Obama Broadband Stimulus and Rural Broadband

Senator Ted Cruz quoted in POLITICO Morning Tech newsletter.

“. . . he [Cruz] viewed as wasted money from the billions of dollars spent on broadband stimulus under the Obama administration: “A lot of that money ended up nowhere near rural broadband.”

When the ARRA Stimulus Broadband Request for Proposals was issued, I was consulting with SEDCorp. SEDCorp held a series of meeting for all the ISPs in their four-county service area, Sierra, Nevada, Placer and El Dorado County. The purpose of the meetings was to encourage the ISPs to prepare and submit ARRA Broadband Proposals. Nine of the thirteen ISPs in the service area attended the planning meeting. Only one, Smarter Broadband filed and won a $2.3 million proposal.

I worked with the all the ISPs that were interested in submitting a proposal, especially to create their coverage maps, which had to be provided as ArcGIS shapefiles. Once the 3/4 inch thick RFP was issued most of the ISPs rejected it outright, they did not have sufficient staff to complete the engineering requirements in the proposal, nor the accountants and legal team to complete the financial audit, human resources and environmental certifications required by the RFP. Also, there was a “Buy American” clause, later removed when it was evident that some key network components were not manufactured the US, they are all produced abroad.

Bottom line is the rural broadband providers that could have used the ARRA broadband stimulus money the most effectively, could not get access to the funds due to the high administration barriers. Those barriers could have been unintended, with the bureaucrats trying to cover all the bases and to ensure equity in the distribution of funds. Or, as one insightful observer commented, it was intentional after being badgered by telco’s through their lobbying firms to make the proposals as complicated as possible, yet not a challenge to their engineering, accounting, and legal staffs.

How did Smarter Broadband overcome the administrative barriers? They were helped by a vendor who provided the needed staffing assistance. As one wag observed, the vendor wrote the proposal and Smarter Broadband signed it. I suspect it was a joint effort. It turns out writing up the project was the easy part, the funding came with some time constraints. The money had to be spent by specific dates, after all, it was stimulus money. And, that almost ended the program when the CEQA process consumed a significant portion of the allotted time.

Recognizing that any future broad funding could also include the same administrative obstacles, I wrote emails to Congressman McClintock and La Malfa Staff asking them to intercede with NTIA and explain the issues for small rural ISPs; they lack the staff to reply to a complicated proposal request. I received a positive response from La Malfa’s office, not so much from McClintock’s office. I continue to press the issue with the La Malfa staff. Now, that the money is going to be distributed by the Department of Agriculture, I am going ask they refocus their effort with USDA.


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