Broadband Stimulus Opportunities

Broadband Stimulus Opportunity Review Grant Consulting, Inc. Philip B. Grant, PhD March 17, 2009

Broadband Stimulus Program --NTIA (Dept. of Commerce) --RUS (Agriculture Dept.)

Overview
The U.S. Broadband Stimulus Program is a $7.2 Billion initiative contained within the $787 Billion American Recovery and Reinvestment Act
Intended to accelerate broadband penetration in the U.S. with a focus on unserved and underserved areas and user segments
Funding split across Dept. of Commerce [NTIA] ($4.7 Billion) and Agriculture Department [Rural Utilities Service] ($2.5 Billion)
Program creates significant opportunities for communications industry: communications service providers; hardware and software infrastructure; backhaul and wholesale suppliers; advanced wireless system integrators; CPE/end-user equipment etc.
$350 Million carveout for development of broadband database

Context: U.S. Broadband Penetration Significant U.S. broadband penetration growth, but the U.S. lags other innovation-driven economies and geographic coverage, speed/capabilities, and affordability remain issues. Source: Pew Internet & American Life Project

American Recovery and Reinvestment Act (ARRA) Broadband Stimulus Funding Mix The Dept. of Commerce’s NTIA unit will administer 65% of Broadband Stimulus funding. 100%=$7.2 Billion

NTIA Broadband Stimulus Program Breakdown 80% of NTIA stimulus funding targeted to extending broadband service delivery to unserved and underserved geographies and customer segments. 100%= 4.7 Billion $ Mil

National Telecommunications and Information Administration (NTIA)—Dept. of Commerce

National Telecommunications and Information Administration (NTIA) Broadband Stimulus: Eligibility
Recipients may include:
Government
Public-private partnerships
Non-profit organizations
Private companies (e.g. communication service providers)
Infrastructure companies
Consortia/others
Potential Applicants Satellite RLECs National Wireline Backhaul Providers Utilities Associations 8 a Firms Cable Fiber Data Centers Hosting Firms Fixed Wireless Wireless Infrastructure Wired Infrastructure Hardware/CPE Other Etc. Broad array of applicants and participating entities in Broadband Stimulus program.

NTIA Broadband Technology Opportunity Program (TOPs): Allowable Funding Use Summary The NTIA TOPs program targets multiple allowable uses with diverse objectives as well as implied program “mandates”. ARRA; Pillsbury Winthrop Shaw Pittman Feb. 2009 Advisory note
Undertaking other projects approved by NTIA
Constructing and deploying broadband facilities that improve public safety broadband communications services
Facilitating access to broadband service by low-income, unemployed, aged, and otherwise vulnerable populations
Ensuring access to broadband service by “community anchor” institutions
Constructing and deploying broadband service-related infrastructure
Acquiring equipment, instrumentation, networking capability, hardware and software, digital network technology, and infrastructure for broadband services

NTIA Funds Award Criteria
Rules issued first, followed by RFPs
Awards must be made by Sept. 30, 2010
Series of public information sessions to be held starting March 2009
Initial program defined as grant only not loan
Grant my cover up to 80% of project cost
One grant per State “if practicable”
Coordination with FCC/RUS
Criteria/Process Priority to Projects
Unserved areas
“ Underserved” areas and populations
Enhance healthcare, education, service to children, e.g. will projects “enhance healthcare delivery”
Greatest broadband speed to the greatest population in geographic area
Increased affordability and adoption
Source: Hogan & Hartson; NTIA March Webinar; FCC; Pillsbury Winthrop Shaw Pittman;

Broadband Stimulus Grants/Funding Timing NTIA and Rural Rural Utilities Service (RUS) Rapid cycling of grant funding awards with completion by September 2010.
Funds must be “obligated” by September 30, 2010
No specification on buildout date
RUS
Multiple public meetings initiated in Washington DC and planned around the country
Coordination with RUS; FCC and other stakeholders
NTIA consulting with the States
Grants must be awarded by Sept. 30, 2010
Substantial completion of projects within two years after grant
NTIA

Rural Utilities Service (RUS)—Dept. of Agriculture

Rural Utilities Service: Background
RUS currently administers three programs related to broadband deployment and improving the availability of broadband service to unserved areas
Telephone infrastructure loan program
Rural Broadband Access Loan Program
Community Connect Grant Program
The existing programs (listed above) may serve as a model for the AARA Broadband Stimulus program ($2.5 Billion)
Entities serving more than 2% of U. S. telephone lines are not eligible for RUS programs

RUS Broadband Funding Award Criteria Previous RUS programs have put a high priority on service areas with the greatest economic need and “rurality” Source: RUS; Wiley Rein
Communications service providers serving more than 2% of U.S. telephone lines excluded
Individuals and partnerships ineligible
At least 75% of the area served by projects must be in rural areas ‘without sufficient access to high speed broadband service “ as defined by the Secretary of Agriculture
Priority for ARRA-related monies to be given to applicants who are borrowers or former borrowers under Title II of the Rural Electrification Act of 1936
Under the RUS Rural Access Loan Program eligible applicants are legally organized entities providing or proposing to provide broadband in eligible rural communities

RUS Recent Example: Open Range Communications
Open Range Communications: Start-up wireless broadband service provider; Founded 2004; Greenfield CO HQ
RUS Loan Program Type: Rural Development Broadband Loan and Loan Guarantee Program
$267 million RUS loan announced March 2008
$100 million private equity commitment from JPMorgan Chase
Business Plan: broadband internet and voice service over licensed spectrum to 518 communities in 17 states
Baseline Broadband Speed: 1.5 Mbps Down; 512kbps Up
Targeted customer base (within 5 years): 447,000
Open Range Communication’s funding represents one of the largest public-private partnerships within RUS broadband funding to date. Source: Dept. of Agriculture; Open Range Communications

Broadband Stimulus Consulting Project

Turn-key Broadband Stimulus Program Consulting Services PHASE 1: Opportunity Assessment & Options Development PHASE 2: Business Model Refinement and Financial Modeling PHASE 3: Application Development & Submission
Business model development
Key financial drivers validation
Sustainable P&L modeling
Scenario assessment
Base case financials to support winning application
Development of compelling application narrative and supporting rationale
Writing/revising working review draft
Construction of final submission narrative and supporting financials
Application production and submission
Viable business model development
Market opportunity assessment
Key success factors review
Strategic options development and ranking
Competitive review
Geographic “mapping”
Technology and service delivery assessment
Phased and comprehensive consulting services staffed by experienced communications executives aimed at producing a successful application with minimal disruption to continuing day-to-day company operations.

Introduction: Grant Consulting/Phil Grant General Industry Experience Functional Expertise
25 years experience in technology and communications industry
Executive positions at CBS, GE, MCI, Bell Atlantic
Former Enterprise Market Group Product Manger ($1.8 Billion Revenue)
Founder and President of independent consulting and strategic advisory firm (1997-Present )
A.B (Notre Dame); M.B.A (Boston University) ; PhD (University of Pennsylvania)
Business Development
Program Management
Product Management
Strategy Consulting
New Technology Management
Early-stage Project Management
Technology Evaluation and Commercialization
International Business Development
Wireline Telecommunications
Fixed Wireless/WiMAX
Next-generation Cellular
WLAN
Health Information Technology
Satellite
Cable TV
Video to the Handheld
IP/Internet Services and Infrastructure
International Telecommunications
New Media/IPTV
Digital Audio Broadcasting
Hybrid Satellite/Terrestrial Networks
Enterprise Software

Broadband Stimulus Opportunities

by pbgrant on May 21, 2009

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