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The American Recovery and Reinvestment Act – better known as the $787 billion “economic stimulus package,” signed into law a few months ago – outlines some $7.2 billion in funding to be used to bring broadband coverage to un-served or underserved areas.

 

There’s been a lot of debate on the topic of broadband stimulus, and many in the industry have shared their views and opinions.

 

Among those on the frontlines has been ADTRAN (News - Alert).

 

The company – a Huntsville, Ala.-based networking and communications equipment provider – has leveraged what it calls the “Broadband stimulus Advisor” Web site to host Webinars and meetings on Capitol Hill, and ADTRAN officials say the company has positioned itself as a resource for customers and industry experts seeking to know more about broadband stimulus and associated technologies.

 

While many vendors and service providers debate over the means and methods of getting broadband to the masses, ADTRAN says it’s advocating for quality and reliability as the paramount factor in the broadband stimulus plan, primarily by:

 

 

In an interview with TMC President Rich Tehrani (News - Alert) that’s printed below, Gary Bolton, ADTRAN’s vice president of global marketing, answers a few questions about the broadband stimulus plan.

 

Gary Bolton (News - Alert): The biggest benefactor will clearly be the American public, especially those in underserved or un-served areas. Broadband availability brings with it a wealth of benefits, many of which some Americans will be able to take advantage of for the first time as the result of this program.

 

The National Telecommunications and Information Administration and the U.S. Department of Agriculture’s Rural Utilities Service will make their initial awards in November 2009, from the applications submitted from July 14 through August 14.

 

Following that initial award, there will be two more rounds of funding in the first and third quarters of 2010. There are two types of awards being offered from the $7.2 billion in available funds: the Broadband Technologies Opportunities Program from the NTIA, which accounts for $4.7 billion, and the Broadband Initiatives Program from RUS grants, loans and loan guarantees, which accounts for $2.5 billion. To qualify for a BTOP or BIP award, projects have to be shovel-ready and be substantially completed within two years of being funded.

 

GB: There are unintended consequences. The broadband stimulus plan was aimed at stimulating jobs and broadband expansion, but by not awarding money until late this year, the government has hampered or eliminated any broadband-based job creation for 2009. The fallout of this delay is not only affecting the service providers, but has also trickled down to the equipment manufacturers, consulting engineers and so forth. It has impacted the entire value chain. Until the money starts flowing, the plan has become an exercise in planning rather than an exercise in deployment on behalf of service providers. But ultimately, it’s the consumer who will suffer because they won’t be able to reap the benefits of broadband in a quick and effective way.

 

The good news is that while the recently released NOFA does not explicitly address “pre-application” construction expenditures as counting toward the 20 percent matching requirement, it does refer to “in-kind contributions” as counting toward the match. This would appear to also allow current investments (post July 14, 2009) to also count toward the 20 percent matching funds obligation.

 

All service providers are eligible but many will elect not to participate. However, during several of our recent broadband stimulus Webinars, surveys of participants – which included Tier 1, Tier 2, and Tier 3 service providers, consulting engineering firms and municipalities – more than 80 percent of the attendees indicated that they are going to apply for funding. Out of those that said they were going to apply, three out of five indicated that they thought they were “somewhat likely” or “highly likely” to get an award. However, some grant application stipulations may cause applicants to pause, such as interconnection and non-discrimination obligations.

 

GB: Obviously grants are favored over loans, especially with project serving rural, un-served markets where the business case just doesn’t work. Grants are critical to enabling viable business plans in these high cost per home passed communities. Unfortunately projects that address serving areas that are at least 75 percent rural must apply to the RUS BIP program first. As a result, serving areas that are rural but not remote (over 50 miles away from town with 20,000 people) are subject to a 50 percent loan / 50 percent grant award (versus 80 percent grants). On the other hand, BTOP (NTIA) awards are all grants and will fund up to 80 percent of the project. Hopefully RUS will address the definition of “remote” in subsequent funding rounds so that more rural communities will get access to broadband.

 

GB: With almost 25 years of history in supplying service providers with solutions, our customer base is already well-established in the target market that will apply for funding – especially Tier 2 and Tier 3 Service Providers. We have the number two leadership position in the United States. DSL equipment market, and we deliver a full portfolio of Fiber-to-the-Premise, Fiber-to-the-Node, DSL and Ethernet solutions. In addition, we have a large support organization which is very important for new service implementations. All these factors point to our ability to provide well-rounded, reliable, innovative and sustainable solutions ideal for rolling out broadband services on a national scale.

 

GB: Historically, RUS has awarded nearly 60 percent of its broadband funds to projects that are Fiber-to-the-Home or DSL based. We expect that trend to continue. Given the priority of NTIA and RUS to address community anchor institutions, we anticipate that many service providers will want to leverage Multi-Service Access platform, such as ADTRAN’s Total Access 5000 to be able to deliver FTTH, FTTN, DSL and business Ethernet services from a single platform. Both the BIP and BTOP programs reward applications with the most cost-effective solutions and give points for higher levels of broadband.

 

GB: It’s very important to educate policy makers and help them understand the difference between peak and sustained data rates – the goal of one of our white papers – because it all goes back to user experience. After all, the goal of the Broadband stimulus Plan is to go into markets that are un-served and turn up high-quality, reliable services. We want to make sure people in those markets have a positive experience with their broadband service. Part of that experience is being able to have a connection that works as well during peak hours as it does during off-peak hours.

 

We don’t want end users to be promised a high bandwidth rate only to find out that during peak hours, their connection is almost unusable. Some of the beneficiaries of the plan are going to be people that come online for first time ever and we all want that experience to be a pleasant one. This is why we are encouraging the FCC, NTIA and RUS to take a practical approach and encourage service providers to follow a sustainable subscriber growth model.

 

GB: It’s not enough to identify broadband services in terms of speed. The latency (delay) associated with the network connection, or the ability to send and receive data through the network, is equally important to speed, and in many cases more so, for interactive applications requiring response times that should be perceived by the user as instantaneous.

 

Even for non-real time applications such as Web browsing, small increases in network latency can have a multiplicative effect that result in latency, and not speed, frequently being the dominant factor in extended Web page download times. Again, we want to make sure that the FCC, NTIA and RUS take the best approach with regard to latency so new broadband users will have the best possible experience.

 

GB: The National Broadband Plan will be the most important piece of telecommunications regulation since the 1996 Telecom Act. It will have a far-reaching effect on the nation for years to come and will create a completely different paradigm for our industry. We are already starting to see how important it is, just from the initial FCC Notice of Inquiry on April 8 calling for comments from the public.

 

The FCC received over 500 submissions from over 250 organizations, not counting submissions from individuals. We won’t see responses from the FCC on the submissions until July 21, and the final plan will not be announced until early next year. However, we can expect this plan to have an effect on the nation as well as the world with regard to the economy and future broadband deployment.