Economic Recovery and Reinvestment

Broadband Funding in the ARRA:   The BadgerNet Fiber Grant

 The DOA and AT&T continue to negotiate a BCN contract extension.

Program Description: A total of $7.2 billion was appropriated for broadband funding in the American Recovery and Reinvestment Act of 2009 (ARRA). The funding is being administered by two federal agencies. (1) The Commerce Department's National Telecommunications and Information Administration (NTIA) will receive $4.7 billion to administer the Broadband Technology Opportunities Program (BTOP); (2) The Agriculture Department's Rural Utilities Service (RUS) will receive $2.5 billion to administer the Broadband Initiatives Program (BIP). The overall purposes of the broadband language in the ARRA are:

• To provide broadband service (e.g., faster Internet access) to consumers in unserved areas of the country and improved broadband service to consumers in underserved areas.
• To provide broadband education, awareness, training, access, and support to libraries, educational institutions and other organizations to facilitate greater use of broadband, including more use by low-income, unemployed, aged, and otherwise vulnerable populations.

Note: The grant process to allocate the broadband funding closed in March 2010.

Late-breaking information:

More current information below may supersede information from previous months.

  May: The DOA and AT&T and the other carriers continue to negotiate a BCN contract extension. Many of the details have been resolved but there are still a few key issues that must be agreed to by both parties. The DPI has made it very clear to both parties that each day the contact extension is not signed is another day that our schools and libraries no not get the bandwidth increases they desperately need. For example, the majority of our libraries (52%) still have just 1.5Mbps connectivity. Many residential broadband customers have speeds faster than this.

Meanwhile, the UW-Extension is moving rapidly forward with implementing its $32.3 million federal broadband grant to help build or enhance community area networks (CANs) which are centered in four areas of the state: Platteville, Superior, Wausau and Eau Claire. Most of the initial federal reporting requirements have been completed and in some areas it is likely fiber will start to be deployed in late May or June. For more information and details see the UWEX grant application website or the brief Fact Sheet.

February 2011: The state Department of Administration (DOA) announced on February 11 that after detailed communications and consultations with the BCN vendor partners and federal grant authorities, that DOA will decline the $23 million federal grant intended to expand broadband and fiber to Wisconsin's schools and libraries. More information on this decision is in the attached letter from DOA Secretary Michael Huebsch. As a follow-up to this decision, the Executive Committee of the BadgerNet Advisory Council sent DOA a letter on February 24 asking a number of questions including:

• Who will pay for fiber when it is needed by a BCN customer, either at a current copper served site or at a new site?
• Will schools and libraries have to commit to stay on the BCN for the length of the contract extension (to November 2016)?
• Will a BCN contract extension to get us to the bandwidth levels stated in the grant, which were 20Mbps at $100/month for libraries; 100Mbps $250/month for school districts and library systems?

Note: With the decision to decline the grant, most of the information below is of historical interest only.

December: In late October the National Telecommunications and Information Administration (NTIA, the grant agency) sent the DOA a letter requesting a reply on two key issues still outstanding. DOA sent NTIA a reply on December 16. The two key issues that the DOA letter addresses are briefly summarized below.

1. Interconnection and non-discrimination requirements. This issue centers on the need for the carriers now providing BadgerNet service (AT&T and others) to allow competitors to connect to the carriers' networks. Non-discrimination is closely related to the Net Neutrality issue and, in brief, means that the BadgerNet carriers will not take any actions that block or impede the content transported by another carrier. (All information is treated in a "neutral" fashion.)
2. Security interest and non-transferability requirements. (This issue is stated in #1 below in the September update.) NTIA wants DOA to guarantee that the fiber funded by this grant be used for 20 years. However, state procurement laws generally do not cover such long-term agreements. The DOA alternative, which DPI thinks has merit and which we support, is to ensure to NTIA that broadband service and support will be offered to schools and libraries in the state for at least 20 years. (DOA is now required by state law to provide such services.)

The DOA letter provides more details on the above issues and it also requests that NTIA respond to the DOA proposals. It is not likely such a response will be forthcoming by December 31 and thus this issue will soon be the responsibility of Governor-elect Scott Walker’s administration.

With the grant in a state of uncertainty schools on BadgerNet that need a bandwidth increase should submit an application to TEACH. (See TEACH guidance on when to submit a request for more bandwidth.) TEACH is nearing its budget limit and unless the grant is approved and the BadgerNet contract extended very soon, TEACH will have to start prioritizing requests for bandwidth increases. (TEACH needs the 5 year BadgerNet contract extension to get significantly lower bandwidth costs from the carriers, thus stretching its funding. TEACH is now paying $205,000 more each month on the BadgerNet contract because the reduced costs the contract extension will provide are not in place.)

