While I was sorry to see the Business Section drop out of the Washington Post, I am glad if that contributed to this piece by Cecilia Kang getting on the front page.
Unsurprisingly, a lot of folks at David Isenberg’s excellent Freedom 2 Connect Conference this past week had a lot of attention focused on the stimulus. Most of the discussion has centered around NTIA’s Broadband Technology Opportunity Program (BTOP) Rather than around the US Department of Agriculture’s Rural Utilities Services (RUS) Program. After all, BTOP has more money ($4.7 bn to RUS’s $2.5 bn) more potentially eligible grantees, and more terms that will need definition.
But the $2.5 Bn for rural broadband is certainly nothing to sneeze at, and because of its more specific focus (rural infrastructure build rather than broader digital inclusion) and narrower set of eligible applicants, it may have greater opportunity to do some very clever things to maximize the impact of its spending. On the one hand, $2.5 Bn is more money than we have ever seen committed by the federal government to building rural broadband access infrastructure. OTOH, it is a pitifully small amount when compared to what most folks think it will take to bring meaningful broadband to rural America. Ideally, therefore, every dollar spent should stimulate more spending in this area.
Enter Geoff Daily at App-Rising, who writes this intriguing piece on how to leverage the wackiness of the financial system to our advantage (for a change). Unlike NTIA, which gives only grants, RUS can give loans and loan guarantees as well as grants. in fact, RUS has traditionally given loans and loan guarantees rather than grants. Geoff thinks this provides a way to turn the RUS $2.5 Bn into $25 bn in actual spending on rural broadband infrastructure. Unfortunately, it runs into a Dilbert-esque paradox. This is such an efficient and effective way for the government to use the money RUS is afraid that Congresscritters and pundits eager to declare the stimulus a failure will point to RUS’ “unspent” loan guarantees as a sign of waste and a failure to “spend” the money.
Fortunately, I think RUS can set up the program in a way that minimizes this risk.
More below . . .
One of my favorite conferences is Dave Isenberg’s Freedom 2 Connect. On a purely selfish level, F2C is within walking distance of my house at the extremely cool AFI Silver Theater. But more importantly, F2C brings many, many cool and knowledgeable people to discuss real important stuff of interest to pretty much anyone who reads this blog.
This year, I will actually be on the program to discuss the broadband stimulus and what it means from a policy perspective. If that were not enough (and, let’s face it, it isn’t), there will also be a keynote by NYT Columnist Tom Friedman, lots of cool panels by interesting people (I leave it to you to follow the link lest I offend someone by missing them) and lots of very cool and informative hallway conversation.
Sadly, because the conference is held one week early, we will miss Sea Chanty night at the nearby Royal Mile Pub.
Register before Friday and get $200 off the door price.
Stay tuned . . .
In a not entirely unexpected move, FCC Commissioner Jonathon Adelstein will shift over to the RUS program. One would be hard put to think of anyone better qualified to oversee spending to stimulate rural broadband deployment (granted, as regular readers know, I am huge fan of Adelstein’s and hardly impartial). Adelstein comes from a rural state (South Dakota) and has long been a champion of rural issues — particularly broadband and wireless deployment — at the FCC. Overseeing a program to spend $2.5B explicitly on rural broadband seems tailor made for Adelstein, especially if this is just the “down payment” for making sure that we make the benefits of high-speed access available to all Americans.
When Adelstein will get a chance to shift over, however, is less clear. The FCC has dropped down to the bare minimum for a functioning quorum of three commissioners. The Administration has now officially nominated Julius Genachowski for FCC chair. In theory, the Senate could hold a hearing, confirm Genachowski, and then shift Adelstein over to RUS at any time. In practice, however, some other considerations intervene. And while a few months might not normally make much difference in the grand scheme of things, the RUS, like the NTIA, is very busy at the moment setting the ground rules for the availability of the stimulus money. No one wants to show up after the rules are already settled, especially if you have some significant experience that would give you some strong ideas on how to spend the money effectively.
Some elaboration and speculation below . . . .
Some of you may remember Pennsylvania as the state where the battle to save muni broadband began when, around Thanksgiving 2004, the PA Legislature passed a law preventing local government from“competing with the private sector” by prohibiting state or local government from offering broadband services unless the local government solicited service from the private sector and got turned down. While that sucked from the perspective of the citizens of PA, it did help kick off the massive fight that blocked anti-muni broadband legislation in other states, such as Indiana and Texas.
