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Pandemic and Funding Programs Increasing Investments in Broadband and M&A, Conference Hears

Broadband money programs and a need for connectivity is driving capital into the space.

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The experts hosted by Broadband Breakfast at the Digital Infrastructure Investment conference on September 27.

HOUSTON, September 27, 2021 – The pandemic and President Joe Biden’s infrastructure agenda are accelerating investments and mergers and acquisitions in broadband related ventures, according to panelists at the Digital Infrastructure Investment conference on Monday.

Experts hosted by Broadband Breakfast said trends that are emerging from the pandemic, the $1.2-trillion infrastructure bill that is now before the House and the Federal Communications Commission’s $9.2-billion Rural Digital Opportunity Fund, are bigger and accelerated investments not just in broadband, but in non-traditional markets.

Digital Infrastructure Investment 2021 was hosted as an online and in person conference by Broadband Breakfast at the Broadband Communities Summit. The recording of the Monday event is available for registration and replay.

“I think [the pandemic] it opened up new markets,” said Lindsay Miller, a partner at law firm Ice Miller. “Whereas for a long time investment was being made in the metropolitan areas, in the big cities, where the return on investment was pretty much certain and likely to be quick, now we’re seeing more investment in small-to-mid-sized cities and rural markets, especially because, in the pandemic, more folks may have relocated to those areas or stayed in those areas.

“So I think we’re seeing a lot of changes in terms of where these investments are taking place,” she added.

For mergers and acquisitions, James Wagar, a partner at Frontbridge Capital, noted companies are buying service providers at very high valuations and using government grants to upgrade the networks.

That strategy may benefit areas that need connectivity fast, as Ryan Carr, a partner at MC Partners, said when he described how some are using the FCC’s RDOF money. He used the example of winners of RDOF money who see that some local service providers can’t provide high enough internet speeds and so they buy the provider and just upgrade the networks.

“They view that as an easier way to get to market faster, rather than them going out and building that network all over again,” Carr said, adding it’s akin to a land grab as it’s not about a thirst for connectivity and how fast you can build out. “So you may be able to go out and buy a local WISP or local ILEC, or whatever it may be…and upgrade their infrastructure as a way to get to market faster.”

Carr added that he expects “continued M&A and a lot more institutional investor interest in this space and continued progress and accelerated investment.”

Local focus a big plus in infrastructure bill

Carr also noted that the infrastructure bill’s focus on state or city level funding, instead of being divvied out from the federal government will give more opportunities for smaller providers perhaps more attuned to their communities.

It gives a “lot of opportunity for smaller providers to access those funds, rather than it just going to a Charter or A&T. A lot of this is going to come down to, how good is your relationship with your local community and your local municipality,” Carr said.

Miller agrees, stating that this is a unique moment for partnerships and new approaches that can be taken for broadband expansion.

Wagar said in the pacific northwest, the state broadband offices are becoming more active and they “want to give the money away,” if you come with a viable plan.

The session was moderated by Drew Clark, Drew ClarkEditor and Publisher of Broadband Breakfast and Of Counsel to The CommLaw Group.

Managing Editor Ahmad Hathout has spent the last half-decade reporting on the Canadian telecommunications and media industries for leading publications. He started the scoop-driven news site downup.io to make Canadian telecom news more accessible and digestible. Follow him on Twitter @ackmet.

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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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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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CES 2023: NTIA to Address Broadband, Spectrum, and Privacy, Says Alan Davidson

Alan Davidson asserted that marginalized communities are harmed disproportionately by privacy violations.

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Photo of NTIA Adminstrator Alan Davidson

LAS VEGAS, January 7, 2023 – The National Telecommunications and Information Administration’s 2023 priorities will include the funding and facilitation of states’ broadband deployment programs, the development of a national spectrum policy, and actions to protect the privacy of marginalized groups, said Administrator Alan Davidson at the Consumer Electronics Show on Saturday.

The NTIA’s most high-profile task is to oversee the operations of the Broadband Equity, Access, and Deployment program, a $42.45 billion slush fund for broadband-infrastructure deployments which will be divided among the governments of states and U.S. territories. Those governments will administer final distribution of the BEAD funds in accordance with the NTIA’s guidelines.

“This is our generation’s big infrastructure moment,” Davidson said. “This is our chance to connect everybody in the country with what they need to thrive in the modern digital economy, and we are going to do it.”

Davidson reiterated his agency’s stated intention to develop a comprehensive national spectrum strategy to facilitate the various spectrum interests of government and private industry. To allocate spectrum in a manner that fulfills federal needs and stimulates the growth of innovators, largely in the sector of 5G, the NTIA – the administrator of federally used spectrum – must coordinate with the Federal Communications Commission – the administrator of other spectrum.

Calling for a national privacy law, Davidson asserted that marginalized communities are harmed disproportionately by privacy violations. He stated that the NTIA will, possibly within weeks, request public comment on “civil rights and privacy.”

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