September:  The information below is from a September 16 meeting of the BadgerNet Advisory Council with AT&T and DOA. There are four main activities that continue to occupy the various parties working on the BadgerNet fiber grant. These are:

1. Federal interest in long-term use of the fiber
2. BadgerNet contract extension
3. Environmental Assessment;
4. Finalizing the list of participating schools and libraries and the project's budget.

All four of these activities must reach a final resolution before the project can move forward.

1. Federal interest in long-term use of the fiber. The National Telecommunications and Information Administration (NTIA, the grant agency) is understandably concerned that the $23 million in federal funding will have a long-term impact. The primary way to ensure this is to make certain that the schools and libraries can access the fiber for many years into the future. Attorneys from DOA, NTIA and the Wisconsin BadgerNet Access Alliance (WBAA) are working now to address this issue. (The DOA’s request that this condition be waived was denied by NTIA.)

2. BadgerNet contract extension. The current State contract with the WBAA consortium expires in November 2011, but the contract also has a provision for five one-year extensions -- to November 2016. AT&T staff (representing WBAA) and DOA administrators are meeting on a regular basis to resolve several outstanding issues on a contract extension.

3. Environmental Assessment. One of the federal conditions placed on funding the grant is that DOA needs to have an approved Environmental Assessment done for all 467 locations scheduled to receive fiber. Work on the EA is now underway with a target completion date of mid-October. Once completed, the information will then be sent to NTIA for review and approval. Assuming there are no major issues, approval is expected by mid-November.

4. Finalizing participation and project budget. DOA staff continue to work on finalizing the budget and finalizing the list of participants. It is expected that this work will be done in October.

Question: In light of the above information, an obvious question is: What is the time frame for fiber installation and bandwidth increases? The approximate target date to get the first three above activities completed is mid-November. After the three tasks are done the WBAA will prepare a new set of work-plans based upon the season and taking into account work that requires trenching (hard to do in winter) and work that does not. We will share this work-plan with you as soon as it is published.

Question: What does all this mean for a the 2011 E-rate application cycle? The DPI recommends that schools/libraries now on BadgerNet wait until at least mid-November before making any E-rate decisions related to bandwidth increases, new router requests, etc. This assumes the 2011 E-rate application time frame will be the same as in past years.

All the parties working on this grant appreciate your patience as we continue to work on the above tasks.  

August: The UW-Extension was awarded $32.3 million to help to build or enhance several community area networks (CANs). The CANs are centered in four areas of the state: Platteville, Superior, Wausau and Eau Claire. The grant will impact a total of 39 communities and 182 institutions. The project is based on a replicable process centered on community-driven design and needs. See the WiscNet Wire announcement for more information and more details are also available on the UWEX grant application website.

July: Many schools and libraries will indirectly receive over $50,000 in benefits from the BadgerNet fiber grant. For example, the average cost to install fiber in all 380 libraries is $61,500. For a specific breakout, see the fiber cost for each library in the grant. Of related interest, in October 2009 DPI submitted to the FCC Cost Estimates for Connecting Anchor Institutions To Fiber. This filing was made in response to an FCC inquiry on fiber costs as part of its developing the National Broadband Plan which was released in March 2010.

The BadgerNet grant requires that all 467 sites getting fiber have an environmental assessment (EA) done. This work includes documenting sites that are near flood plains or near the habitats of endangered species. Work on the EA is starting to move forward and it is expected to be completed by October. Most of the work will be done "behind the scenes" with no contact needed with the local school or library. Only after the National Telecommunications and Information Administration (NTIA) has accepted the EA and prepared a Decision Notice (DN) and Finding of No Significant Impact (FONSI) can the grant proceed with the actual fiber installation, the needed middle mile upgrades, etc. Another grant condition that needs to be resolved is satisfaction of the security interest required for the release of grant funds. This is explained immediately below.

DOA, the NTIA and AT&T legal counsel are discussing methods for establishing a "security interest" for an extended period of time in the asset (i.e., the fiber) developed using the ARRA funds.  The NTIA seeks to ensure that taxpayers receive a long term benefit from the asset, which is somewhat complicated because the asset (fiber) is not owned by the state but is instead leased through a limited term contract.  Several options are being considered to address this requirement.  DOA is discussing a BadgerNet contract extension with the Wisconsin BadgerNet Access Alliance while grant negotiations are underway.

