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Q&A with Anthony Wilhelm of NTIA and Ken Kuchno of RUS

in Broadband Stimulus/NTIA/Premium Content by

Special Transcript for Paid Subscribers of BroadbandCensus.com

WASHINGTON, July 26, 2009 – Broadband experts all across the county have been dissecting the Notice of Funds Availability released earlier this month by the National Telecommunications and Information Administration.

BroadbandCensus.com here publishes a transcript of questions posed and answers given at the Broadband Stimulus Town Hall Webcast co-produced by TV Worldwide and BroadbandCensus.com, and which took place on July 9, 2009. An audio-visual replay of the webcast is available free of charge.

An edited version of the first part of this transcript was published in BroadbandCensus.com Weekly Report, July 20, 2009.

Content available for Paid Subscribers of BroadbandCensus.com Weekly Report. Click here to subscribe.

[private_Premium Content][private_Free Trial] Q: It’s been a busy week for both of you gentlemen, I know. There have been workshops going on, in Washington in Boston and many other cities. I appreciate you making time to join this live webcast with a national audience here.

We’re going to turn the time over to Tony Wilhelm, who will give us a brief presentation about some of the high points from the NTIA perspective.

[PRESENTATION by TONY WILHELM, NTIA]

Q: Thank you very much, Tony, for that presentation.

Now, Tony, you mentioned that it’s important you be able to read the materials in their entirety. I believe the application was supposed to be available as of Tuesday. I just checked the website before we went live and it wasn’t there yet. When is it going to be available online?

TONY WILHELM, NTIA: Well, we are shooting to have that material available tomorrow on BroadbandUSA.gov, so you should check back frequently to that website. There’s a nav button called , I believe, “Download Application.” So check that frequently. And, uh, the goal is to have that available tomorrow.

Q: Great. Thank you very much. WE do have one version of that application available on BroadbandCensus.com, but I know there aer more supplemental information that are more thorough that will be released on broadbandusa.gov.

WILHELM: Well, I’d just mention that, I’d certainly wait until the official version is put on our website and released in order to use that as your official submission. Obviously, any version released before that certainly could be used to help put your materials together, etcetera, but certainly use the official version, once it’s released, as the basis for your submission.

Q: Well, you really want people to submit these electronically, and you’re not prepared to receive these electronically until July 30th, is that correct?

WILHELM: Correct. The electronic retake system will be available on July 30th, July 31st or thereabouts, and the goal in the meantime would be to collect all of your information—your documentation, your partnerships—get all of that lined up. We will actually be providing in advance of that date a fillable PDF. So folks will know, for example, character limits and things like that. They can input their data, and then cut and paste it into the electronic intake once it’s available.

Q: What kind of size are you expecting these applications to come in at? I mean, we’ve gotten dozens of questions so far, and one that I’m hearing from many people is, is there going to be any kind of technical support, to help small organizations that want to play in this game but are a little bit daunted by the 121 pages and certainly a lot more pages from applications and guidelines, and so forth.

WILHELM: Well, we do have a toll free number available on broadbandusa.gov, as well as a email help desk at broadbandusa.gov. those are the way that applicants can provide us questions, and we will post answers of general applicability on our website as quickly as we can.. And of course, as you now know we’re conducting a series of 10 workshops across the country to really give applicants some hands on experience and we’re trying to answer their questions as quickly as we can so they can get ready to apply for the funding.

Q: On that note, Tony, I thought you’d want to know that we’re just getting a ton of questions from folks out there. We’re going to try to get to all your questions. I suspect we might not get to all of them, and many of them we will not be able to get to.

I understand from Ken that there is a frequently asked question section of the website where you’re basically posting questions that you’re getting from these workshops around the country. And what we will do, anyways, is stripping out all the personal identifiable information and we’ll give you the questions we’ve gotten here, that we haven’t got the answers to, and hopefully you all will be able to provide some answers, if we can’t get all the answers to you folks today. So I just wanted to encourage you folks to keep those questions coming, and we’ll do our best to answer them.

