ARRA BROADBAND FUNDING: The Latest Issues

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ARRA BROADBAND FUNDING The Latest Issues

• Nicholas P. Miller
• May 21, 2009
• Intergovernmental Technology Conference
• Harrisburg, PA

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Program

• Introduction
• Purpose and Permitted Uses
• Eligibility and Priorities Attractiveness of
  your communitys project
• What you should be doing now
• Role of your state
• Other programs of interest
• Help Available

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Your Takeaway Message

• Time is of the essence.
• Initial money will be awarded QUICKLY
• 1/3 (?) this Fall
• Many may not qualify
• Design your project to comply
• Design your project with an eye on the Broadband
  debate
• Pay attention to key federal agencies
• Pay attention to state preferences
• Enlist Support

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What is at Stake?

• 7.2 billion for broadband projects
• NTIA 4.7 billion
• NTIA is all grants80/20 match
• RUS 2.5 billion.
• RUS is loans, loan guarantees, plus grants
• assume 75 of project must be rural
• Other money elsewhere?
• 2B available in Health IT programs
• Electric Grid Upgrade
• Intelligent Highways
• DoD quality of life

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What is in the Stimulus Bill

• For an hour long program on the stimulus visit
• http//www.millervaneaton.com/co
  ntent.agent?page_nameHTFeder alStimulus

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BTOPS Grants Timing Issues

• Notice of Funds Availability--Request for
  Competitive Grant Proposals (NOFA)
• 1st NOFA, not before mid-June (after June 12 DTV
  conversion)
• 3 traunches at six month intervals?
• 1st awards by December, 2009?
• At least 20 local match
• At least one grant per state
• Project completion within 2 years of grant
• Project would not have been implemented during
  the grant period without Federal grant assistance

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What Rules will Govern the Grant?

• Buy American terms are favored but not
  mandatedsee OMB release
• http//www.whitehouse.gov/omb/assets/memoranda_fy2
  009/m09-15.pdf
• Davis-Bacon Act Labor rates apply, i.e.
  employment salaries must meet or exceed the
  prevailing local rates.
• Compliance with NTIA/FCC published
  "non-discrimination and interconnection
  obligations." (See FCC's 2005 Internet policy
  statement.)
• Extensive project reporting and auditing

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20 Minimum Match

• 20 local match is floor, not ceiling
• Waiver if financial need
• NTIA current rules provide for in-kind matches.
  (15 C.F.R. 24.24)
• Site preparation.
• Site analysis and make-ready costs,
• Overhead costs as much as 20 of total project
  costs e.g., wages and salaries
• Indirect cost rate of up to 10.
• NTIA discretion to tighten these past criteria

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20 Minimum Match

• cash or in-kind donations.
• in-kind contributions might include
• Donated equipment, computers, telecommunications
  facilities
• Commitments of time from individuals outside the
  applicant's organization.
• Contributions of services from organizations like
  telephone companies, network access providers,
  Internet Service Providers, satellite companies,
  cable television operators, etc.

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State Role

• NTIA has sole discretion to decide BUT
• NTIA may consult States
• NARUC and several Governors State priority
  should control
• CAVEAT State is eligible to compete for funds.

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RUS Program

• 2.5 billion in funding
• Funds are available for grants, loans and loan
  guarantees
• Unlike BTOPS, no new authorization language
• Funds can be used
• in any area
• if at least 75 percent is a rural area without
  sufficient broadband access to facilitate rural
  economic development, as determined by the
  Secretary of Agriculture.
• No NTIA BTOPS funds in the same area.

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RUS Priorities

• Priority will be given to
• broadband systems that will deliver end users a
  choice of more than one service provider
• presence of another provider does not appear to
  disqualify your project.
• projects that provide service to the highest
  proportion of rural residents that do not have
  access to broadband service.

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RUS Process

• RUS/NTIA held joint hearings
• RUS has stated it will cooperate with NTIA
• Both agencies have stated they will consider
  parallel grants for complimentary proposals
• RUS has indicated it will consider being guided
  by same rules as NTIA re
• Eligibility
• Priorities
• Timing of funding decisions

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Big Issues

• How much money in each trauche?
• Small 1st traunche to learn lessons?
• Large 1st trauche to accelerate ARRA goals?
• Role of Incumbent Providers
• Overbuilding encouraged or discouraged?
• What is underserved?
• Wireless qualified as broadband?
• Fiber vs DSL as broadband?
• States control or submit pre-emptive proposals?