June: Two key aspects of the BadgerNet Fiber project are the security interest and environmental assessment conditions placed upon the ARRA grant.  Grant monies are not available until the conditions are satisfied.  When the grant money is assured, the Department of Administration and the Wisconsin BadgerNet Access Alliance (WBAA, the consortium of telecommunication carriers that provide broadband connectivity and other services on BadgerNet) will be able to determine parameters for contract modifications.

On June 23 the Legislature's Joint Finance Committee approved, 16-0, using the federal grant funds for the BadgerNet fiber grant. It also asked DOA to provide by September 1 information on the source of funds for the required 20% state match, provide an update on the status of the contract extension and provide an estimate on the cost to educational agencies and the state's universal service fund for the Technology in Educational Achievement (TEACH) programs. For more information see the Legislative Fiscal Bureau's analysis of the BadgerNet fiber grant. The BadgerNet Advisory Council sent the Joint Finance Committee a memo stating its concerns that the contract extension issue is still not resolved. This memo also provides good background information on the relationship between the grant and the contract extension. The DPI and the school and library communities have encouraged DOA and WBAA to extend the BadgerNet contract so that the project can move forward. Each day of delay is another day in which our schools and libraries do not have the bandwidth they need.

April: Work at the state level continues. Just last week the Department of Administration received the final grant paper work from Washington, D.C. Work also continues on the environmental assessment for all 467 sites, which is required as part of the grant. Some schools and libraries have had site visits by their local telecommunication provider to review the proposed fiber path, etc. However, until the grant paper work and all the environmental reviews are done, no fiber installations can start. It is not possible to give an exact date when this preliminary work will be completed but it is unlikely many fiber installs will be done before the end of the school year in early June. Also, most sites that already have fiber will likely get their increase in bandwidth to 100Mbps over the summer months.

The University of Wisconsin System filed an application for the Round 2 broadband funding titled "Building Community Capacity through Broadband" (BCCB). The proposal is based on a replicable solution for community-driven design, governed by local anchor institutions who expressed a demand for improved broadband access. BCCB will use fiber-optic and WiMax infrastructure to serve 4 demonstration communities at 182 facilities run by 74 anchor institutions and covering 39 municipalities. See the UWEX Applications for BTOP Funding website for more information. Several schools and libraries are part of this UW effort.

March: We have added a new FAQ titled Implementing the State's BadgerNet Fiber Grant. This FAQ addresses the questions being asked now that the BCN fiber project is moving forward. Because this project is in the early stages of implementation some answers in the FAQ will be subject to further clarification. For more background information on the grant, see the August 31, 2009, FAQ below. It was also announced in early March that the Madison Metropolitan United Fiber Network (MUFN) received a BTOP grant for $5.1 million.

February: On February 17 the federal Department of Commerce announced that the state Department of Administration's (DOA) grant application under the Broadband Technology Opportunities Program (BTOP) had been funded. The application is to bring fiber connectivity to the schools and public libraries in the state that are on the BadgerNet Converged Network (BCN) but still do not have fiber. The application includes 467 sites in 382 communities across the state. See the following documents for more information on the grant. (Note: Approximately ten of the schools and libraries listed in the Excel file below will not be part of the final grant.)

• Article on grant – from DPI's Channel Newsletter
• Press release – from Governor Doyle
• Press release – from State Superintendent Tony Evers
• Executive Summary – 4 pages
• Executive Summary – 2 page abridged version
• List of Schools and Libraries – these are the schools and libraries included in the application
• Frequently Asked Questions – August 31, 2009 version

January: On January 15 the National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) released the second (round 2) and final Notices of Funds Availability (NOFAs) for the federal broadband funding. There will be $4.8 billion for grants and loans to expand broadband access and adoption. For this second round NTIA has created a "Comprehensive Community Infrastructure" category with emphasis on connecting schools, libraries and other community anchor institutions (CAI). There are other changes to the application criteria and process that will make it easier (compared to round 1) for CAIs to apply. For more information, see the following sites:

• Broadband USA. An official government site with copies of the NOFAs, press releases, fact sheets, etc.
• Table of Contents for the NTIA NOFA. DPI created this to help understand the framework of the NOFA.
• Summary of the NOFAs. A good summary from the New America Foundation.

The Department of Administration's BTOP application submitted in round 1 (see August update below) has reached a advanced review stage. DPI staff have assisted DOA, AT&T and other carriers in submitting considerable follow-up information as requested by NTIA.

November: On November 16 the National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) issued a public notice seeking comments on the second (and final) round of broadband grants. Below are several highlights of comments filed by DPI.

