If nothing else, the broadband stimulus package has given the public an insight into how government procurement works -- and the result is educational to say the least.

Michael Hickins, Contributor

August 13, 2009

5 Min Read

If nothing else, the broadband stimulus package has given the public an insight into how government procurement works -- and the result is educational to say the least.The National Telecommunications and Information Administration (NTIA) has $4.7 billion in grants to give out (the Rural Utility Service [RUS] has the other $2.5 billion), and to its credit has tried to make the process as open and transparent as possible. That said, several decisions have raised eyebrows and raised concerns that the deck is still stacked in favor of large incumbent carriers.

- Grant applicants have to justify their projects in part by proving that the area their proposal aims to serve is underserved or unserved, but the incumbent carriers can challenge those assertions. While NTIA chairman Larry Strickling has said the carriers will have to prove their challenges, there's no mechanism for grant applicants to defend their claims.

The NTIA did not respond to a request for comment on this issue. A spokesman directed me to the FAQ, which notes:

If the information submitted by an existing service provider establishes that the applicant's proposed funded service area is not underserved, both RUS and NTIA may reject the application.

- The deadline for filing initial grant applications with the NTIA is 5 PM eastern time tomorrow, but the number of applications has reportedly slowed the servers down to a crawl and even prevented the NTIA's software from properly uploading applications. If the servers crash, the NTIA is likely to give an extension, but what happens if they don't crash, but the system is merely unusable?

Craig Settles, president of Successful.com, a broadband strategy consultant, said "these folks should have listened when I advocated for a 30-day extension" more than a month ago.

- As a result of negotiations between the NTIA and incumbent carriers, providers no longer have to detail coverage data down to the specific addresses, just the service area, which can cover an entire town. This averages out the level of coverage, meaning people getting high speeds can skew the numbers so maps don't reflect entire blocks of subscribers with bad or no coverage.

Moreover, the incumbents no longer have to provide communities with actual upload and download speeds, just the advertised speeds.

- Philadelphia, which unsuccessfully attempted to create a free municipal wireless system in 2004, has submitted three proposals: (1) an infrastructure proposal for low income communities by census block, (2) a fiber ring, and (3) a middle mile proposal for the city borderline.

According to Settles

they're going after communities that are just as much underserved as rural areas, they've taken time to deal with the census track tedium and they have addressed a middle mile issue -- getting a fatter pipe into the city -- that the incumbents failed to address.

But, says Settles, Comcast and Verizon can "nuke the proposals" using the incumbent challenge clause. Settles says he expects the incumbents to challenge "because this proposal will siphon some $2 million in Verizon revenue."

- The NTIA is using teams of unpaid volunteers to review grant applications. The volunteers will be trained using a webinar and an hour-long conference call, which Settles criticized. "How expert is this supposed to be?"

Settles suggested that the NTIA should have followed the lead of the RUS, which used $27 million set aside by Congress to hire a professional team of reviewers.

NTIA spokesman Mark Tolbert defended the process in email, arguing that

there is a long tradition of professionals in scientific and technical fields providing peer/expert review on an unpaid or nominally paid basis. It is commonly considered an honor and a valuable professional experience.

Indeed, that's the principle underlying open source software. But given the time constraints and the diversity of expertise required, it doesn't explain why this approach is better than the RUS's.

And given that the broadband stimulus package is also a jobs package, I asked why the NTIA didn't hire professionals rather than use unpaid volunteers. Tolbert's response was that

by funding the BTOP [Broadband Technology Opportunities Program] grant applications themselves, we will be helping to create jobs and bridge the technological divide in communities across America.

- The NTIA doesn't preclude volunteers whose employers are applying for grants, but won't allow reviewers to review applications for projects located in states where their employers do business.

Regardless of any safeguards the NTIA may put in place (it hasn't elaborated on this issue), it's easy to see how conflicts of interest may arise. More disturbing, according to Settles, the identities of the reviewers won't be made public - ostensibly to protect them from undue pressures. Said Settles:

I find it pretty appalling. The public has no oversight to ensure competency, non-bias or accountability.

I asked Tolbert about this, but here too he referred me to the FAQ, which states:

we want to preserve the integrity of the process and not put reviewers in a position where they are contacted by third parties seeking to influence the selection process or gain non-public information.

Assuming the NTIA's servers don't crash, part one of the sausage-making process ends tomorrow. It will be interesting to see how transparent the approval process remains as projects are approved or denied.

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