Broadband Stimulus: How Much?

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paolo.franzoi 12/5/2012 | 4:11:30 PM

re: Broadband Stimulus: How Much?
Your link does not work (there is an extra period in it), but I thought would copy this:
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As a part of the National Telecommunications and Information Administration (NTIA) of the U.S. Department of Commerce, the Technology Opportunities Program (TOP) promoted the widespread availability and use of digital network technologies in the public and non-profit sectors through grants for model projects demonstrating innovative uses of network technologies.

Types of Projects: From 1994 to 2004, TOP made matching grants to state, local and tribal governments, health care providers, schools, libraries, police departments, and community-based non-profit organizations. TOP projects demonstrate how digital networks support lifelong learning for all Americans, help public safety officials protect the public, assist in the delivery of health care and public health services, and foster communication, resource-sharing, and economic development within rural and urban communities.

Grants Database: To date, TOP has awarded 610 grants, in all 50 states, Puerto Rico, the District of Columbia, and the U.S. Virgin Islands, totaling $233.5 million and leveraging $313.7 million in local matching funds. Information about these grants are available through a searchable grants database.

Grantee Websites: Links to the websites of nearly 300 TOP grantees in 49 states and territories are also searchable by state.

Grants Management: As a resource to current TOP grantees, this page provides online access to handbooks, standard forms, and additional links and information.
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Note $230M given over 10 years versus $4.7B over 18 months (all grants need to be given by 9/30/2010).

seven

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OSXman 12/5/2012 | 4:11:27 PM

re: Broadband Stimulus: How Much? seven,

I am not sure I really understand what you mean when you say that Occam doesn't have a growth strategy. It has been a tough five years, but Occam has grown quite nicely.

Either way, even if they didn't have a viable growth strategy, the government just handed one to them.

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OSXman 12/5/2012 | 4:11:27 PM

re: Broadband Stimulus: How Much? seven,

It's not humorous math at all. It bespeaks a serious investment opportunity in my mind.

The RUS lent about $1.2 billion over the past eight years. Now they giving out $6 billion as GRANTS, all of which has to be done in a period of two years or so.

It's not worth arguing over what Occam's tier 2 share is. This is a major opportunity to dramatically increase their business. In a way, the stimulus bill could not have been better for Occam had they written it themselves.

I am not sure how the grant money will work, but my guess is that the government isn't paying 100% of anything. If I had to guess, the government will say something along the lines if you spend $10mm, we will grant you a like amount. Therefore, the $6b of spending is really potential double that.

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Niles_3.0 12/5/2012 | 4:11:26 PM

re: Broadband Stimulus: How Much? <<they 08.="" at="" earlier="" in="" level="" losing="" money="" revenue="" this="" were="">>

That does not look to be true. Revenues increased $5.5mm since Q1 2008 or 28%:

Q1 2008= $19.6mm
Q2 2008= 22.8mm
Q3 2008= 25.1mm

SG&A decreased from $8.3mm in Q1 to $6.7mm in Q3, a drop of $1.6mm. While one could argue the drop in SG&A did help Occam reach profitability, one could also argue that the $5.5mm increase in revenues did as well.

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paolo.franzoi 12/5/2012 | 4:11:26 PM

re: Broadband Stimulus: How Much?
What I said, and you can go back and read it - was that revenue growth was not the reason for being break even. They were losing money at this revenue level earlier in 08.

seven

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paolo.franzoi 12/5/2012 | 4:11:26 PM

re: Broadband Stimulus: How Much?
RUS - part of the agriculture department - is not giving out the bulk of the money. RUS is giving out $2.5B in loans, loan guarantees and grants.

NTIA - part of the commerce department - is doing the $4.7B. It is doing this in grants for up to 80% of a project.

Perhaps you should read the bill.

seven

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paolo.franzoi 12/5/2012 | 4:11:25 PM

re: Broadband Stimulus: How Much? "The RUS lent about $1.2 billion over the past eight years. Now they giving out $6 billion as GRANTS, all of which has to be done in a period of two years or so."

That is your last post OSX.

Niles at $22M they were losing money. Now they are making money. $1.6M in Opex savings equates to over $6M in revenue increase.

seven

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OSXman 12/5/2012 | 4:11:25 PM

re: Broadband Stimulus: How Much? I have read the bill.

Like I said, the RUS is giving out $2.5b in over perhaps the next 18 months, more than twice as much as it gave out in loans over the preceding eight years.

The NTIA is giving out $4.7b. There is no history, but the purpose of the grants is the same--to deploy broadband in unserved and underserved areas, i.e. rural America. Occam does not have any history with the NTIA, but neither does anyone else. No reason to think they won't be a significant beneficiary.

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