• Grant priority: In their request for information NTIA and RUS ask if they should focus on "funding projects that will deliver middle mile infrastructure facilities into a group of communities and connect key anchor institutions within those communities?" Our answer is: Absolutely! Round 2 should give high priority to ensuring sufficient high-speed broadband to community anchor institutions. Another grant priority should be given for broadband investments that will yield long-term benefits. With very few exceptions this means fiber connectivity should be given a priority.
• Grant application: Applications to bring sufficient broadband to anchor institutions should have a category titled "Connectivity to Anchor Institutions." In round 1, connectivity to anchor institutions was labeled a "Middle Mile" category, which was confusing.
• Terms and definitions: Service to anchor institutions was dependent on meeting definitions of unserved and underserved. Yet in round 1 these terms were defined in the context of telecommunication carriers serving household customers. Community anchor institutions are not telecommunication carriers and they are not household customers. Therefore, the terms "unserved" and "underserved" should not apply to community anchor institutions.

For more information see the following:

• 2-page summary of DPI's comments
• Complete, official DPI comments (filed with NTIA/RUS)
• Listing of all comments filed (over 150 were filed)

August: On August 19 the State of Wisconsin, Department of Administration (DOA) filed a grant application under the Broadband Technology Opportunities Program (BTOP). The application is to bring fiber connectivity to the schools and public libraries in the state that are on the BadgerNet Converged Network (BCN) but still do not have fiber. The application includes: 74 schools or school districts; 385 public libraries; 8 higher education campuses. This represents a total of 467 sites in 382 communities across the state. The following documents provide more information on this application.

• Executive Summary – 4 pages
• Executive Summary – 2 page abridged version
• List of Schools and Libraries – these are the schools and libraries included in the application
• Frequently Asked Questions – August 31, 2009 version

July: Grant guidelines and application forms became available on July 1. They are available on the Broadband USA website. The application filing deadline was August 20, 2009.

May: The DPI has published an ARRA Broadband FAQ, both with and without Wisconsin-specific information. Both FAQs were updated on May 26.

• ARRA Broadband FAQ - WI specific.
• ARRA Broadband FAQ - General. This does not have the Wisconsin-specific information.

April: On April 10 the DPI filed comments with the NTIA that included recommendations on how the broadband program should be implemented and what priorities NTIA should consider when awarding grants. Key recommendations include the following:

• The NTIA should make fiber and its related infrastructure a grant priority
• Priority or preference in the grant ranking process should also consider:
  • Applications that support a State's list of priorities
  • Applications that provide long-term benefits (e.g., fiber)
  • Applications that seek to expand existing programs and services
  • Applications that show collaboration or partnerships
  • Applications that demonstrate a large regional or statewide impact
• Schools, libraries, and higher education all should qualify to submit grants for education, training, equipment, and support
• Grants addressing the education and training purposes in the law should have a streamlined application process.

Funding: There is $7.2 billion appropriated. Most of this funding will be distributed through a competitive grant process but some will be distributed as low interest loans. The federal share of any project may not exceed 80 percent.

Some of the funding is targeted at specific groups or for particular purposes. For example:

• There is a minimum of $200 million for competitive grants to expand "public computer center capacity." Public libraries and community colleges are specifically referenced as eligible for this funding.
• There is a minimum $250 million for competitive grants for innovative programs that encourage adoption and sustainability of broadband service.
• There is a maximum of $350 million allocated for the NTIA to develop and maintain a broadband inventory map.
• Most remaining funds will be for a large broadband deployment and expansion program.

Application process: The application process is is explained on the Broadband USA website.

Timeline: There will be three application time frames: July - August 2009; November - December 2009; April - May 2010. The latter two time frames are estimates. All grant awards must be made by the end of the 2010 federal fiscal year (September 30, 2010).

Contacts:

• State DPI contact: Bob Bocher, 608-266-2127, robert.bocher@dpi.wi.gov
• State Public Service Commission contact: Gary Evenson, 608-266-6744, gary.evenson@psc.state.wi.us
• Federal contact: 1-888-861-5509, helpdesk@broadbandusa.gov

Links:

• DOA Grant Application Executive Summary
• DPI Comments Filed With NTIA
• Economic Stimulus - Broadband Information (from EDUCAUSE)
• $7.2 Billion for Broadband (from the American Library Association)
• Broadband Language in the ARRA (the complete broadband text in a more readable form)
• NTIA: Broadband Technology Opportunities Program
• DPI Recovery and Reinvestment Portal
• Wisconsin Office of Recovery and Reinvestment
• Recovery.gov

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For questions about this information, contact John K. DeBacher (608) 266-7270

Last updated on 5/23/2012 10:22:07 AM