TMCnews Featured Article

October 26, 2009

How Broadband Stimulus Could Help Michigan: Talking to Merit Network

By Michael Dinan, TMCnet Editor

Since the financial markets collapsed late last summer, no state in the Union – not even New York, home to Wall Street itself – has received more scrutiny from politicians and media than Michigan, home of the “big three” auto makers, eventual seekers of taxpayer funds.
That scrutiny yielded some hard-to-swallow facts for a state that long has relied on and answered the need for a strong manufacturing base.
Yet, as one applicant for federal funding under the broadband stimulus program told TMCnet in an interview, it’s critical now for the Wolverine State to transition from an industrial-based economy to one that addresses a digital, information and service-based marketplace.
“Broadband access is a critical component for economic development, and our proposal will deliver high-performance connectivity to businesses in regions where it is currently unavailable,” Donald Welch, president and CEO of Merit Network, Inc., told TMCnet in an interview that’s printed in full below.
Welch’s organization, a nonprofit group that provides networking and services to research and education agencies in Michigan, applied for funding to support its so-called “REACH Michigan Middle Mile Collaborative.” The partnership, led by Merit-Michigan’s research and education network, engages Merit with four commercial providers to share a 955-mile extension of Merit’s advanced fiber optic network to serve anchor institutions, households and businesses. Merit applied for a grant to cover 80 percent of the total cost of the project, which is estimated at about $41.6 million, while matching 20 percent of the total cost upfront, with the potential to match more with contributions.
For Welch, bringing broadband to more businesses in Michigan is necessary for short-term growth.
“For the long-term revitalization of our workforce, we need an educated populace well-versed in information-based technology,” Welch said. “Merit has supported the education community in Michigan with leading-edge network resources for more than 40 years.”
Our exchange follows.
TMCnet: We’ve read the Executive Summary of your application, and clearly the organization feels there’s a strong need for funding. Take us a little bit beyond the numbers. How will U.S. citizens, consumers and businesses benefit if you’re awarded this grant money?
Donald Welch (pictured left): REACH-3MC’s partnership with private sector entities will not only extend service, but it will also bring increased competition to the unserved and underserved communities in Michigan that make up our proposed service area. This will keep the cost of service low, while significantly improving the quality of service available through high-capacity bandwidth.
As Michigan faces significant economic challenges, our state must transition from an industrial-based economy to one that is centered in a digital, information and service-based marketplace.
Broadband access is a critical component for economic development, and our proposal will deliver high-performance connectivity to businesses in regions where it is currently unavailable. Bringing broadband to more businesses in Michigan is necessary for short-term growth. For the long-term revitalization of our workforce, we need an educated populace well-versed in information-based technology. Merit has supported the education community in Michigan with leading-edge network resources for more than 40 years.
In letters of support written for our application, institutions of higher learning have indicated that our fiber proposal will translate to higher student and retention and enrollment at community colleges and more opportunities for residents in our service area to pursue baccalaureate degrees via satellite campuses and online courses.
Our proposal will make high-bandwidth applications available to K-12 schools and ISD(s) to improve educational programming. This will better prepare Michigan’s students to contribute to an economic environment that will be very different from that of today.
Merit is Michigan’s exclusive Internet2 connector and this proposal will also extend a new world of enriching educational opportunities to schools in unserved and underserved regions for remote learning and collaboration between organizations across the nation at shared, reduced costs.
Libraries and social service organizations will no longer have trouble meeting the demand for Internet connectivity at their agencies for the public to access governmental support programming and perform employment searches as they have described.
Our proposal will also enable health care facilities to improve administrative efficiency with electronic medical records and allow health systems to better serve their constituents with telemedicine applications that are essential to administering care to vast, remote areas with low population density.
Finally, the REACH-3MC will provide state and local governments with infrastructureto transform the way service is delivered to citizens, improving the quality of life across the board and enhancing safety and security. Certain services that improve enterprise operations can be problematic for government use due to pricing. Merit leverages the economies of scale gained by serving the education community with its control of the private network to make these important technologies available to governments at below market costs.

TMCnet: How did you find the application process? What would you recommend the U.S. government tweak in the process, if anything?

DW: The folks here at Merit put in some very long hours to complete what proved to be a great deal of work in an incredibly short timeframe. I’m sure they will agree when I say that the application process was onerous and frustrating.
Of course, we didn’t mind doing the work. It was reassuring to read the application and NOFA and come away with the impression that the Federal Government was not just going to give away the billions it was charged with tending to. The NTIA and RUS put forth a solid effort to create a comprehensive application; though, I think nearly everyone who participated will agree that they missed the mark in a lot of key areas. When you spend a significant amount of your time simply trying to make sense of the application rather than completing the requirements of the application, and you hear the same from nearly everyone else in the industry undergoing the same process, there is a huge problem.
The real frustration came from the confusing and sometimes contradictory language of the applications. Instructions were not clear. Definitions which the application relied heavily upon were just plain vague.