Q: Tony, where did the idea of the volunteer reviewers come up? I’ve heard a little bit of criticism in the last day since that was discussed at the Boston meeting. Is this something that you really expect to be able to fill with volunteers, or are there going to be paid people for every three reviewers, for every applicant you have?

WILHELM: Well, right now we have a call out for volunteer reviewers. This is a standard practice in federal competitive grant making, and we’ve actually got a lot of positive responses to date. I appreciate the additional plug. I think people should continue to come forward and submit their resume to the email address, on, again broadbandusa.gov. a lot of very experienced people have come forward with the types of skills we want to be reviewing these very complex proposals. Please come forward if you have the additional time. It’s the month of September to help us review these applications.

Q: I certainly think it’s good to open the net wide, but at the end of the day, isn’t the call going to be made by someone who’s paid to do it?

WILHELM: Well, correct. The federal official has to make the final call. So the reviews are part of the decision-making, as the NOFA specifies. So we’ll take the evaluations of the reviewers, but as I mentioned earlier, we do have a due diligence phase to make sure we look at these things very carefully, and in terms of the business plans, the technical requirements, etc, so we’re funding projects that are worthwhile in terms of taxpayer investment.

Q: Yes. Of course, we have Ken Kuchno here with us in our studio. You two have worked together in the face of some doubts that you would be able to put together a joint NOFA. And actually, your agencies collaborated together on this extensive document here, and as I read it—and you’ve basically explained, Tony—you basically need to apply first to RUS if you have an infrastructure project that affects 75 percent of—75 percent of the project is in rural areas. Ken, could you just comment a bit on how that handoff will go? Is this basically saying that only those projects that have 75 percent rural will be funded by RUS as opposed to NTIA? Or will there be some area in which those projects that don’t meet your criteria will be eligible for NTIA review?

KEN KUCHNO, RUS: Well, when a project is at least 75 percent rural, they do have to come through the BIP program, first. But at that point in the application process, an applicant will be able to elect(?) whether they want to run their application jointly through BIP and BTOP. And in the event that it can’t meet all of the requirements for the BIP project—especially since, you know, some of ours will be combinations versus just straight grants,–and at that point, we find there are some problems on the financial side, or some other eligibility issues, then we will pass that—we will hand that application off to the BTOP program for consideration. So it’ll be up to the applicant to choose whether they want to run it through both programs, or just run that through the BIP programs, understanding that if they want to run it through both, that there are some requirements that are only BIP/BTOP related that they’ll have to fill out.

WILHELM: [indelible] the idea here is that, the choice is with the applicant to apply to—they must apply to BIP, but they can also apply to BTOP, and we will review those applications according to their own criteria. So we will certainly have the door open to be funding some projects that fit the BTOP standards, in terms of 75 percent rural. So it’s actually a lot of tools we have, frankly, to ______ grant-loan combinations. So, there’s really very few reasons that an applications that fits the BIP applications would be viable for a BTOP award. So this is a very great thing, for an applicant to be able to have those options.

Q: Could you give an example, Tony, of how an applicant might not be able to pass the RUS test, but still meet, or still potentially meet, the other aspects of BTOP?

WILHELM: Yeah. I mean, the obvious one is that they may not be able to take a loan. So we might be able to give a 100 percent grant as opposed to RUS, which is—unless they’re in a remote area—up to 50 percent grant. So there are obviously economic reasons for coming to BTOP. And it’s not just, we’re going to take the ones that aren’t viable. I mean, there are many viable projects that would come through BTOP that we would potentially fund, that just wouldn’t meet the RUS conditions.

Q: Ken, we had a question from the satellite broadband industry that we thought you might be able to help us clarify. The information people saw that came out of the NOFA came out of the BIP program and not be, you know, two overlapping projects. So, the satellite broadband industry has been raising a few questions over the last couple of days. Well, how can you have a satellite broadband program, because, obviously satellite broadband will cover multiple areas. And of course, in the act, in the legislative history act, the point was made about technology neutral, and satellite broadband was all over it. So I was just wondering, how you guys are going to address that. Because that limitation may be limited to just terrestrial systems? Or what do you have in mind?

