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September 18, 2009 9:35 AM

Perusing BTOP Apps: The Good, The Bad, And The Ugly

So over the last couple of days curiosity has gotten the better of me and I've started perusing the BTOP application database available here.

In it I've found a whole range of projects, from those requesting tens of thousands or even less to tens of millions and even more, from those that look just right to those that look all wrong, from those that seem to have the public interest foremost in mind to those that stink of profiteering.

To help frame my initial reactions, let's break things down into the tried and true categories of the Good, the Bad, and the Ugly.

The Good
One very good thing is that there's a wealth of innovative models represented in these applications. They're not all innovative, but there are enough good projects in there that I'm confident at least some of this BTOP money will have a positive impact that pushes our country forward.

Another great thing is that there's a ton of fiber projects, 181 in total requesting $3.7 billion, according to this FierceBroadbandWireless.com article. As a big believer in fiber, I was ecstatic to see that it outnumbered all other wireline technologies by a factor of four or five. This shows that most people realize that fiber's the only technological answer to building networks that can withstand the test of time and grow to match our needs.

Given the initial intent of the stimulus to prioritize public networks, it was reassuring to see all the applications from public entities. I'd heard some buzz a few months ago that maybe there weren't enough good public projects to fund and that we're better off just giving the money to private providers, but this list of projects proves that sentiment to be wrong. There are plenty of worthwhile public projects ready to turn funds into action.

On another positive note, while I'd feared that this program would be stricken with greed through lots of applications more worried about profiteering than the public good, the general sense I got is that there isn't too much of that. It's still there, but not overwhelmingly so. Or at least they're just really good at hiding behind the language of their executive summaries.

Finally, there definitely seems to be enough worthwhile projects to use up all of the budget that's available for this round of funding. I never had concerns that there'd be enough requests, but it's reassuring to know that there are plenty of good applications that deserve to have a chance at these grants and loans.

The Bad
To start this section with, let me say that while reading through this I became increasingly wary of using public grants to fund private projects. I just have a hard time getting my head around taxpayers subsidizing somebody else's profitability when there are worthwhile public projects to be funded. That doesn't mean I think private projects don't deserve funding, just that I think we might need to rethink how that works. For example, why not require any private firms looking for grants to give up part of their company to the government in exchange for the money? That way if they become wildly profitable the American people can share in that success. Alternatively, perhaps what's really needed is an angel/VC mechanism that could fund socially conscious private companies. I'm not saying that all the private companies that applied for grants are bad, just that I think we should treat them a bit differently if we're handing them a check with few strings attached.

In both the public computing center and adoption sections, I think there's too much of an emphasis on buying computers. I completely respect the fact that not having access to a computer is a hugely limiting factor to people adopting broadband, but just because you have computers available doesn't mean that anyone will use them. And there are technological opportunities that may be better than simply buying computers, like pursuing thin client terminals that leverage big bandwidth to host applications on central servers thereby reducing the cost and time associated with keeping computers up and running, since these terminals have fewer moving parts. Alternatively, would it be better to get mobile devices into more peoples' hands than desktop computers since that's the way usage patterns are trending? I'm not saying we shouldn't be buying computers, just that I'd like to see more emphasis on more sophisticated initiatives that step beyond that basic approach of just buying computers and setting them up in a room. Yet this seemed to be the model for most public computing center applications.

On a related note, a bunch of the public computing center applications do nothing more than upgrade the machines at existing computing centers. Is this really the best use of these dollars? I'm actually not totally against this idea, but I think there needs to be some additional level of screening to make sure that only those computing centers that are already successful and that have more demand than supply receive these funds. Because if we end up upgrading computing centers that aren't already in demand, that seems likely to result in wasted resources.

I do need to acknowledge that there are a lot of applications talking about going beyond just buying computers to take a multi-layered approach, especially in the broadband adoption side of things, to combine connectivity, computers, applications, and training. While I'm hugely supportive of this in theory, I can't help but wonder, which of these will work? Which will make better use of these funds than others? Have any of them worked really well yet? Because on paper, the answers to these questions aren't entirely clear. And for the most part I'm not sure if anyone has totally cracked the nut on this yet, so anyone claiming that their model's proven makes me wary. That said, I'm fully supportive of the idea in theory, so let's just make sure we fund the right ones.

The final bad thing I'll mention is that there are a lot of applications in the wrong categories. Requests for funds to build computer centers under adoption. Plans to use money for connectivity projects under public computer centers and adoption. Adoption requests applying for public computer center money. On the one hand, I don't necessarily blame the applicants for doing this as the best projects often don't fit neatly within one definition. And I think this shows that the distinctions between different types of projects are largely arbitrary, suggesting that we should be taking a more holistic approach to funding innovative projects. But I also can't shake the feeling that some of these projects were intentionally put into different categories in the hopes of increasing their chances of receiving funding. In other words, a project to bring last mile connectivity thinks it has a better chance of beating out other adoption projects than other last mile projects. And to me, someone who's willing to do that probably won't be a good steward of taxpayer dollars.

