Broadband Stimulus Opportunities


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Overview presenttaion on $7.2 billion Broadband Stimulus program and consulting services available from Grant Consulting, Inc. to assess stimulus opportunity, create viable economic model, and assist service providers and other entities successfully apply for and win government broadband program dollars

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Broadband Stimulus Opportunities

  1. 1. Broadband Stimulus Opportunity Review Grant Consulting, Inc. Philip B. Grant, PhD March 17, 2009
  2. 2. Broadband Stimulus Program --NTIA (Dept. of Commerce) --RUS (Agriculture Dept.)
  3. 3. Broadband Stimulus Program --NTIA (Dept. of Commerce) --RUS (Agriculture Dept.)
  4. 4. Overview <ul><li>The U.S. Broadband Stimulus Program is a $7.2 Billion initiative contained within the $787 Billion American Recovery and Reinvestment Act </li></ul><ul><li>Intended to accelerate broadband penetration in the U.S. with a focus on unserved and underserved areas and user segments </li></ul><ul><li>Funding split across Dept. of Commerce [NTIA] ($4.7 Billion) and Agriculture Department [Rural Utilities Service] ($2.5 Billion) </li></ul><ul><li>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. </li></ul><ul><li>$350 Million carveout for development of broadband database </li></ul>
  5. 5. 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
  6. 6. 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
  7. 7. 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
  8. 8. National Telecommunications and Information Administration (NTIA)—Dept. of Commerce
  9. 9. National Telecommunications and Information Administration (NTIA) Broadband Stimulus: Eligibility <ul><li>Recipients may include: </li></ul><ul><li>Government </li></ul><ul><li>Public-private partnerships </li></ul><ul><li>Non-profit organizations </li></ul><ul><li>Private companies (e.g. communication service providers) </li></ul><ul><li>Infrastructure companies </li></ul><ul><li>Consortia/others </li></ul>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.
  10. 10. 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 <ul><li>Undertaking other projects approved by NTIA </li></ul><ul><li>Constructing and deploying broadband facilities that improve public safety broadband communications services </li></ul><ul><li>Facilitating access to broadband service by low-income, unemployed, aged, and otherwise vulnerable populations </li></ul><ul><li>Ensuring access to broadband service by “community anchor” institutions </li></ul><ul><li>Constructing and deploying broadband service-related infrastructure </li></ul><ul><li>Acquiring equipment, instrumentation, networking capability, hardware and software, digital network technology, and infrastructure for broadband services </li></ul>
  11. 11. NTIA Funds Award Criteria <ul><li>Rules issued first, followed by RFPs </li></ul><ul><li>Awards must be made by Sept. 30, 2010 </li></ul><ul><li>Series of public information sessions to be held starting March 2009 </li></ul><ul><li>Initial program defined as grant only not loan </li></ul><ul><li>Grant my cover up to 80% of project cost </li></ul><ul><li>One grant per State “if practicable” </li></ul><ul><li>Coordination with FCC/RUS </li></ul>Criteria/Process Priority to Projects <ul><li>Unserved areas </li></ul><ul><li>“ Underserved” areas and populations </li></ul><ul><li>Enhance healthcare, education, service to children, e.g. will projects “enhance healthcare delivery” </li></ul><ul><li>Greatest broadband speed to the greatest population in geographic area </li></ul><ul><li>Increased affordability and adoption </li></ul>Source: Hogan & Hartson; NTIA March Webinar; FCC; Pillsbury Winthrop Shaw Pittman;
  12. 12. Broadband Stimulus Grants/Funding Timing NTIA and Rural Rural Utilities Service (RUS) Rapid cycling of grant funding awards with completion by September 2010. <ul><li>Funds must be “obligated” by September 30, 2010 </li></ul><ul><li>No specification on buildout date </li></ul>RUS <ul><li>Multiple public meetings initiated in Washington DC and planned around the country </li></ul><ul><li>Coordination with RUS; FCC and other stakeholders </li></ul><ul><li>NTIA consulting with the States </li></ul><ul><li>Grants must be awarded by Sept. 30, 2010 </li></ul><ul><li>Substantial completion of projects within two years after grant </li></ul>NTIA
  13. 13. Rural Utilities Service (RUS)—Dept. of Agriculture