KUCHNO: Well, to start off with, we’ve taken into account a number of places in our definition of unserved and underserved, and terrestrial versus satellite, and this question came up a number of times at both of the workshops we’ve just had out here in DC and up in Boston. And I don’t have the perfect answer right now. The intent wasn’t to exclude the satellite industry. So that’s really just one after the first two workshops that we’re taking back home with us, and we’ll sit down with NTIA and figure out the best way to address that. And obviously the best way to —overlapping, if we’ve made one award to a satellite company, then the whole country’s overlapped, and that was really never the intent. So we’ll have to take that back. So you know, both programs are intended to be technology neutral, so we really don’t want to exclude any technology, and I guess we’ll post that one on the website to clarify the positions of that, so we can get the satellite industry to get a better understanding of what we want to do with the program.

Q: That’s great to hear, and I just want to say one thing. You were talking about earlier, so as questions come up about this program, you know, the document—obviously that went very well, but obviously other things came up that one could not have thought of, so you’re going to be posting clarifications to the website and king of going for the basis of, questions come up, clarifications need to be made?

KUCHNO: Yeah, that’s what we intend to do with posting them up. Obviously, we’re not going to be changing the NOFA, so that’s going to be the under riding rule of everything. But you know, as things come up, we’ll try to post the best explanation up online so that people can understand it, and when they submit their application, it’s not because of a misunderstanding in the application that the application might not make it through. I mean, both of the programs are competitive, and as Tony indicated in his remarks, there’s not going to be back and forth going on with the applicant once the applications come in. So we want to make sure everybody fully understands what our requirements are, and some of them we’re learning, obviously, as we do these workshops, that we need to revise these explanations, and we fully intend to do that.

Q: You’ve all been very clear that there are many requirements that need to be met, and applicants that don’t meet them will be rejected. A couple of questions have come in about the BTOP program, Tony. Let me just put them together, this trio here. One concerns the E-rate, and can the e-rate be used in conjunction with BTOP funds, or as a matching component of the e-rate? That’s one interesting one. And another interesting one concerns schools and libraries. Can individual schools apply? I’m not sure if that’s directly addressed by the NOFA. And the final one on that topic concerns public computing center budgets being cut. The question is, would be a requirement for a library to commit to providing funding and education for a proposed public computing center? (36:10)

WILHELM: You’re throwing a lot at me there, Drew. So the e-rate, we’re still looking at that one. I don’t recall if we put that in the NOFA or not, so that will be part of our first FAQs. I don’t recollect if we considered that to be part of federal funding or not, and we’ll definitely get back to you on that one. Uh—what was the second one?

Q: Individual schools.

WILHELM: Right. I think the issue there is whether they can enter into a contract with NTIA. You know, some schools can and some can’t; some are part of a larger school system, and so they really need to know whether they can enter into a binding contract with NTIA. So, we’ve gotten some of those questions already, you know, with independent school districts. And the third one—I’m sorry—

Q: The third one was about library budgets. And to be eligible for a public computing center, does a library have to commit to providing training and education for the center? If they want to set up a center, or if they want to add terminals. So for that, do they need to say, “Ok, we’ve got all these line items, now for the training and budget?”

WILHELM: Well, the training’s definitely an important component of it. So we really can’t—uh, it really depends on the project. You think if you were providing the actual computers, the training part would be a very critical element of that.

Q: Sure, sure. Do you have some other questions?

Q: We’ve also gotten questions about the state recommendation process. Can you give us a little bit more of a sense—both from Ken and Tony—how the recommendation process is going to work? Particularly, the NTIA and the RUS, and the whole administration is taking great pains to make this whole process transparent, to eliminate influence lobbying from it. And I’m wondering, how do you keep that out of the state process as well, and how are you going to account for that?

WILHELM: Right. Well, that’s really in our statutes, so clearly we are—uh—we are asked by Congress to have a consultative role for the states, so the way we’ve done that is in two ways. One in the evaluation stage, we’re going to create synergy between the mapping efforts and the funding. Obviously we’re having a lot of comments come down from the Hill, for example—“we need to make this as data driven as possible”—we have a mapping element, we have a grant making element. And so to the extent to which in the evaluation part, states can come forward with empirical data, with maps showing the unserved and underserved areas, and we can make a link between those areas and other areas, and it can help us figure out what those priorities are.