The Ugly
The first ugly trend in these applications is the audacious amount of money requested for satellite "broadband". A $130 million grant and $400 million loan to someday deploy a satellite that will hopefully deliver the speeds they promise but rarely deliver on. Plus two applications of $15+ million a piece that basically goes to business development for the satellite companies helping them get customers. First off, I don't consider satellite service to be broadband. Its upload speeds suck, it has really high latency rendering apps like VoIP unusable, it has really low bandwidth caps and high overage charges, the service is hugely expensive, the new satellite won't be ready to get people connected for at least a few years, and despite their claims of reaching all of rural America there will still be a ton of homes not able to connect because of their geography. Making this even more troubling is that if they get money to serve an area, then that area might not be able to get any more money, so anyone not able to connect to this crappy satellite service will be left without any options. I could go on, but I think this is an incredible waste of money, and I will be extremely disappointed if NTIA deems it worthy of funding, especially since I know of much better projects that are much more deserving, plus I'm having a hard time stomaching giving a private company half a billion dollars to fund its R&D; and help it increase its profitability.

The only group of projects that almost make me more upset are the requests for funds for BPL (or broadband over powerlines). Let's not beat around the bush: BPL is not a proven technology. It's never been deployed on a large scale in the US, and it's never been proven to work all that well anywhere. Plus it doesn't deliver much in the way of bandwidth today, and it has no clear path to be able to easily upgrade that capacity over time. And giving BPL projects money could lead to the same issues as satellite, namely ruling that area out from ever getting any more government money in the future to bring true broadband to their constituents. Not to mention that we're again subsidizing the profitability of a private company.

Somewhere in between surprising and not were the huge number of WiMAX applications, more than any other technology. While this wasn't surprising given that wireless guys have been touting their ability to get more people connected for less money than any other technology, and WiMAX is the new kid in town offering long-range wireless access, it still was a bit surprising as WiMAX is not an overly proven technology either. It's only just starting to be deployed in the US, and the initial reactions to the quality of service being realized in urban areas, where the higher densities make this easier to deploy, have been far from positive. Unlike satellite and BPL, I'm not saying we shouldn't give any money to WiMAX, but I do think that it'd be a mistake to invest too much in an unproven technology. Better we just fund a few projects to see how they work, and then we can look at funding more in the future.

The ugliest grant request I saw connectivity-wise, though, was for a public computer center in San Francisco that wants money for T-1 lines. While this may be their only option for reliable bandwidth, I think it's rather telling that there were only one or two applications out of 2,200 that thought T-1s were worth investing in. We've got to make sure we're only putting money into forward-looking technologies, and T-1s are so 20th century.

On another note, I'm not a big fan of the applications that want to subsidize service. I know that price is a big barrier to many of the people who have yet to adopt broadband, but what happens when the time or money runs out? Will prices just jump back up and leave them out again? Even with these subsidies, how do we know they will be enough to get everyone online? And how do we know that private providers aren't padding their pricing with extra profit subsidized by taxpayer dollars? This wouldn't be the first time this has happened when government's handing out free money. While I'm not totally against this idea, I have some serious reservations about its effectiveness and efficiency.

Another overarching concern I have is that it seems like some of these applications were slapped together just for the stimulus, in other words they didn't exist before February. Unless these projects have some really great people behind them with tons of community support, I don't see how taking the risk with these new ventures is worth it. I'd rather see projects that have been working on their initiatives for a while get funded first. Though the flipside to this is that we also don't want to fund projects that may have existed for a while but haven't made any progress or had any success. It's going to be a tricky balancing act to find the middle ground between these, but I think it's an important consideration to make as free government money always brings out people with dollar signs in their eyes.

Another very ugly aspect of these applications is the database they're displayed in. I know I should probably be grateful for any transparency, but I can't help but wonder why can't we do simple things like search for projects based on dollar amount requested? Why isn't there an easy way to which applicants are non-profit or for-profit? Why can't we have a map that plots out where the various projects are located? Why aren't there any ways for the public to rate, rank, and/or comment on these applications? This last piece is especially important as I think we're missing a ton of opportunity to crowdsource some of the review process.

The final ugly thing I'm a bit worried about is that some of these applications look like they've got the right ideas but they may not be fully fleshed out yet. What support structure do we have for them? Are the choices to either give them money that they may not be ready for, or to not give them funding and watch them fade away? Why don't we have a support system in place that can help advise these projects on how to improve their applications for the next round? I know there's been some talk of having some flexibility to give advise to applicants on what they're missing, but I'm thinking about taking this a step further in order to help increase our chances for success.

Unfortunately, I know that NTIA and RUS have just a little bit on their plates right now, and setting up this support structure would likely take a lot of work. But I think it's important that we all keep the dialog going about what the right way to administer a program like this is, because I'm a believer that this is just the beginning of greater government support of broadband.

So there you have it, my initial thoughts on the good, the bad, and the ugly of the first round of stimulus applications. Let's hope the good becomes great, the bad becomes good, and the ugly just fades away.

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Comments (3)

We've already tried pumping public money into private enterprise as a means of spurring broadband and it failed spectacularly. It's call the Telco Act of '96. That $300B (and counting) handout didn't get us much of anything. Public entities applying for funds should most definitely get priority over private applications. Private enterprise has already proved to be almost entirely incompetent when it comes to building infrastructure.

Posted by Jesse Harris on September 18, 2009 12:47 PM

In my blog post today, the issue about maps that show you the proposed coverage areas, and about allowing people to comment on these applications is addressed in comments from NTIA/RUS - http://bit.ly/1bHSIC.

Posted by Craig Settles on September 18, 2009 2:56 PM

Broadband Properties has put the data into a spreadsheet that makes it much easier to work with (we've also made minor corrections and will be adding more information). You can download it here:

Posted by Masha Zager on September 18, 2009 5:14 PM

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