  14. 14. Rural Utilities Service: Background <ul><li>RUS currently administers three programs related to broadband deployment and improving the availability of broadband service to unserved areas </li></ul><ul><ul><li>Telephone infrastructure loan program </li></ul></ul><ul><ul><li>Rural Broadband Access Loan Program </li></ul></ul><ul><ul><li>Community Connect Grant Program </li></ul></ul><ul><li>The existing programs (listed above) may serve as a model for the AARA Broadband Stimulus program ($2.5 Billion) </li></ul><ul><li>Entities serving more than 2% of U. S. telephone lines are not eligible for RUS programs </li></ul>
  15. 15. 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 <ul><li>Communications service providers serving more than 2% of U.S. telephone lines excluded </li></ul><ul><li>Individuals and partnerships ineligible </li></ul><ul><li>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 </li></ul><ul><li>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 </li></ul><ul><li>Under the RUS Rural Access Loan Program eligible applicants are legally organized entities providing or proposing to provide broadband in eligible rural communities </li></ul>
  16. 16. RUS Recent Example: Open Range Communications <ul><li>Open Range Communications: Start-up wireless broadband service provider; Founded 2004; Greenfield CO HQ </li></ul><ul><li>RUS Loan Program Type: Rural Development Broadband Loan and Loan Guarantee Program </li></ul><ul><li>$267 million RUS loan announced March 2008 </li></ul><ul><li>$100 million private equity commitment from JPMorgan Chase </li></ul><ul><li>Business Plan: broadband internet and voice service over licensed spectrum to 518 communities in 17 states </li></ul><ul><li>Baseline Broadband Speed: 1.5 Mbps Down; 512kbps Up </li></ul><ul><li>Targeted customer base (within 5 years): 447,000 </li></ul>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
  17. 17. Broadband Stimulus Consulting Project
  18. 18. 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 <ul><li>Business model development </li></ul><ul><li>Key financial drivers validation </li></ul><ul><li>Sustainable P&L modeling </li></ul><ul><li>Scenario assessment </li></ul><ul><li>Base case financials to support winning application </li></ul><ul><li>Development of compelling application narrative and supporting rationale </li></ul><ul><li>Writing/revising working review draft </li></ul><ul><li>Construction of final submission narrative and supporting financials </li></ul><ul><li>Application production and submission </li></ul><ul><li>Viable business model development </li></ul><ul><li>Market opportunity assessment </li></ul><ul><li>Key success factors review </li></ul><ul><li>Strategic options development and ranking </li></ul><ul><li>Competitive review </li></ul><ul><li>Geographic “mapping” </li></ul><ul><li>Technology and service delivery assessment </li></ul>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.
  19. 19. Introduction: Grant Consulting/Phil Grant General Industry Experience Functional Expertise <ul><li>25 years experience in technology and communications industry </li></ul><ul><li>Executive positions at CBS, GE, MCI, Bell Atlantic </li></ul><ul><li>Former Enterprise Market Group Product Manger ($1.8 Billion Revenue) </li></ul><ul><li>Founder and President of independent consulting and strategic advisory firm (1997-Present ) </li></ul><ul><li>A.B (Notre Dame); M.B.A (Boston University) ; PhD (University of Pennsylvania) </li></ul><ul><li>Business Development </li></ul><ul><li>Program Management </li></ul><ul><li>Product Management </li></ul><ul><li>Strategy Consulting </li></ul><ul><li>New Technology Management </li></ul><ul><li>Early-stage Project Management </li></ul><ul><li>Technology Evaluation and Commercialization </li></ul><ul><li>International Business Development </li></ul><ul><li>Wireline Telecommunications </li></ul><ul><li>Fixed Wireless/WiMAX </li></ul><ul><li>Next-generation Cellular </li></ul><ul><li>WLAN </li></ul><ul><li>Health Information Technology </li></ul><ul><li>Satellite </li></ul><ul><li>Cable TV </li></ul><ul><li>Video to the Handheld </li></ul><ul><li>IP/Internet Services and Infrastructure </li></ul><ul><li>International Telecommunications </li></ul><ul><li>New Media/IPTV </li></ul><ul><li>Digital Audio Broadcasting </li></ul><ul><li>Hybrid Satellite/Terrestrial Networks </li></ul><ul><li>Enterprise Software </li></ul>
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