And on the back end, in terms of a prioritization, states are going to come forward with helping us prioritize the finalists based on, again, what their state plans are, what the best way to move forward in the way they envision their states, and we don’t obviously want to be making grants that aren’t in alignment, necessarily, with the vision that the state has. So it’s really an important role we have here, as a consultative role for the states.

Q: Now I asked earlier about the application that may straddle the rural-urban divide gets considered. How about an application that straddles the middle mile/backhaul side or the last mile side, get considered? For example, one questioner asked: If an applicant constructs links for the purpose of backhaul, does that constitute a middle mile project, or is that part of a last mile project?

KUCHNO: Drew, on that one, I think we have a—we set the NOFA up and we’re going to look at, you know, what is the application predominantly doing? Is it predominantly doing the last mile piece or is it predominantly doing the middle mile piece? That’s how we’re classifying them, and then those applicants’ cases will fall into those particular buckets for consideration. A last mile project will obviously, in a lot of places, have a middle mile piece, but is that a middle mile project or, quote, a middle mile piece to support that last mile project? All we’re looking at is, is the application set up to be a true middle mile provider, or is it set up to be a last mile provider that has some middle mile components in it?

Q: Let’s talk—I mean, we’re really running out of time here, but we could go on for hours, unfortunately—do we have you for hours?

KUCHNO: No. (laughs)

Q: We don’t have you for hours. Let’s talk for a few minutes about interconnection and nondiscrimination. I mean, the interconnection and nondiscrimination requirements. First of all, we noticed, obviously, that those requirements apply to both the BIP and the BTOP program. I mean, under the statute it only applies to BTOP, and I guess the NTIA made the decision to extend it to BIP as well. Am I right?

KUCHNO: Yeah. From our side, the process of trying to develop a joint application, we wanted to make as many components in common as possible. Obviously there are some differences in the statute, but yes, we elected to go along with the nondiscrimination and the interconnection requirements that were placed on the BTOP program through their statutes.

Q: Ok, just following up on that for a second—those requirements, do those requirements only apply to the funded project, or is it like the tar baby, in which basically, they apply—once an entity gets a funded project, it applies to all those operations. How are those going to work?

KUCHNO: It really applies to the funded project. In reality, the company would have to make the decision of whether to apply that to half the company or all the company, but as far as we’re concerned, the requirement will tie directly to the facilities that are funded.

Q: Thank you. I wanted to ask another question of Tony here. This comes from a local government official who’s asking—that the NOFA seems to suggest that local government community anchor networks are last mile projects. Could you clarify how a local government that is not in the business of providing fiber to the home network service complies with the NOFA in submitting a community anchor network project?

WILHELM: Right. That’s a great question there. Different ways they could come in, potentially as part of a middle mile project, they could come in as a partner on a last mile project. In terms of the anchor institutions, being a partner with a service provider. So there are a lot of opportunities that are actually here for anchor institutions to participate, whether they’re library systems or school systems. So there’s definitely an important rule for them to play in this NOFA.

Q: Right. So one other question—we’re going to have to wrap up this panel, unfortunately—we noticed in the step two process that the applicant will have to submit required environmental authorizations and permits. And the question, we’re wondering—does that mean the applicant will have to go through the permitting process for a program before they know they’re going to be awarded the funds?

KUCHNO: Well, it’s not really a permitting process. It’s more of the NEMA (?) requirements. It is notifying the agencies in the area as to what those requirements will be. They won’t necessarily have to get all the requirements up front. They’ll have to get identified and get certain clearances from things, like the shipbuilding (?) estate—or, are you going through an endangered species area. And then those things will be taken into account, and be tied more to project specific requirements as they build. They will have to have them done before they actually do the construction, but they have to do a certain level in order to actually get the award.

Q: That’s a really important clarification, because the NOFA says required environmental authorizations essentially have to be in hand. But that’s not quite what you meant?

