Learn from California, Other States, Chong Tells NTIA, RUS
Federal broadband grant programs emerging at NTIA and RUS need cues, perhaps from states like California, which has been at the leading edge of state-level broadband stimulus work. In an e-mail interview, California Public Utility Commissioner Rachelle Chong offered her thoughts on what federal programs should expect and how they can benefit from state experience.
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To get maximum value under tight deadline, federal grant managers “should take recommendations from the state agency responsible for broadband issues,” the former FCC commissioner said: “This agency probably has strong opinions about where the unserved areas are, and what speeds are appropriate for those areas. Broadband mapping should be a high priority to avoid fraud, waste and abuse of these funds. I suggest they look hard at the criterion and weighting that was used in our current California program. Grants should be technology neutral. There should also be a monitoring process to ensure the grant money is spent as proposed.”
By the end of 2007 California had mapped broadband services, Chong noted. That meant the California Advanced Services Fund could focus its $100 million allocation not on background research but on aiding unserved and underserved areas, she said.
Even so, fund managers still faced preliminary tasks. “The biggest challenges were developing technology neutral criteria,” Chong said. “We gave a 40 percent infrastructure match for broadband infrastructure in unserved and underserved areas in California, for a two-year period.” Funding for the match came from a nickel-per-month surcharge on phone ratepayers that applied for two years, she said.
“We used the following scoring criteria for applications: funds requested per potential customers (40 points), speed (20 points), service area (15 points), timeliness of completion of project (5 points), pricing (10 points), guaranteed pricing period (5 points) and low income areas (5 points),” Chong said. An applicant could score a maximum of 100 points.
Using those criteria, the state ranked proposed projects, first for unserved, then underserved areas. Much discussion went to defining “unserved” and “underserved,” and in setting speed goals of 3 Mbps down and 1 Mbps up. Chong cited the definitions of “unserved” and “underserved” in the decision creating the Advanced Services Fund: “If an area is not served by any form of broadband, such that Internet connectivity is available only through dial-up service, that area is unserved. Where area is served by broadband, but where no facilities-based provider offers service at speeds of at least 3 Mbps download and 1 Mbps upload, that area is considered underserved.”
The process has schooled California fund administrators, whose experience should instruct federal grant managers and would-be applicants, Chong said. “For example, the 40 percent match may not be enough for some very high cost unserved areas, according to some incumbent carriers,” she told us.
The speed of grant distribution in California, or the lack thereof, bears consideration, according to Chong. “While we are still processing underserved applications, we have only approved $8 million of the $100 million so far,” she said. A broader program might mean greater momentum, she noted. “We limited the program to certificated phone carriers and wireless carriers registered with us,” Chong said. “We are now considering whether to include unregulated wireless ISPs.”
Chong urged that NTIA and RUS speed levels recognize both current generation and aspirational speeds. To thwart fraud and abuse, the federal programs should target “truly unserved and underserved areas,” she said. Both programs would do well to adopt her state’s criteria of funds asked for per potential customers to be served, speed, service area, timeliness of completion, pricing and guaranteed pricing period, and low income areas served, she suggested.
Federal grants should reach beyond infrastructure, Chong said. She said she sees as grant-worthy “things like purchase of computers, training of personnel, tele-education and telemedicine equipment and staff, etc.”