Now, those whacky worshipers of the Gods of the Marketplace in the PA Legislature are at it again! As reported by Craig Settles, the Hon. Patrick Browne (R-Senate District 16), Chairman of the PA Senate Finance Committee, and several lesser acolytes of the Absolutist Free Market Faith have introduced SB 530. This bill would prevent the State of PA or any local government therein from taking any stimulus money for purposes that would “compete with the private sector.” Indeed, if I read it correctly, it would prevent PA or local government from ever engaging in any activity that “competes with the private sector” unless it was (a) related to higher education, (b) maintaining public parks, (c) “necessary services” defined as “those services that are critical for human safety and health, including fire departments, emergency services and medical services;” and (d) any current activity, but that activity may not be expanded.
More below . . . .
I have no doubt it seemed like a good idea at the time.
The official OMB Guidance to Federal agencies on how to handle stimulus money requires everyone to go through the federal grants portal Grants.gov. Given that the same guidance also requires agencies to coordinate with one another to further the broader interests of the legislation, to streamline things for applicants and grantees, and to track money disbursed under the American Recovery and Reinvestment Act (ARRA) from the moment it leaves the Treasury to the moment it is spent on a shovel, this would appear to make perfect sense.
So, being an independent contractor these days, I decided to try to see how easily the system worked. Surfing over to grants.gov, I see nothing directing me to ARRA, stimulus, or whatever. But that’s OK. Since I know I’m going to need to get registered, I click on the get registered link where — still no specifics about ARRA — I must now choose between registering myself as an organization or as an individual. OK, lets go with “organization.” Here I hit my first roadblock:
Step 1: Obtain DUNS Number
The DUNS number is issued by Dunn & Bradstreet, and appears to be something of a universal identifier for government purposes. Why the government outsourced this function is probably lost in the mists of time, but OK, whatever. Happily, Grants.gov has a link to the Dunn & Bradstreet site to apply for a DUNS Number. This includes the helpful information that, for some reason, Dunn & Bradstreet is a bit backed up at the moment as lots of people are applying for DUNS Numbers. As part of filling, I discover I first needed to figure out my Standard Industrial Classification (SIC) Code. Again, a helpful link takes me to the right website, so all I need to do is figure out if my new business is “consulting” or “business consulting.” so it’s just fill out the rest of the form, submit, and wait.
Now that I have my DUNS Number (did I mention there may be some wait, as they are backed up at the moment), I can proceed to the next step: registering in the Central Contractor Registration Database (CCR Database — and no, they do not provide the lyrics to Bad Moon Rising or any other song). After that, I’m almost ready start applying for actual stimulus money . . . .
I learned two things from this. First, anyone who thinks they might, possibly, perhaps, vaguely could someday want to apply for any ARRA money should go out and get themselves DUNS number so they can get registered in the CCR ASAP. And, to its credit, the OMB guidance said only about a zillion times that agencies needed to go out and evangelize to prospective grantees (especially little ones) to go get DUNS Numbers.
Second, and more importantly, Grants.gov needs an extreme makover — quickly. The idea that I need to get a number so I can register for another number to go into a database that will be redundant with other databases is rather ridiculous in this day and age. worse, it creates a serious barrier to every single desired outcome. The current systems, as it stands, not only makes it hard to apply (especially for small organizations or folks who find out about the procedures at the last minute), it makes it needlessly difficult for the Feds to track the ARRA money.
My recommendation below . . . .
I owe Craig Settles an apology for my snarky aside in my piece on what the broadband stimulus does. Craig has written his own rebuttal to the NY Times piece, in which he explains that the reporter lifted a single quote from a 30 minute interview out of context. In private correspondence (as well as in a comment on the original post), he has shown himself an advocate for rural broadband and certainly not a tool of industry. He also gets high ratings from Jim Baller, one of the real heroes of munibroadband and broadband policy generally.
I’ve amended the original post to take out any reference to Craig and the out-of-context quote.
Stay tuned . . .
Hey, suppose we had a rational way to evaluate business and home loan risk. I don’t think we can truly solve our financial/social crisis without fixing the underlying risk-valuation issue.
However it’s done, let’s imagine for moment that we had such a thing. Furthermore, let’s imagine that we had some way of assessing that risk relative to benefit for those doing the loaning. If the government is loaning, that means public benefit (under some political process).
If we did have such a thing, wouldn’t the most efficient way of stimulating the economy be to provide business and public loans at an interest rate based on that assessment? In particular, worthy projects might get zero or even negative interest, depending on how much we turned up the dial on desired stimulus. It’s not a blind hand-out, as borrowers have to justify their projects and make regular payments. The loan can be called in the usual way if payments aren’t made. The stimulus is in adjusting the balance-point of go/no-go.
Would Republicans support such a plan? Would Democrats? If labeled as a banking system, then I suppose neither. But what about defining it as a rational way of conducting the stimulus? With a side-benefit of kick-starting a more efficient and maybe less corruptible system of risk evaluation?