2010 Buyers Guide - Broadband Properties

FTTH CONFERENCE COVERAGE
Four Stimulus-Funding Applications
RUS and NTIA rules “throw providers a bone,”
giving them opportunities to serve rural towns if
they also connect the outlying areas.
The complex rules and definitions
in the NTIA-RUS broadband
Notice of Funding Availability
(NOFA) left service providers scratching
their heads in puzzlement. Were their
service areas remote? Rural? Unserved?
Underserved? Should they apply for
loans or grants? RUS, NTIA, or both?
To apply in the first funding window,
providers had to answer these questions
quickly and choose strategies that would
give them a competitive leg up.
Geoff Burke, marketing director at
Calix, explained at the FTTH Conference
how four Calix customers crafted
their funding applications to meet these
complex requirements, yielding insight
into what the funding agencies were trying
to achieve.
Service Provider 1, a Midwestern
CLEC, originally planned to build out
fiber to two towns of 7,500 and 2,500
households respectively. Although SP1
considered these communities unserved,
they were mostly served according to the
NOFA’s low broadband threshold (768
Kbps/256 Kbps). To become eligible for
stimulus funding, SP1 proposed to cover
only about 1,800 homes in the original
target communities, adding about 550
more homes in six small outlying areas.
It constructed the service area somewhat
artificially, stringing census blocks
together so the overall area would have
less than 40 percent broadband penetration
and thus qualify as “underserved.”
To get additional points for over-20
Mbps service, it selected a GPON architecture.
Burke commented that SP1’s
apparent gerrymandering was precisely
the result the agencies were hoping for:
The NOFA, he said, “threw [SP1] the
bone” of the town, a viable territory, so
as to bring broadband to the unprofitable
outlying areas.
Service Provider 2, a Midwestern
cooperative with both incumbent and
competitive territories, saw an overbuild
opportunity in a town of about 900
homes. As in the first case, part of the
town was served with broadband (by the
NOFA standards) and part was not. SP2,
however, included the entire town in its
proposal by extending the borders of
the proposed service area far outside the
town – far enough for the unserved/underserved
area to make up 75 percent of
the total square mileage; it also selected
GPON to provide over-20 Mbps service.
Meeting the 75-percent standard qualified
SP2 for a 50/50 loan/grant combination.
Again, this achieves the agencies’
goal of bringing broadband to outlying
areas that would not have been viable
without the anchor of the small town.
Service Provider 3, a Midwestern
cable television company serving an urban
area, originally planned to expand
its service area out into the suburbs with
fiber-to-the-home infrastructure. Based
on the NOFA, it skipped over the closein
suburbs to select exurban, fringe areas
containing about 5,000 households that
could qualify as rural and underserved.
Although this territory had no anchor
town, its relative proximity to SP3’s urban
territory made it a feasible choice.
SP3 chose GPON because it could support
RF video.
Service Provider 4, an Eastern
CLEC serving an urban area, was looking
to expand its service to nearby urban
areas. When the NOFA was issued,
this provider changed its plans entirely.
Instead, SP4 proposed a middle-mile
project to bring fiber backbone from
its original service area to two adjacent
counties. It then proposed leveraging
the middle-mile project to pick up 1,000
rural, underserved households along the
way and deliver GPON-based services
to them. BBP
November/December 2009 | www.broadbandproperties.com | BROADBAND PROPERTIES | 53