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Recovery Act: Everyone Wants to Rural the World

As Light Reading has been charting the effects of the Recovery Act on the world of telecom, we wonder: How much of the U.S. is really rural? How much is remote? And will the difference, as defined by the government's Notice of Funds Availability (NOFA), slow down some service providers from asking for federal help? (See Recovery Act: Tier 2 Says 'No Thanks'.)

As a starting point to answering those questions, Light Reading talked to The Gadberry Group. That research house uses a proprietary mix of consumer demographic data to create what it claims is the most up-to-date graphical view of occupied households and household population in the industry. And Gadberry says it can provide accurate information all the way down to a single city block.

Light Reading asked The Gadberry Group to take the NOFA definitons for rural and remote areas and run them against their household data and see what that looks like on a map. Here is the result:

For a bigger version of the map, click here.

According to the map, rural states like Alabama and Mississippi are, under the NOFA rules, mostly not considered remote areas.

That's a big deal, because vendors like Adtran Inc. (Nasdaq: ADTN), which sell to Tier 2 and Tier 3 service providers in the region, fear those companies might hold back before applying for federal help.

Why?

Some providers have a feeling that NOFA, which uses a five-point scale to grade broadband funding applications, won't permit the awarding of five full points for service providers aiming at rural areas (like Alabama), compared to those addressing remote areas (like Wyoming). These service providers fear that not getting the maximum amount of funding available on a project -- a full 80 percent -- will force them to settle for some mix of grants and loans.

"If you're talking about an area that you haven't been able to afford to address because it was too expensive on a cost-per-home basis... having a loan [instead of an 80 percent grant] doesn't make your business case work," says Gary Bolton, Adtran's VP of global marketing.

What helped stir those concerns is the fact that no one knew what the NOFA criteria were until after July 1, a month before the original first-round application deadline.

It could be that some of this consternation comes down to this: The service providers guessed how the Rural Utilities Service (RUS) and National Telecommunications and Information Administration (NTIA) would classify remote and rural areas, and they got it wrong.

How many service providers will wait and apply for funds next year? And how will the agencies in charge of the NOFA award points when grading broadband applications? Our humble map doesn't answer those questions, but the answers should be forthcoming.

The NTIA says it will post data about the number of application submissions it receives at the Broadband USA Website. It will also post executive summaries of those applications in the coming weeks.

In November, the NTIA plans to begin announcing its first round of Broadband Technology Opportunities Program (BTOP) awards here.

— Phil Harvey, Editor-in-Chief, Light Reading

DCITDave 12/5/2012 | 3:57:50 PM
re: Recovery Act: Everyone Wants to Rural the World

Random observations:

<ul>
<li>
<div class="MsoNormal">If you really want broadband service in the United States, it's best to live near Verizon's or AT&amp;T's major offices/corporate headquarters.</div>
</li>
<li>
<div class="MsoNormal">There's a pretty amazing East-West divide going on here. I guess that's expected given the way the population is spread out.</div>
</li>
<li>
<div class="MsoNormal">Is it just me or do there seem to be about as many red states on this map as you'd find on election night?</div>
</li>
</ul>

&nbsp;ph

&nbsp;

nin210485 12/5/2012 | 3:57:33 PM
re: Recovery Act: Everyone Wants to Rural the World

The criteria should be based on population per square mile.&nbsp;&nbsp; In Nebraska and most other midplains and western states you have areas with less than 0.2 people per square mile as close to an "urban" area as ten miles.&nbsp;&nbsp; So you have from&nbsp;10 miles to 50 miles or a forty miles space that gets less of a chance of funding.&nbsp;&nbsp; The people living in an area 50&nbsp;or more miles out (Remote Area) get funded and people living in the same type of low population density area living less than 50 miles out don't get funded for broadband.&nbsp;&nbsp;&nbsp; It cost just as much to place fiber between the closest neighbors that are 30 miles apart if they are&nbsp;ten, 20 ,30 miles from an "urban" area as it does to place fiber between neightbors living 30 miles apart that are more than 50 miles from an "urban area.


There is some difference in middle mile coast but that is small compared to getting the last mile facilities in place where the population density is 0.2 -0.4 people per square mile.

DCITDave 12/5/2012 | 3:57:31 PM
re: Recovery Act: Everyone Wants to Rural the World you make a great point. by not incorporating population density in the way you mention, it can cause some areas that are indeed remote to be treated as though they're still rural.

making a blanket set of rules for all the states was bound to be a difficult undertaking that inevitably will leave some areas wanting for broadband.
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