Comments of Prattnetworks LLC

Before the
Department of Commerce

National Telecommunications and Information Administration

and the

Department of Agriculture

Rural Utilities Service
Washington, DC

In the Matter of
Joint Request for Information
American Recovery and Reinvestment Act of 2009, Broadband Initiatives Program (BIP) and Broadband Technology Opportunities Program (BTOP) / )
)
)
)
))
)
) / Docket No. 0907141137-91375-05

Submitted To: Under Secretary of Agriculture for Rural Development,

Assistant Secretary of Commerce for Telecommunications and Information

COMMENTS OF PRATTNETWORKS LLC

RESPONSIVE TO JOINT REQUEST FOR INFORMATION (RFI)

ISSUED NOVEMBER 16, 2009

Peter J. Pratt, Principal

PrattNetworks LLC

759 CJC Highway, Suite 334

Cohasset, MA 02025-2115

(617) 418-4696

November 30, 2009

TABLE OF CONTENTS

EXECUTIVE SUMMARY: INCENTIVES FOR USE OF THE RUS LIST OF ACCEPTABLE MATERIALS BY BIP AND BTOP APPLICANTS………………..... iii

BACKGROUND …………………………………………………………….……..2

APPLICATION, REVIEW, AND POLICY ISSUES ADDRESSED…….……..3
Recommended Mechanism within the Round II Application Process for the Use of List of Materials by BIP and BTOP Applicants…………..……….….3
Incentive Serves the Central Purpose of the Recovery Act: The Preservation and Creation of American Jobs…………………………………….………….5
Incentive Leaves the Buy America Waivers Fully in Place…..…..………...... 7
Incentive Enshrines the Expressed Preference of RUS, and Streamlines Application, Award, and Oversight Processes……………..……..………...... 7

CONCLUSION ……………………………………………………………………9

EXECUTIVE SUMMARY: INCENTIVES FOR USE OF RUS LIST OF ACCEPTABLE MATERIALS BY BIP AND BTOP APPLICANTS

PrattNetworks LLC is a telecommunications consultancy with substantial experience in the program management for the deployment of broadband networks. The firm presently advises Round I and Round II applicants participating in the broadband stimulus program of the Recovery Act, assists telecommunications equipment manufacturers in certificating their products for inclusion in the approved List of Acceptable Materialsof the Rural Utilities Service (RUS) of the U.S. Department of Agriculture (USDA), and publishes information about developments in the telecommunications industry including those relating to the broadband stimulus program.

In order to “improve the broadband programs by enhancing the applicant experience” and to make “targeted revisions to the first Notice of FundsAvailability (NOFA)” we respectfully recommend that NTIA and RUS jointlydeploy in the new NOFA a simple mechanism, described hereunder, of application points which deliver an incentive to BIP and BTOP applicants for the use, in their respective bills of materials (BOMs) for proposed networks, network elements which have been approved for inclusion on the List of Materials published by RUS.

We identify hereunderseveral areas of program improvementwhich will be realized by the implementation of this incentive mechanism in funding Round II of the BIP – BTOP broadband stimulus program.

Importantly, this simple incentive structure is proposed to exist simultaneously with the Buy American waivers, which we expect will remain in place for the correctly determined findings of fact previously issued by the Secretaries of Agriculture and Commerce.

Before the
Department of Commerce

National Telecommunications and Information Administration

and the

Department of Agriculture

Rural Utilities Service
Washington, DC

Submitted To: Under Secretary of Agriculture for Rural Development,

Assistant Secretary of Commerce for Telecommunications and Information

COMMENTS OF PRATTNETWORKS LLC

RESPONSIVE TO JOINT REQUEST FOR INFORMATION (RFI)

ISSUED NOVEMBER 16, 2009

PrattNetworks LLC submits these comments in response to the Joint Request for Information[1] in the above-captioned proceeding. We recommend the implementation of a simple incentive for funding applications for insertion into the new Notice for Funds Availability (NOFA) to be issued for Round II of the broadband stimulus program; as such program is authorized and funded by the American Recovery and Reinvestment Act (the “Recovery Act”).[2] The purpose of the incentive is to increase the usage, by Round II applicants and awardees, of telecommunications network equipment and materials certified by the Rural Utilities Service (RUS) of the Department of Agriculture and placed on the List of Materials[3] issued annually by RUS, with periodic updates.

