Alaskans seek $1.3 billion of broadband funds

Alaskan organizations have applied for US$1.3 billion in broadband deployment stimulus funding from the U.S. government, out of a total of $4 billion in funding available in the first round of grants and loans.

The 26 applications from Alaskan groups may demonstrate both the perceived need for broadband in rural states and optimism from some groups looking for a piece of the $7.2 billion available for broadband development across the U.S. The money is available through a huge economic stimulus package passed by the U.S. Congress early this year.

"I think the first step in trying to sort out all of these is to put these applications into three loosely defined categories: The dreamers, the hopeful and the planners," Craig Settles, a community broadband consultant and president of, said in an e-mail. "The dreamers, a.k.a. the 'In your wildest dreams' people who threw a proposal out there because lightning might strike and they'll get lucky. Like ... one state asking for a billion dollars. Entertaining reading, but not likely to get funded."

Alaska, with a population of about 690,000, has just over one person for each of its 656,000 square miles. The largest request for broadband money in Alaska comes from Kodiak-Kenai Cable, which asked for a $172.3 million grant and a $172.5 million loan to fund a submarine fiber-optic cable that would bring broadband to 140 communities in sparsely populated western Alaska.

The fiber project would create or save 5,800 jobs in 23 states, and it would enable telemedicine, distance education and economic development, the company said in its filing. A representative of the company did not return calls seeking comment on the application.

There may be some overlap in applications in Alaska and elsewhere. A second Alaskan company, Adak Eagle Enterprises, asked for $248 million in grants and loans to build an undersea fiber-optic network to bring broadband to the rural Aleutian Islands.

"The states that are at a disadvantage are the big, but sparsely populated ones such as Alaska," Settles said. "To rope 100 or 200 people together under one network is going to be expensive over most of the state because there's so much land between each person. If anyone proposed fiber, the cost is astronomical relative to the total number of people to be covered. Wireless is cheaper, but in the end it won't be cheap."

The U.S. National Telecommunications and Information Administration (NTIA) and the U.S. Rural Utilities Service (RUS) released a searchable list of broadband applicants last week, although the list does not include applications received by paper. The two agencies have received about 2,200 applications, asking for $28 billion in broadband grants and loans.

In comparison to Alaska, organizations from Texas, the second-largest state by area with 24.3 million residents, have requested about $1.1 billion in broadband grants and loans from NTIA and RUS, and North Dakota, with about 640,000 residents but only 71,000 square miles, has requested about $240 million in broadband grants and loans.

The optimism of Alaskan organizations may take a back seat, however, to RadGov, an e-government consulting firm based in Florida. RadGov alone has applied for $1.3 billion in funding, according to the NTIA and RUS records.

In one application, RadGov asked for more than $938 million to establish computer learning centers in areas unserved or underserved by broadband. In a second application, RadGov asked NTIA for more than $361 million to create a one-stop e-commerce, e-governance and information portal to help create sustainable demand for broadband.

Unfortunately, the economic stimulus bill authorizes just $450 million for public-computer-center and sustainable-broadband projects, although that authorization says the agency must spend "at least" that much.

RadGov did not return messages seeking comment on its applications.

On the other side of the spectrum, a handful of companies filed multiple small applications for broadband grants and loans. One of those was DigitalBridge Communications, a four-year-old wireless broadband provider based in Ashburn, Virginia. DigitalBridge filed 158 last-mile applications and one sustainable broadband application, totaling about $300 million, said William Wallace, cofounder and chairman at the company.

DigitalBridge's applications are based on a single county's broadband needs, and several ask for less than $1 million. One of the company's applications, for example, asks for $465,000, split between a grant and a loan, to provide broadband to parts of Decatur County, Tennessee. DigitalBridge would provide WiMax wireless broadband service to the county within six to nine months, according to its application.

"We found it easier to conduct the needed market surveys, network designs/mapping, and financial analyses on a county-by-county basis," Wallace said. "Moreover, we chose not to run the risk of submitting one large application, and then having a small number of counties be rejected, possibly disqualifying the entire application."

Companies filing multiple small applications may have been smart, Settles said. "The rules and political winds blowing around the stimulus program don't seem to favor multistate proposals," he said.

Asked about the applications, an NTIA spokesman declined to talk about specific requests. "While we cannot comment on the status of pending applications currently under review, we are encouraged by the diverse range of applicants and proposals from all 50 U.S. states and territories and the District of Columbia in expanding broadband across the nation," the NTIA said in a statement. "Each applicant will go through an extensive and rigorous review process and we will move quickly but carefully to fund the best projects to bring broadband and jobs to more Americans."

By the way, Settles defined "hopeful" applicants, as opposed to "dreamers," as those who started looking into filing applications in March or April, after the economic stimulus package passed Congress, or those from areas feeling left out after the two agencies released rules about who qualifies for grants and loans.

"They most likely have viable needs, but didn't have enough time to put together the best business plan," he said. "Others pretty much got hosed by the rules and/or were in no position to comply fully with all the nit-picky details, but they still submitted their plan in time, on a hope and a prayer."

A third category of applicants is the planners, he said. "Many in the third group already had a plan on the drawing board if not already completed months before the stimulus bill was passed," Settles added. "They have the strongest position. Hopefuls are in the 50/50 position. A lot will depend on how strong their political mojo is."

Copyright © 2009 IDG Communications, Inc.

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