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What They Are Saying

• Clinton NTIA head Larry Irving Vast majority
  of the broadband stimulus money will go to public
  and non- profit applicants.
• Mary Campanola, outreach coordinator for the RUS
  -- Probably all money will go 100 rural.
• Susan Crawford FCC transition chief and newest
  member of President Barack Obama's National
  Economic Council
• Looking for middle mile backhaul networks in
  rural areas
• community anchor institutions for urban access
• Use Want ARRA grants to test what works //Need to
  experiment with new models

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Administration Priorities

• 3 dimensional chess game
• Universal Broadband deployment with open-ended
  two speeds is a meta-idea
• Commitment to is real and a high policy priority
  FCC Broadband Policy/Plan within 18 months
• ARRA must show immediate Jobs and Economic
  impact
• shovel ready
• spend by October 2010
• Complete within 2 years of grant
• Political Viability
• Expect incumbent (telco/catv) backlash
• sustainable projects, i.e., popular support
• state endorsement test of viability
• Transparency and efficiency measures

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Formal Application Steps?

• Applicant is eligible
• Application meets NTIA terms
• Explain
• how grant will be used
• to carry out the purposes of Act
• in an efficient and expeditious manner
• project would not have been implemented during
  the grant period without Federal grant
  assistance.
• Demonstrate
• ability to comply with federal, state and local
  laws
• ability to meet 20 match

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My Matrix for Project Design

• Unserved or Underserved?
• What is the market failure being addressed?
• What part of BB problem does project solve?
• Does the project fill the gap?
• Sustainable? Replicable? Open (to new
  applications at higher speeds at no cost)?
• Measurable Impact?
• improved service to anchor institutions?
• number of new users/uses?
• jobs created?

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What Should I be doing now?

• Make local elected officials aware.
• Define the project, including scope and cost as
  soon as possible.
• a project cost-study for the geographic area
• a build-out schedule (completed in two years!)
• Find Matching Funds
• Shape the proposal to match the Matrix

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What Should I be doing now?

• Obtain a DUNS number. DUNS website
  http//www.dnb.com/US/duns_update/
• Register with the CCR. CCR website
  http//www.ccr.gov/ Create and account for Fed
  Connect
• Register with FedConnect to submit their
  application. FedConnect website
  www.fedconnect.net
• The registration process can take three to five
  business days or one to three weeks depending on
  your organization

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What Should I be doing now?

• Review TOPS Program http//www.ntia.doc.gov/top/gr
  ants/docu ments/guidelines2004.html
• Standard Form 424, Application for Federal
  Assistance (original signature required)
• Executive Summary (one page)
• Project Narrative (up to 8 pages)Appendices (up
  to 27 pages)
• Standard Form 424A, Budget Information Non-
  Construction ProgramsBudget Narrative (no page
  limit)
• Statement of Matching Funds

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What Should I be doing now?

• Enlist allies
• Who will the project serve? (Local schools,
  public safety agencies, low-income, unemployed,
  aged, and otherwise vulnerable populations)
• Consider partnering with private sector providers

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National Broadband Plan

• FCC must provide plan
• seek to ensure that all people in the U.S. have
  access to broadband
• set benchmarks for achieving that goal.
• include an analysis of the most efficient
  mechanism
• a detailed strategy
• the status of deployment
• projects funded by this bill.
• Controversy re cart before horse

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DTV Transition Education Program

• 90M public outreach and education to vulnerable
  populations.
• This money may be used by NTIA or the FCC.
• Consider applying for local out-reach and
  one-to-one assistance for converter-box
  installation. 
• ESL population
• Home-bound elderly
• Rural unserved by CATV

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Online Resources

• Recovery.gov Tracks federal agency expenditures
  of American Recovery and Reinvestment Act monies
  http//www.recovery.gov
• Office of Management and Budget implementation
  guidance on stimulus spending http//www.whitehou
  se.gov/omb/assets/memoranda_fy2009/m09-10.pdf
• National Telecommunications and Information
  Administration programs http//www.ntia.doc.gov/
  otiahome/otiahome.html
• Rural Utilities Service programs
  http//www.usda.gov/rus/telecom/index.htm
• Federal Communications Commission on rural
  broadband http//wireless.fcc.gov/outreach/index.
  htm?jobbroadband_home
• Full text of American Recovery and Reinvestment
  Act of 2009 http//frwebgate.access.gpo.gov/cgi-
  bin/getdoc.cgi?dbname111_cong_billsdocidfh1enr
  .pdf

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Professional Assistance

• As you assemble your project, identify project
  professionals who can work quickly to assist in
  the technical aspects of a project.
• Engineers
• Financial analysts
• Legal/Contract Assistance

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Questions?
Nicholas P. Miller nmiller_at_millervaneaton.com Mill
er Van Eaton, P.L.L.C. 1155 Connecticut Avenue,
N.W. Suite 1000 Washington, D.C.
20036-4301 Phone [phone] Fax [phone] W
ebsite www.millervaneaton.com