I. BACKGROUND

PrattNetworks LLC is a telecommunications consultancy with substantial experience in the program management for the deployment of broadband networks. The firm presently advises Round I and Round II applicants participating in the broadband stimulus program of the Recovery Act, assists telecommunications equipment manufacturers in certificating their products for inclusion in the approved List of Acceptable Materialsof the Rural Utilities Service (RUS) of the U.S. Department of Agriculture (USDA), and publishes information relative to developments in the telecommunications industry.

In order to “improve the broadband programs by enhancing the applicant experience” and to make “targeted revisions to the first Notice of Funds Availability (NOFA)”[4] we respectfully recommend that NTIA and RUS jointly deploy in the new NOFA a simple mechanism, described hereunder, of application points which deliver an incentive to BIP[5] and BTOP[6] applicants for the use, in their respective bills of materials (BOMs) for proposed networks, network elements which have been approved for inclusion on the List of Materials.

We identify hereunder several areas of program improvement which will be realized by the implementation of this incentive mechanism in funding Round II of the BIP – BTOP broadband stimulus program.

Importantly, this simple incentive structure is proposed to exist simultaneously with the Buy American waivers, which we expect will remain in place for correctly determined findings of fact previously issued by the Secretaries of Agriculture and Commerce.[7]

II.APPLICATION, REVIEW, AND POLICY ISSUES ADDRESSED

A.Recommended Incentive Mechanism within the Round II Application Process for the Use of List of Materials by BIP and BTOP Applicants

The simple incentive mechanism which we respectfully recommend may be easily executed as several insertions to the online application forms[8] to be deployed by the agencies in Round II of the broadband stimulus program. These simple changes to the application forms will streamline the application, application review, and program reporting functions of both applicants and the managing federal agencies.

In the application form for the BIP-BTOP Track 1 infrastructure program, Broadband Infrastructure Application for BIP-BTOP, we recommend that a 5 point incentive preferential allowance be inserted into the form, and available for use by applicants that warrant that at least 51% of the value of the equipment and associated materials to be used in their proposed networks be drawn from such equipment and associated materials on the then current List of Materials as promulgated by RUS.

Further, in the application form for the BIP-BTOP Track 1 infrastructure program, Broadband Infrastructure Application for BIP-BTOP, we recommend that a 10 point incentive preferential allowance be inserted into the form, and available for use by applicants that warrant that at least 71% of the value,of the total equipment and material BOM proposed for the project, be drawn from such equipment and associated materials on the then current List of Materials as promulgated by RUS.

In the application form for the BTOP Public Computer Center Program Track 2, Public Computer Center Application, we recommend a similarly weighted incentive structure which gives the maximum allowable incentive for the use of at least 71% of List of Materials equipment and associated materials, by value of the total equipment and material BOM proposed for the project.

In the application form for the BTOP Broadband Sustainable Adoption Track 3, Sustainable Broadband Adoption Application, we also a recommend a similarly weighted incentive structure which gives the maximum allowable incentive for the use of at least 71% of List of Materials equipment and associated materials, by value of the total equipment and material BOM proposed for the project.

B.Incentive Serves the Central Purpose of the Recovery Act: The Preservation and Creation of American Jobs

The central statutory purpose of the Recovery Act is “To preserve and create jobs and promote economic recovery.”[9]

In the case of the broadband stimulus program, additional to the primary role of job preservation and creation, the Act is given the purpose of causing the deployment of new digital networks. This charge by Congress to NTIA and RUS is within the larger context of the Act’s appropriations and authorizations for the construction of a wide range of new and recapitalized infrastructure for the greater productive capacity of the American economy. President Obama referenced the jobs / infrastructure linkage at his signing of the Recovery Act on February 17, 2009, “Because of this investment, nearly 400,000 men and women will go to work rebuilding our crumbling roads and bridges, repairing our faulty dams and levees, bringing critical broadband connections to businesses and homes in nearly every community in America, upgrading mass transit, building high-speed rail lines that will improve travel and commerce throughout our nation.”[10]