KUCHNO: There are certain ones. You only have to get into the NEFA requirements to fully understand, and some of them, you do have to have in hand. Like when I mentioned the Ship (??), the act from the (????) which says, this is cleared for these areas, you have to do that. So then the requirements placed on the awardee at that time, or the applicant at that time, and then we make the award. We put mechanisms on the lease to make sure the requirements of the other NEFA agencies that are putting the requirements on them, are truly fulfilled.

Q: The last question I would have for both of you, if you care, is the question of the point system. They seem to vary from project to project. On the BIP project, the community support only weighted at two points out of a hundred, and I can’t recall whether that’s the same on all of them, but how should applicants be thinking about the points system? When you’re trying to get a successful application together, are you saying that you need to cater it to the particular point systems of the pool being applied for?

WILHELM: Well, the best thing I think you should to is to look at the four categories that I mentioned earlier, and look at what we’re trying to do—give preference, priority to. Make the strongest case as to how you’re not only going to meet, but exceed, those expectations. So, on things like speed, on partnering, on developing collaboration across ARRA programs that we’re going to look at in totality, in terms of each bucket, and look at whether or not you’re meeting and exceeding the evaluation criteria as established in the NOFA. I think it’s slightly different with BIP, so Ken, if you could elaborate on this?

KUCHNO: Yeah, as far as we set up a slightly different arrangement with the BTOP program. We’ve broken ours down to a little more of discrete items, and we tried to put weight on the areas for successful projects, and to get our statutory requirements in place. You’ll notice there’s no points for rurality, for getting away from a non-rural area, and we put a lot of weight on the management of the project. We feel management’s important for a successful project, and these projects can be little, from a few hundred thousand dollars, to large, to a hundred million dollars. Things change in this industry every day and over night, so we want to make sure there’s a strong management team there. So we tried to place our points in a fashion, so we can get our statutory requirements done and meet the goals of the President and Congress, and to also ensure that we have a viable operation going.

Q: Well, thank you both so much. Before we let you go, do you have any final thoughts for our online audience?

KUCHNO: I’d just like to leave it with, we’re getting all the application material out there, the guidance out there, from both the BTOP and the BIP side. When you’re filling out the application, fill out the application with everything that’s asked for. Don’t forget to put something in there, and this is a competition, and it’s really—when you push the submit button on that electronic system, that’s really it. Your application’s in, and we’re receiving and evaluating it. So when you submit your application, make sure you’ve got everything you need in there.

Q: Tony?

WILHELM: Yeah, just, broadbandusa.gov will be the go-to place for all the information you need for this program, and I’d really just reinforce that—to read this NOFA very carefully. When the guidelines are out, they’re posted, and look at those very carefully. That will help—provide more—flesh out the issues that were brought up today and stated in the NOFA, and then applications will be posted there as well. As well as, as you mentioned earlier, the evolving answers to questions that are being posed in forums such as this. So that’s the place to go. We also have a help desk function, as well as a toll-free number to call, to get your questions into our process. Again, that is the go-to place for information. And also, again, we have a set of workshops that are underway. We have ten of these across the country, and we’ll actually be posting our slides, I think they’re actually on the website now, but we’ll be posting other information as necessary. So please, kind of use this website as your go-to place for this information on the broadband programs.

Q: Tony Wilhelm, NTIA, thank you very much. Ken Kuchno, from RUS, thank you very much. [/private_Premium Content][/private_Free Trial]

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Drew Clark is the Chairman of the Broadband Breakfast Club. He tracks the development of Gigabit Networks, broadband usage, the universal service fund and wireless policy @BroadbandCensus. He is also Of Counsel with the firm of Best Best & Krieger LLP, with offices in California and Washington, DC. He works with cities, special districts and private companies on planning, financing and coordinating efforts of the many partners necessary to construct broadband infrastructure and deploy “Smart City” applications. You can find him on LinkedIN and Twitter. The articles and posts on BroadbandBreakfast.com and affiliated social media are not legal advice or legal services, do not constitute the creation of an attorney-client privilege, and represent the views of their respective authors.

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