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TPI President Wallsten Defends Reverse Auction, Points to Mapping Flaws in Light of RDOF Defaults

In an interview with Broadband Breakfast, Technology Policy Institute President Scott Wallsten blamed bad mapping for RDOF mess.

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Photo of Scott Wallsten delivering his opening remarks for TPI's 2021 Aspen Conference.

ASPEN, Colorado, August 19, 2021—Scott Wallsten, president and senior fellow of the Technology Policy Institute, on Monday defended the reverse auction process used to divvy up funds from the $9.2-billion Rural Digital Opportunity Fund in light of winners having to default on territory that new mapping shows are adequately connected.

In an interview with Broadband Breakfast at the 2021 Aspen Conference that his organization was hosting, Wallsten said the issue with the growing number of defaults is not the process by which money was awarded, but the mapping that led to a recently increasing number of companies approaching the Federal Communications Commission with admissions the areas they promised to serve are already served. (More companies have filed defaults in recent days.)

“The FCC is taking the wrong approach to mapping,” argued Wallsten, who had a recent op-ed about his views published in The Hill. In his view, the FCC is “going too micro,” that is, trying to establish the precise coverage of exact addresses rather than simply getting accurate broadband data for an entire region or census level. He explained that this fixation on microdata contributed to areas being mapped incorrectly during the RDOF process.

Though Wallsten defended the reverse auction – which awards money to those promising to build with the least amount of subsidy – component of RDOF, he was not without his criticisms. Wallsten pointed to some of the surprising bids brought about by small companies or those using emerging technologies, such as SpaceX’s low earth orbit constellation, Starlink.

“Who ought to assume the risk?” He explained how because companies secure payment before completing the project, some argue that smaller companies bite off more than they can chew during the bidding process.

“It’s hard to say [how changing this would impact bidding strategies].”

Though Wallsten does not want to discourage innovation and the use of new technologies, he does not want taxpayers to be the party left holding the bag.

“We want new technologies—just not on the taxpayers’ dime,” he said. “If [Elon] Musk believes in Starlink, let him front the money.”

Internet speeds standards

Another topic Wallsten addressed was the recent movement for faster internet standards and symmetrical speeds.

Wallsten is calling the push for 100 Megabits per second symmetrical speeds “nonsense,” arguing that the only reason that there has been this push for symmetrical 100 Mbps, and even Gigabit speeds, is to push fiber on consumers. “There is no other reason.”

Wallsten clarified that he believes that fiber plays a critical role in networks around the country, but that nobody needs gigabit speeds. In response to the criticism that fiber will be necessary to create and maintain future-proof networks, he refuted the premise of the problem, stating that the term “future-proof” itself is loaded, and assumes that spending a lot now is inherently better than spending a lot in the future, which he argues may not be the case.

Wallsten pointed out that speed is only one aspect of a network—an aspect that, he said, receives an undo amount of attention. He stated that there are myriad other factors that may supersede speed in terms of what customers value in future networks—such as super low latency. Though he acknowledged that everyone enjoys faster internet speeds, he cautioned against diminishing returns as the speed increases.

“The difference between 1 Mbps and 5 Mbps is extraordinary—the difference between five and 25 is noticeable, but less so,” he said. “In terms of practical usage, there is very little difference between 100 Mbps and a gig.”

On the infrastructure bill

On the bipartisan infrastructure framework, Wallsten voiced his concerns that the federal government is beginning to distance itself from the reverse auction process in favor of simply giving money to the states and allowing them to distribute it as they see fit.

He reiterated that RDOF’s failings were due to inadequacies in mapping, and not the auctions process, but that politicians want to be seen as bestowing money on their constituents.

“Politicians love to give away money,” Wallsten mused.

Funding

NTIA Officials Urge Use of Agency Resources for Digital Equity Planning

Agency officials outlined helpful material for states looking to develop digital equity plans.

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Screenshot of Katarina Smiley, digital equity advisor at the NTIA

WASHINGTON, January 31, 2023 – National Telecommunications and Information Administration officials are urging states to take advantage of available resources when developing digital equity plans. 

The NTIA provides general technical assistance resources that the Commerce Department agency said both stakeholders and states will find helpful, including a list of best practices for digital inclusion activities, recommendations for preparing planning requirements, and a plan template. 

Accessing federal resources will set states on a “great path forward” to promote digital equity, said Richelle Crotty, technical assistance advisor for digital equity at an NTIA event Wednesday. 

Because stakeholder involvement is a crucial element to the program, the NTIA provides specific guidance on how to conduct accessible meetings and discuss keys to successful coalition operations.  