How does one define a service area for a Middle Mile fiber proposal? A good methodology for determining finite parameters doesn’t exist. The service area of a Middle Mile proposal is largely determined by Last Mile (News - Alert) networks.
The definitions of “underserved” and “unserved,” even “served” did not seem appropriate. We have Members in regions of Michigan that anyone familiar with our state would consider remote and unserved—the geographic and population density challenges that have kept fiber out for so long are obvious. But those same Members were shocked to learn that their locality met the “served” definition according to the NOFA.
The NOFA defines “underserved” and “unserved”inreference to proprietary data like subscribership and service availability that telecom providers simply do not disclose with third parties.
Anchor institutions were given explicit priority in the ARRA Legislation; whereas this NOFA made it very difficult for them to complete an application to be eligible for funding.
I am certain that our Members would like to see the upcoming NOFA more receptive to proposals that would connect anchor institutions. There really should be more of an effort to give Anchor Institutions higher priority. They could designate a portion of funding specifically for anchor institutions or remove the “unserved” and “underserved” qualifications from anchor institution eligibility—because a school, library or hospital can be located in a served area and still lack the 21st century bandwidth it requires.

TMCnet: What would you tell reviewers at NTIA about your organization if you could have one minute to talk to them moments before they looked at your application?

DW: The REACH-3MC is a middle mile project that engages partners from the private sector to benefit all sectors of society. It will extend service to residences, businesses and anchor institutions in unserved and underserved communities in Michigan. Each sector will benefit from better quality service at a lower cost.
The REACH-3MC proposes to provide backhaul service into unserved and underserved areas. In these areas, up to 80% of delivering broadband service to the community can be backhaul costs. Our proposal will substantially reduce backhaul costs for local ISP(s).
Merit’s private sector partnership is made of entities that provide last mile service as well as entities that provide middle mile service. That means our proposal is guaranteed to usher in competition to these areas of the state where affordable, high-performance service has been lacking for so long.
Our proposal will not harm any existing or incumbent ISP in our proposed service area. It will enhance their service and allow them to invest more in their local communities. Merit offers interconnection wherever it is technically feasible at reasonable rates and terms. We encourage open settlement-free peering with providers and operators, just ask any of the 20-plus network providers with whom we peer.
Merit Network has a tremendous amount of experience operating a comprehensive network. Merit owns and operates the longest-running research and education network in America. The 1600-plus fiber miles that make up our regional network are all lit and managed by Merit.
In the late 1980s, Merit Network played a pivotal role in the National Science Foundation Network (NSFNET)—the precursor to the commercial internet.
Today, our robust backbone features over 415 connections that benefit schools, libraries, institutions of higher learning, museums, public safety organizations, health care facilities and county government offices. There are real and quantifiable benefits to be gained by connecting to an exclusive network for anchor institutions like Merit’s research and education backbone. Our members will attest to that. Increasing the scope and extending these benefits to other anchors in the state makes the network more beneficial to all.
Merit has a 40-plus-year history of bringing together diverse organizations to work together for the benefit of their communities. With our unique private sector partnership, we are confident that REACH-3MC is the perfect proposal to address Michigan’s broadband shortfall.

TMCnet: Tell us in plain terms how important it is for your organization to receive this grant money. If you do not receive government funding, what will you do to improve services in the way you’re seeking?

DW: The REACH-3MC is equally important for Merit Network as it is for the 400-plus anchor institutions the proposal stands to benefit. There is strong need for adequate and affordable broadband in these remote, unserved and underserved areas that our fiber route is oriented to address. Our current Members who are connected to our existing backbone will also benefit in a synergistic fashion, reducing their bandwidth costs and delivering more opportunities for collaboration. The extension of our backbone will also provide a comprehensive footprint that future broadband projects of all kinds can build off of with ease and efficiency.
So in that sense, it is most fitting to frame the importance of our proposal in the context of the entire state of Michigan. Five years ago, the Office of the Governor launched a broadband plan which as a goal sought to expand and upgrade service to every community across the state. If funded, our proposal and two others that we will partner on will expand our backbone so that it will impact nearly every county in the state.
Our proposal is also on par with the three other goals listed in the 2004 State plan as well: making affordable broadband accessible to any business in the state; ensuring a more efficient government for the 21st century; strengthening Michigan’s ability to monitor critical infrastructure. The Governor’s Office has given our project priority in their recommendations to the NTIA.
As Merit Network is Michigan’s regional research and education network we are heavily vested in providing network resources, service and support to community anchors and other non-profits throughout the state. That places us in a unique position to become a primary vehicle for Michigan to achieve its goals and produce real results from federal broadband investment.
Without federal assistance for the initial fiber build a project that aims to address problems with broadband access on a mass scale would not be possible for the state of Michigan.
The unique demography and geography of our state is such that it renders most attempts to extend 21st century service into many regions of the state very difficult. Essentially, that is why these areas have remained underserved while broadband is flourishing in other regions of the state. And that, in and of itself, speaks volumes about the utility of ARRA broadband programs like BIP and BTOP.
As a 501(c) 3 non-profit corporation receiving no fiscal support from any legislature, Merit Network works with grants and grant applications on a consistent basis. Over our 40-year history, we’ve established a strong track-record of appropriate use of governmental and grant funding.
If the request for funding submitted by Merit and partners is not granted, we will continue to move forward with our efforts, seeking alternative funding sources. Though it is likely that we will be forced to proceed at a snail’s pace compared to what Michigan could accomplish with what this opportunity presents.
We are heavily vested in the state of Michigan. Michigan’s future is our future. We will continue to do all we can to make sure that it’s a bright future.

Michael Dinan is a contributing editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To read more of Michael's articles, please visit his columnist page.

Edited by Michael Dinan