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February 9, 2010 1:02 PM

Should I Apply For The Second Round Of The Stimulus?

With the second NOFA out, now is the time everyone must decide whether it's worth applying for stimulus dollars.

While at first blush the answer may seem obvious as how can anyone turn down the opportunity at free money, when you dig a bit below the surface it becomes less clear.

For one, it takes a lot of time, energy, and money to put together a competitive stimulus application. And this applies to not just filling out the application but also putting together the project and building the coalition to support it.

Secondly, there are no guarantees that any application will get funded. There just isn't enough money to go around, and the second round is likely to attract many more applications than the first round.

Third, there are a number of questions regarding whether the review and selection process is working. So applicants from the first round have questions about whether or not having the best application means anything relative to who gets funded.

Fourth, whoever applies needs to be prepared for a whole lot of heartache and uncertainty as they wait for the process to play out. I know of a ton of qualified applicants to the first round who literally heard nothing from NTIA or RUS from the moment they applied until they received a form rejection letter. Hopefully this will change in the second round, but I wouldn't hold my breath.

Yet despite these caveats, there are also many reasons to apply. For example, the terms under which you can get money have improved (higher grant ratios), eligibility has expanded (higher bar for underserved), and the rules are clearer than they were in the first round (RUS for last mile, NTIA for middle mile).

Plus there's the unfortunate reality that this might be the last first, last, and best opportunity to get free money from the federal government to spur broadband deployment in your community. So despite the many trials and tribulations associated with the stimulus, it's going to be hard to justify not applying.

Now let's dive a bit deeper into the mindsets of the two primary categories of applicants for the second round: those that applied for the first round but got rejected, and those that are applying for the first time.

For those that applied in the first round but got rejected, realize that you should have an advantage over first-timers. Assuming your first application was serious, then you should have something to build off of rather than having to start from scratch.

Also, it's likely that your first application was rejected based on a technicality. While NTIA and RUS haven't said so publicly, I've heard from a number of sources that the majority of those that were rejected were for minor issues. While this frustrates me as I'd thought NTIA and RUS were going to work with applicants to make sure good projects weren't left behind, at the same time it should encourage first round applicants to reexamine and reapply as you may have been inches away from getting money.

At the same time, I think it's a mistake to just take your first round application, tweak it to fit the new rules, and resubmit it. Instead I suggest that you take a critical look at your application and identify ways to take it to the next level. How can you include more detail about what you're doing? How can you build a stronger coalition to support your project? How can you tell a better story?

As a final note, while I haven't heard anyone say this officially yet, the sense I get is that if you haven't gotten your notice that you've made it to due diligence in the round one, then you're almost certainly out of the running, even if you haven't received your rejection notice. It's time to accept this reality and move on.

To new applicants, my first point is that if you haven't already starting pulling your project together, then you likely won't have enough time to get a proper application submitted as they can be hugely complex and you're going to be facing stiff competition.

Secondly, you need to consider very seriously whether or not your projects will even be eligible under the rules. Just because your community needs federal support doesn't mean your application will qualify. And even if you think it will qualify, make sure you double and triple check as I know of some projects that weren't considered simply because they missed that one small part of their project didn't qualify.

Thirdly, and perhaps most importantly, you have to have a plan B for your project. You don't want to put a lot of energy into compiling an application then if the money doesn't come in have everything fall apart. Instead it's important to look at the stimulus as a catalyst to get a plan in motion that can survive on its own. You need to at least start considering contingencies so your community can still get wired even if the feds don't provide any help.

Fourth, you've got to be prepared to be overworked and stressed out over the next month. This shouldn't dissuade you from applying, I'm just trying to help properly set expectations.

And fifth, it's important to reiterate the likelihood that you won't get funded. My over-under on the number of applications that will be submitted for the second round is 10,000. That's four times the first round. While there is more money available, at best your odds are the same in the second round as the first, and they could be much worse. Because of this you need to make sure that you don't mortgage your future applying for a chance in the present. What I mean by this is if the cost of applying has the potential to threaten your financial future if you don't win, then these resources might be better spent on something with a more certain outcome.

That's really what the stimulus comes down to regardless of whether you applied in the first round or not: the stimulus is a gamble. It's like placing a bet on your future where the wager is the time, money, and energy put into applying and the stress you have to endure while waiting.

At the same time, I am still optimistic that despite the many criticisms of the process, at the end of the day NTIA and RUS both truly do want to pick the best projects, projects they can be proud of, that they know will produce real results for Americans.

Because of this, I want to put out a call to action. I want everyone who has a good, worthwhile project to not just apply but to submit the best possible applications they can. Unfortunately the stimulus is rife with bad actors submitted bogus applications. So let's all work together to flood NTIA and RUS with so many good applications that we can drown out the bad ones. We need to make sure that when Strickling and Adelstein say that they've got too many good applications to choose from that they actually mean it.

And most importantly, we need to leverage this opportunity to continue building momentum in communities across our great nation to get them planning their broadband future.

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