talks about federal funding (the 2011 ARRA stimulus funds) to deploy broadband. Specifically Politico looks at the Rural Utility Service (RUS) and investigates what they did wrong as they administered the broadband deployment funds.
What concerns me is that we’re going to throw out the baby with the bathwater!
It’s important to look at history – but at least from my chair, I’m much less concerned about blame as I am about how can we learn from history to make broadband deployment better.
To be fair, there were hiccups. I remember the ARRA efforts of 2011 well. The article points out some strange things at the onset – for example the funds were set up and intended to be decided before the National Broadband Plan came out. The ARRA projects were announced in 2010; the National Broadband Plan was released in March of 2010 – after the applications would have been submitted and certainly then after any criteria would have been developed for the applications. So the funded projects and the National Broadband Plan are not well connected. But as I recall the effort was first and foremost to create jobs immediately. And so the goal was disperse funds. Also there was a congressionally imposed deadline on spending that money – probably related to jobs and less suited to the inherent nature of the projects.
Creating a goal first and funding projects that help reach that goal would have a better way to go. Also that helps set benchmarks to measure success. One complaint in the article was the need for better numbers and measures. Back when the ARRA awards were announced, I know we tracked the Minnesota awards being worth $242,717,516. In fact we crowdsourced a document that detailed the Minnesota awards and assessed the following goals:
- For Last Mile projects – 61,139 Homes, Businesses and Critical Community Facilities Passed
- For Middle Mile projects – 1105 Critical Community Facilities
- For Public Computer centers – 8 New Computer Centers
- For Broadband Adoption Programs, Mapping and Technical Assistance Grants – goals were more project-oriented
Benchmarks help assess the ROI as well as track success toward goals.
Streamline the process.
The article points out that permitting and financing had been problems…
Quietly, RUS killed 42 broadband infrastructure projects that it had heralded only months earlier. The agency rescinded more than $300 million in loans and grants before a single check was written. In many cases, local officials had struggled to finance their share of their networks, or obtain the permits needed to lay new fiber cables or erect new wireless towers.
Google Fiber also notes that streamlining the process makes deployment easier. Predictability and ready access to information make it easier to get the job done and it seems that government funding might have some political pull in streamlining processes. Maybe this is an chance for the left and right hands to talk.
Understand Risk and Embrace it or Don’t
The article talks a lot about risk aversion…
“We put in $2 billion (to the farm bill) to do that,” the senator grumbled to Bush, “but the Department of Agriculture has been dragging its feet.” By making onerous demands on its applicants and keeping them waiting months for approval, Harkin said RUS had managed to leave $1.6 billion on the table.
“I don’t want to sound too cynical,” Harkin told Andrew, “but it almost sounds like the cable companies and the big phone companies have gotten to somebody and said, ‘We don’t want this program to work.’”
Harkin then delivered to Andrew a brief sermon on the mission of RUS: “We were not risk averse when we put telephone lines out to farmsteads and our small towns in America. We knew there was risk in doing that, but we managed it. RUS manages risk. And that is what I am asking in broadband, manage risk. Don’t be so risk averse that you say, ‘We cannot give a loan out there because we want to make 100 percent certain that the company we give it to will not default and will not fail. Some of them will …”
There’s a reason many of the rural communities need financial support – the business case is hard to make to serve areas with low population density, that serve potential customers who are least likely to adopt in terrain that is often difficult. The Minnesota Broadband Fund distributes grants, not loans. As I recall they decided that was more realistic to manage but it also opens the door to serving the areas who might need the funding most over serving the areas that are most likely to recoup costs it might even allow for a sliding scale of public partnership based on likely ROI. That might help support business ventures where/how they need it most to deliver high cost areas.
And what about Lake County?
Finally I have to say something about the Lake County part of the article. It’s interesting to read the recap and to hear how the author seems to attribute many of the problems to the RUS. That may have been one facet. They also ran into barriers with rules with investors, incumbent provider’s allegations, incumbent provider’s tower access and other issues. But they signed up their first customers a year ago. They (like 150 other projects) are hustling to complete construction during their extension to July 31, 2015. And they are now home to some interesting adoption efforts – such as intergenerational tech classes.
Lake County is probably another opportunity to learn – but they are moving forward and fiber has changed the landscape of what they are doing.