Stakeholder involvement cannot be overemphasized, stressed Katarina Smiley, digital equity advisor at NTIA. Communicate what the divide looks like in your community, share digital inclusion models and advocate for community research, she urged state leaders. 

The BEAD-DE Alignment Guide can help states align program requirements and coordinate activities across the NTIA’s $42.5 billion Broadband Equity, Access and Deployment Program and the Digital Equity Program. 

As part of the Infrastructure, Investment and Jobs Act, the $2.5 billion Digital Equity Program created three sub-programs to “ensure that all communities can access and use affordable, reliable high-speed Internet.” 

The first program, which is currently underway, provides $60 million for states to develop digital equity plans. The subsequent steps include $1.44 billion for implementing plans and $1.25 billion toward digital equity and inclusion activities. 

Currently, all 50 states have been awarded Digital Equity Planning Grants upwards of $4 million. Plans are required to identify the key barriers to digital equity faced by its population, measurable objectives for promoting broadband technology, steps to collaborate with key stakeholders, and a digital equity needs assessment. 

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Mayors Urged to Get Moving on State Conversations for Federal Broadband Funding

Time is running out to have cities’ voices heard at state broadband roundtables.

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Photo of Scott Woods (left) and Jase Wilson

WASHINGTON, January 18, 2023 – Representatives from a company that helps internet service providers and local governments get federal broadband money urged mayors of cities across the country Wednesday to quickly get involved in the process by actively engaging their state broadband offices or get left behind.

Scott Woods and Jase Wilson, vice president for community engagement and strategic partnerships and CEO, respectively, at Ready.net told the 91st United States Conference of Mayors in Washington that time was running out to have their voices heard at state roundtables.

Woods noted that the current version of the Federal Communications Commission’s maps are “overstated,” meaning there are inaccuracies in it. But if cities don’t have a plan or don’t come to the state broadband offices and plead their case for better connectivity, they will be left out.

The pair asked the packed conference hall at the Capitol Hilton whether they had conversations with their state broadband offices, but the vast majority did not raise their hands.

“The opportunity is now,” Wilson urged, adding the company’s Broadband.money has created a site and a broadband audit allowing mayors to get them up to speed. Broadband.money is a sponsor of Broadband Breakfast.

The National Telecommunications and Information Administration, which administers the $42.5 billion Broadband Equity, Access and Deployment program, has said that the accurate delivery of the money to connect the underconnected will be contingent on the readiness of the FCC map, which had a deadline to challenge its contents on January 13, 2023.

Each states is expected to be allocated at least $100 million by June 30, with many states receiving much, much more. After the June 30 kickoff, entities, including cities, can apply for a piece of the pie.

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Funding

Regulation, Reporting Requirements and Oversight Can Make a Difference in Grant Applications

Several documents will improve application competitiveness, said Paul Garnett of Vernonburg Group.

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Photo of Paul Garnett, CEO of the Vernonburg Group

WASHINGTON, January 13, 2023 – Regulation, reporting requirements, audits, and oversight can provide serious barriers to entities looking to receive funds from various federal broadband programs, said Vernonburg Group CEO Paul Garnett in a Thursday webinar hosted by wireless provider, Telrad.

These regulatory and financial barriers can make the difference between a successful and an unsuccessful project, he said. It is essential that applicants prepare all necessary documentation to satisfy requirements well before applying to these programs, he continued, identifying several key barriers states may face.

Irrevocable letters of credit, a guarantee for payment which cannot be cancelled during some specified time period, provide risk mitigation for program administrators and are often a key “difference maker” in making an application more competitive, Garnett said.

Its importance was highlighted as several applicants to the Federal Communications Commission’s Rural Digital Opportunity Fund won auctions for locations but were unable to qualify for funding due to not being able to raise irrevocable letters of credit, claimed Garnett.

Furthermore, he continued, audited financial statements spanning at least three years are often required for program applications. Regularly, applications will be rejected immediately when financial statements are omitted, he said.

Finally, although applicants may not anticipate a need, establishing lines of credit is an essential step to ensure that entities have the funding required for approved projects well in advance, said Garnett. He added that oftentimes, federal programs do not pay entities upfront but instead reimburse for expenses incurred.

Making Applications Simpler

The Vernonburg Group said it is working to make applications easier for entities by providing a simple visualization of basic mapping information in its free digital equity map released in December. Companies are able to easily create data visualizations and see correlation between national and local data sets, claimed its CEO.

The company works to help ISPs and state and local broadband program administrators identify locations eligible for funding by highlighting high scoring potential service areas on a heat map. It extracts availability, fixed broadband adoption, device ownership, and demographic statistics for any defined coverage area.

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