TMCnews Featured Article

August 17, 2009

Broadband Stimulus Battle: The Backdoor Clause and Competing with Incumbents

By Craig Settles, Founder and President,

Remember back in February how many people joyfully pondered the possibilities with $7 billion to tackle one of our more vexing tech challenges. Granted, we figured a few things here and there could go wrong along the way. But the optimists held quiet faith.  
Well, six months and a weekend-from-hell later for some folks (anyone have to cancel their Woodstock tickets?), how strong is that faith?
On Friday, I spoke to the technology meltdown that re-defines irony, as the deadline for broadband grant applications was delayed due to server failure in D.C. No need to flail that particular horse again.
There’s a darker cloud hovering on the horizon. And unless some of you want to see months of intense effort flushed down the toilet, you should not only pay attention but also prepare to aggressively defend your turf.
You may have noticed in the NOFA a rule that I refer to as “the backdoor clause.” It gives existing service providers 30 days to review your application and challenge it, saying they already provide adequate service in the areas your network would cover.
Incumbents don’t have to provide data down to the address level, they can pawn off smoke-and-mirror maps with relatively useless data. Incumbents only have to “reveal” advertised speeds. They can hide other data behind non-disclosure agreements. All this plays in their favor.
The net of it all: incumbents could challenge the hard work you’ve done and what you know to be a lack of meaningful broadband access – and win. At this moment, there are no means in writing for applicants to defend their proposals. The access to adequate broadband you offer can be torpedoed by telcos gaming the system.
What are you going to do to protect your turf? What can we collectively do to fight against the rule? I developed one particular tactical approach. It pulls some lessons from Philadelphia’s 2004 smackdown of the Verizon/Comcast (News - Alert) attempt to kill that city’s wireless network. It’s likely you can add other approaches.
As we watch communities struggle over this latest speed bump on the road to broadband, and hope everyone gets their applications successfully uploaded sometime this month, there’s an important lesson to absorb before the Round 2 funding process starts.
Complying to the rules of ARRA funding without aggressively working to change those rules that work against communities and smaller providers ignores a political reality – the incumbents play a game of Keep Away to keep the field tilted in their favor.
Complaints to NTIA/RUS about rules that worked against communities’ best interests were met with “we’ll look at this in Round 2.’ But two weeks before applications were due, incumbents whined and moaned about the rules, wrote letters to NTIA and got in NTIA’s face in closed-door meetings. The result? Incumbents got last-minute concessions on rules they didn't like.
As a strategy consultant, my mission is to advise governments and private sector companies on the best ways to move their broadband project from here to there. I’m convinced that even with the best business and technology strategies, you can’t get there (successful broadband implementations) from here without also playing a game of political hardball.
As I stated in my blog post, it’s time for letter-writing, e-mailing, foot-stomping, political pressure applying, in-your-face-but-respectful insisting on changes in the rules! Too many people sat back and griped in the office rather than give full-throated voice to their concerns in the place where influence and pressure matter the most – D.C. Now, all of applicants’ time, money and hard work to get their proposals submitted could be for naught with one incumbent challenge.
So, while the next batch of applicants gird their loins for the Round 2 dash for dollars, you and everyone submitting Round 1 applications need to start a major pushback on rules that work against getting meaningful broadband to the people who need it most. In this game, you’re in it to win it! Else, why even bother?

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Craig Settles helps organizations use broadband technologies to improve government and stakeholders' operating efficiency, as well as local economic development.

Edited by Michael Dinan