Before the
National Telecommunications and Information Administration
and the
Rural Utilities Service
Washington, D.C. 20230
In the Matter ofBroadband Initiatives Program and Broadband Technology Opportunities Program / )
)
)
)
) / Docket No. 0907141137-91375-05
RIN: 0660-ZA01
COMMENTS
OF
FRED WILLIAMSON & ASSOCIATES, Inc.
Fred Williamson & Associates, Inc. (FWA) offers these comments in response to the November 10th, 2009 Joint Public Notice inviting interested parties to submit comments on certain designated topics that will assist the National Telecommunication and Information Administration (NTIA), U.S. Department of Commerce, in establishing and administering the Broadband Technology and Opportunities Program (BTOP), and the Rural Utilities Service (RUS), U.S. Department of Agriculture (BIP), in implementing its expanded authority to make grants and loans for the deployment and construction of broadband systems.
Fred Williamson & Associates, Inc. (FWA) is a consulting firm that provides services to rural Incumbent Local Exchange Carriers (RLECs) in Kansas, Oklahoma, Michigan and Texas. FWA’s clients offer a wide variety of telecommunication services to rural customers in addition to the traditional telephone services they provide as ILECs. These include broadband, video and mobile services, long distance resale and Competitive Local Exchange Carrier (CLEC) service.
All of FWA’s Clients are former and/or current RUS borrowers and Eligible Telecommunications Carriers (ETCs), and are recipients of various Universal Service Fund (USF) support mechanisms and have responsibly used these funding support mechanisms to enhance their broadband capabilities and services for their customers.
FWA recognizes the crucial role that NTIA and RUS are playing in delivering economic stimulus funds into the marketplace as quickly as possible under the American Recovery and Reinvestment Act of 2009 (“ARRA”). FWA appreciates the opportunity to submit its comments as to how the process of delivering the stimulus money to the telecommunications industry can be enhanced.
1. THE APPLICATION AND REVIEW PROCESS
FWA believes that the ARRA Loan / Grant applications should not be based, reviewed or processed according to a subjective checklist nor should numbers be employed to evaluate applications. RUS and NTIA should avoid creating incentives for applicants who create “made to measure” projects so as to accumulate checklist points without regarding the fundamentals and sustainability of the project. While it is certainly possible that most of the submitted projects / applications promote worthy goals; the relative benefits of awarding funding to individual applicants depends on many factors that may vary greatly from one application to another. In our estimate, many worthy applications have been rejected for a lack of accumulating “checklist points”.
FWA believes that NTIA and RUS should consider an applicant’s past history, merit and technical experience as telecommunications providers as well as the practicality of the project. The best way to have a successful deployment of broadband throughout rural America is to fund projects which have the greatest chance for success.
First and foremost, NTIA & RUS should look to rural facilities-based broadband service providers - the entities that have a proven track record, extensive technical & staff expertise and familiarity with rural customers and area(s) to be served. These providers are in the best position to ensure the most effective deployment of broadband infrastructure. This would mean dealing with rural or incumbent service providers (RLECs) who have a proven track record of getting projects completed on time. RUS should also look at companies who have borrowed from them in the past to determine who can be trusted to get the job done. Applications from other companies that perhaps were created overnight solely for the purpose of applying for the ARRA stimulus funds or that do not have a past history of providing service should be subject to significantly more scrutiny prior to being selected merely on the basis of accumulated points many of which are very subjective in nature. Many of these “overnight” companies will lack the personnel, financial resources, the experience and the commitment of serving rural area consumers. Historical financial data should be a key requirement in evaluating any application. It should also be a requirement that any ARRA grant / loan applicant that has defaulted on a prior RUS loan and or that has filed for bankruptcy resulting in anything less than a full repayment of a prior RUS loan be rejected and or at a minimum be subjected to special scrutiny and limitations.
2. IN EVALUATING APPLICATIONS, RUS & NTIA MUST CONSIDER PRIORITIES – WHAT IS IMPORTANT IN THE SELECTION PROCESS?
RUS should take into account the following priorities when establishing the selection criteria for the funding of applications:
A) Highest priority should be given to existing or former RUS borrowers. As FWA mentioned earlier, RUS already has a history with these rural companies and can evaluate their ability to get the job done quickly and efficiently. Rural providers have proven that they have the experience, skills and commitment to the communities they serve. RUS also has the staff and the experience that can quickly ensure the funds are being properly used for Recovery Act purposes. Finally, RUS applicants are familiar with the RUS Loan process and the information required (similar to the ARRA Funding process). This would make for a seamless and more economical transition.
B) The second priority should go to applicants who demonstrate a “viable community need”. Consideration should be given to rural applicants who show that their project would provide their rural customers with the Broadband connectivity that is vital in creating jobs, ensuring the community’s continued growth and would provide schools, libraries, medical facilities and government entities with immediate broadband access. This priority should not be deemed second rate or lower on some sort of applied scale simply because it might provide access (and or as it has been referred too as “bang for the buck”) to a lesser number of households and or anchor institutions. As everyone is aware, the rural and “remote” areas of America are less densely populated than urban population centers. Likewise, the rural incumbent carriers in almost all cases provide service in strictly defined service territories proscribed by the state regulatory bodies they are subject to. These territories are in many cases significantly smaller than some of the wireless ARRA applications that we have observed and in all of our clients situations completely dwarfed by the applications of the satellite companies that filed multi-state applications. However, the fact that the rural incumbent service territories have fewer subscribers does not mean that those subscribers are any less important or less viable innovative job producers than those found elsewhere.
C) Next priority should go to applicants who can deliver a “shovel ready” project. It should be relatively easy to determine from past history and from their application if a company is ready to move forward immediately to accomplish the objectives of the program as soon as funds are made available. The incumbent LECs have a solid history of working with and commitments from their engineering and construction counterparts so that they can deliver shovel ready projects.
D) Finally, applications that show a genuine need. Finally, priority should also be given to applicants who show that their project would not be feasible if not for the ARRA funding.
3. ECONOMIC DEVELOPMENT - EXPERIENCE SERVING RURAL AREAS AND COMMUNITY PRESENCE MERIT ADDITIONAL CONSIDERATION WHEN APPLICATIONS ARE EVALUATED
The RFI correctly points out that of necessity, smaller companies, and companies that serve rural areas, typically have higher costs than larger companies and those serving in more densely populated (urban) areas. Specifically, NTIA and RUS should highly consider applications that have a historical track record of providing vital services in high-cost areas and that have a deep presence and commitment to the communities they serve. Though the areas may lack the economic resources that more urban areas possess, broadband accessibility is vital in the continued growth and prosperity of these areas and communities. Providers that have experience providing service in rural communities are most likely to successfully deploy sustainable broadband services to their customers. Also, service providers that are managed and staffed by members of the community take heart in the success of the local economy and their quality of life. In other words, they have a greater interest in the project’s completion and success. Therefore, applicants that have proven their commitment and ability to providing modern communications services to rural areas should receive additional consideration. In the past, these projects / areas would have been disregarded by larger companies as being insufficiently profitable to serve. Considering these factors will help to ensure that funding is directed to companies and projects that will provide long-term economic development in rural areas, as intended by the Recovery Act.
4. OTHER CHANGES - ADDITIONAL TIME SHOULD BE ALLOTTED FOR COMPANIES TO SUBMIT THEIR APPLICATIONS
In the first round, applicants had roughly 45 days (from the release date of the original NoFA) to submit their online application. This put an unduly large amount of responsibility on the smaller rural companies with limited budgets and personnel to amass, structure and file their application. Since it has been determined by RUS and NTIA to forego the third round of funding, these governing entities should consider allotting additional time for all companies to prepare their submissions. The additional time will alleviate the likelihood of avoidable errors and allow for a more seamless filing for all.
Sincerely,
Fred Williamson & Associates, Inc.
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