Recovery Act criteria issued by the Office of Management and Budget (OMB) requires broadband stimulus program funding awardees to report, and the agencies to collect and further report, the specific number of jobs created or preserved as projects are executed. As a recent report to Congress by the Government Accountability Office (GAO) states, “Section 1512 of the Recovery Act[11] and related OMB[12] guidance requires all funding recipients to report quarterly to a centralized reporting system on, among other things, the amount of funding received that was expended or obligated, the project completion status, and an estimate of the number of jobs created or retained through the funded project, among other information.”[13]

Broadband stimulus program managers at NTIA and RUS are thus required to deploy metrics and issue reports for the number of jobs preserved and created by each successful Round I and Round II applicant, in order that Congress and the American public may understand the degree to which the program advances the central purpose of the Recovery Act.

Importantly, managers at NTIA and RUS are mandated by Congress to implement policies and procedures which maximize the preservation and creation of American jobs as the program is executed. This primary function becomes more critical today, as the agencies develop rules for program Round II via this comment phase and the resulting NOFA, given the current efforts of the Obama Administration and Congress to address the continuing high levels of unemployment across all sectors and regions of the American economy.

As Congress and the President work to craft a new jobs creation bill, agencies charged by Congress with the same mission under the Recovery Act must reexamine each and every programmatic mechanism at thedisposal of the Executive to address this issue, an issue which one distinguished economist recently called The Jobs Imperative.[14]

Implementation by NTIA and RUS of incentives for use of the RUS List of Materials in Round II is such a tool to better drive the preservation and creation of American jobs – one that is both immediately available and recognized as such by Congress.

While there was no shortage of controversy earlier this year about the applicability of the Buy American provision of the Recovery Act to the broadband stimulus program, and the provision’s potential role in job creation and preservation, Congress has for at least fifty-four (54) years recognized the job creation role of the Materials List. The Materials List was first promulgated by USDA in 1955 for use by all recipients of federal funds engaged in the construction of telecommunications facilities in rural unserved and underserved areas of the nation.

For the entire period since that time, Congress and USDA have recognized the link to creation and preservation of American jobs, via the use of the List of Materials.

C.Incentive Leaves Buy American Waivers Fully In Place

Under our recommended incentive mechanism, we contemplate that the Buy American Waivers, issued by the Secretaries of Agriculture and Commerce on July 1, 2009 be left in place. We recommend that the limited waivers be left in place, given the correctly ascertained status of global supply chains supporting the production of telecommunications equipment.

D.Incentive Enshrines the Expressed Preference of RUS, and Streamlines Application, Award, and Oversight Processes

Within the suggested guidelines for funding Round I of the broadband stimulus program, RUS itself has already strongly expressed its preference for the use of Materials List certified network elements within the BOMs submitted by BIP applicants.

As stated on the joint agency site, BroadbandUSA.gov, “ Applicants applying under the RUS Broadband Initiatives Program (BIP) are not required to purchase materials that are listed on the ‘RUS LIST OF MATERIALS Acceptable for Use on Systems of USDA Rural Development Telecommunications Borrowers - IP 344-2’; however, RUS strongly recommends that applicants utilize this list.”[15]

Within a document entitled BIP/BTOP Frequently Asked Questions,[16] the agencies iterated the same policy point in response to a question asked during the Round I application process, “**3. Does RUS maintain a list of equipment acceptable for use in RUS-funded projects?” The agencies answered with nearly identical language as that above, “Yes. RUS maintains an accepted list of materials available at “RUS LIST OF MATERIALS Acceptable for Use on Systems of USDA Rural Development Telecommunications Borrowers - IP 344-2. Applicants applying under the BIP are not required to purchase materials shown on this list; however, RUS strongly recommends that applicants utilize this list.”

Implementation of incentives for the use of List of Materials in applicant BOMs under Round II is thus not at all a alien concept. Use of the List of Materials is fully supported by RUS, the agency that has maintained the List of Materials certification program for decades. The only element currently lacking as regards the List of Materials in the broadband stimulus program is a direct linkage between the List and the operational aspects of the Recovery Act program. The incentive mechanism which we propose in this RFI response addresses that current lack of direct policy – programmatic linkage.

With the implementation of this proposed incentive mechanism, the Round II application, review, and oversight processes will be streamlined. Applicants choosing to select equipment and materials from the List of Materials will be able to simply declare such choice. This type of selection will greatly reduce the time and effort engaged in, by both applicants and agency reviewers, to determine if certain equipment or materials are subject to the issued limited waivers of Section 1605 of the Recovery Act.

III.CONCLUSION

PrattNetworks LLCurges NTIA and RUS to implement a simple incentive mechanism, as outlined hereunder, that advances the primary statutory priority of the Recovery Act, the creation and preservation of American jobs.

Based on our experience supporting Round I applicants and Round II intended applicants, we urge such implementation in the upcoming NOFA to be issued for the second and final funding cycle (Round II) of the broadband stimulus program. This incentive mechanism will enable a preferential point system which has as its operational purpose an increase in the use of RUS certificated telecommunications wire and cable, network equipment, and hardware in the bills of material (BOMs) of Round II awardees receiving broadband stimulus grants, loans, and grant/loan combinations.

In this manner, both NTIA RUS and will advance the congressionally declared purpose of job preservation and creation in the Recovery Act, act to streamline the application and application review process in funding Round II, and formally recognize the six decades of successful program administration and development by RUS as seen in the Lit of Materials and the certification program that support it of today.

Dated at Cohasset, Massachusetts, this 30th day of November, 2009.

Respectfully Submitted,

/s/ Peter J. Pratt

Peter J. Pratt, Principal

PrattNetworks LLC

[1] Department of Commerce, National Telecommunications and Information Administration; Department of Agriculture, Rural Utilities Service, Docket No. 0907141137-91375-05, Joint Request for Information, 74 Fed. Reg. 58940 (November 16, 2009) (the “Request for Information”).

[2]American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat. 115 (2009 (“Recovery Act”)

[3] United States Department of Agriculture, Rural Utilities Service, Rural Development Utilities Programs, Informational Publication 344-2, 2009 Edition, List of Materials Acceptable for Use on Systems of USDA Rural Development Telecommunications Borrowers at: and, United States Department of Agriculture, Rural Utilities Service, Rural Development Telecommunications Program, Latest Changes to the List of Acceptable Materials of October 16, 2009 at: (both documents citied collectively hereunder as “List of Materials”).

[4]74 Fed. Reg. 58940, SUMMARY

[5]The Broadband Initiatives Program (BIP) is administered by the Rural Utilities Service (RUS) of the Department of Agriculture

[6]The Broadband Technologies Opportunity Program (BTOP) is administered by the National Telecommunications and Information Administration (NTIA) of the Department of Commerce.

[7]74 Fed. Reg. 31410, Department of Commerce, NTIA, BTOP, Buy American Exception (July 1 2009). See: and, Fed. Reg. 31204, Department of Agriculture, RUS Notice of Limited Waiver of Section 1605 (Buy American Requirement) (July 1 2009). See:

[8] In Round I NTIA-RUSpromulgated 3 separate forms, 1 each for the 3 respective programs authorized by the broadband stimulus provisions of the Recovery Act. The 3 application forms are:

Broadband Infrastructure Application for BIP-BTOP See:

Public Computer Centers Application See: ;

Sustainable Broadband Adoption Application, See:

[9] Recovery Act, Sec. 3 Purposes and Principles (a)(1)

[10]Remarks by the President and the Vice President at Signing of the American Recovery and Reinvestment Act, Denver, Colorado, February 17, 2009 See:

[11]8Pub. L. No. 111-5, div. A, tit. XV, § 1512(c),(d) (2009).

[12] OMB memorandum, M-09-21, Implementing Guidance for the Reports on Use of Funds Pursuant to the American Recovery and Reinvestment Act of 2009 (June 22, 2009).

[13]GAO Testimony Before the Committee on Commerce, Science, and Transportation, U.S. Senate, RECOVERY ACT: Preliminary Observations on the Implementation of Broadband Programs, Statement of Mark L. Goldstein, Director Physical Infrastructure Issues (October 27, 2009), See: pg. 12.

[14] Krugman, Paul, The Jobs Imperative, New York Times (November 29, 2009). See:

[15]See:

[16]BIP/BTOP Frequently Asked Questions, IV. F. Buy American, pg. 17 (July 31, 2009). See: