Friday, February 20, 2009

Rural Broadband: No Job Creation Machine

Original Article - New York Times

In a bracing refresher course on why they call economics the dismal science, a gathering of academics Thursday poured cold water on the idea that the new stimulus plan will create lots of jobs and improve the lives of many by wiring rural areas for broadband Internet service.

The gathering was a seminar in Washington sponsored by the business schools of Columbia and Georgetown to assesse the impact of the broadband stimulus.

The upshot was that most of the economists said the ability of broadband to spur economic development in rural areas is difficult to quantify.

“Everyone talks about the jobs that are going to be created by this,” said Scott Wallsten, a senior fellow at the Technology Policy Institute. “There is no way to measure that.” One problem, he said, is there’s no way to tell which of these jobs would have been created even without the stimulus bill.

Raul Katz, a Columbia Business School professor, admitted the difficulty in counting jobs, but he nonetheless presented a paper that tried to quantify the effect of the broadband stimulus program on employment.

“We know construction will generate jobs,” Mr. Katz said. By his count, the stimulus bill will create 128, 000 jobs designing, building and administering the broadband networks. That figure also includes a multiplier effect that assumes that every 10 people directly hired by these projects will spend enough money to create 8 more jobs in other sectors.

Beyond the construction, things get more than a little fuzzy. There is some research that shows that spending on networks will create new applications — be it “telemedicine” or e-commerce — that will spur more employment. Over the next four years, Mr. Katz allocates 378,000 jobs to these sources.

But he also has his doubts. It’s not at all clear that the people who are going to be wired by the program are going to be as quick to exploit the full potential of broadband networks as the early adopters who were the subjects the earlier studies of innovation and job growth.

Then there is the John Henry Effect (my term refering to the railroad-building legend who raced against a steam hammer). Technology that helps fewer people get more work done may be good for the economy in the long run, but it makes extra workers redundant. Mr. Katz says bringing broadband to rural areas will eliminate 266,000 jobs.

The biggest question mark, in Mr. Katz’s analysis, is how zippy Internet lines connect the farmers and their families into the global economy where jobs are increasingly outsourced to wherever they can be performed cheapest. Some people may benefit by working for companies like Jet Blue, that hire people to work answering the telephone in their homes. On the other hand, when the general store has broadband, it can send its tax returns to India rather than hiring the corner C.P.A. Mr. Katz published several scenarios that range from a loss of 110,000 jobs to the creation of 164,000 jobs.

So what does this all mean? Mr. Katz adds all these factors up and says that the stimulus bill might lead to 273,000 jobs created in the rural economy (separate from the construction impact). Then again it might well reduce employment by 1,000 jobs. Trying to be safe, he says the most likely scenario lies in between, at creating 136,000 jobs.

Even Mr.Katz’s wide range of assumptions was challenged by other speakers. Robert D. Atkinson, the president of the Information Technology & Innovation Foundation, said the study undercounted the number of jobs created because the job losses from increased productivity take years to occur.

Dave Burstein, the editor of DSL Prime, a newsletter on the business of broadband, argued that broadband, especially the high speed sort, is still spreading rapidly in the country and there is little evidence that the couple of million extra homes that might be wired up by the program will change the structure of the economy.

“Most of the network effects are a crock,” Mr. Burstein said.

Despite the many numbers he published, Mr. Katz emphasized that the government should spend in job training and economic development programs that will encourage people in the areas being wired to take advantage of the new connectivity.

Skepticism arises over rural broadband stimulus

Original Article - International Herald Tribune

WASHINGTON: With the first concerted federal program to subsidize high-speed Internet services in rural areas, the new economic stimulus package will create some jobs and could get hundreds of thousands of households online.

Yet there's some question whether the economy would be more energized by spending that money on other things.

Because Internet access is already widespread and still being expanded even in a shrinking economy, injecting more money for broadband could simply equate to giving more coffee to someone who's already downed three cups.

"From the rural Vermont that we see, broadband is happening, happening fast," said Michel Guite, president of Vermont Telephone Co., which is based in Springfield.

The company, which serves 21,000 lines, is able to borrow from commercial lenders when it needs to invest in expanding Internet services, Guite said Thursday at a conference organized by the Columbia Institute for Tele-Information.

Although he wouldn't decline cheaper loans from the government, Guite said Congress could help his company better by cutting red tape, particularly when it comes to freeing up spectrum for wireless services.

The stimulus bill provides $7.2 billion for grants, loans and loan guarantees, primarily for areas that lack broadband or are "underserved," though the term is not defined. Some of that money is set aside to expand Internet access at public centers like community colleges and public libraries.

One reason the money won't likely have much impact is its small size: less than 1 percent of the overall stimulus package, and substantially less per citizen than some countries, like Ireland and Sweden, have spent on improving their networks.

The Obama administration is looking at creating a more comprehensive plan to get the whole country covered by broadband, technology adviser Alec Ross told The Washington Post this week, but it's not yet clear if that would mean more subsidies.

A possible point of comparison is phone service for rural areas, which has long been subsidized through a program that has critics, too. A study by Robert Crandall of the Brookings Institution said that the program produces customer savings of about $2 per month for $20 in monthly subsidies. But he conceded that when phone service was being built out, subsidies may have helped.

Larry Sarjeant, vice president of legislative affairs at Qwest Communications International Inc., said the Denver-based phone company could use $3 billion to expand Internet access to 2 million households and small businesses in 14 Western states, many of them thinly populated.

Because Qwest is unlikely to get that large a share of the funds, and the number of households that sign up for service will be smaller still, the net effect would be at most a few hundred thousand new Internet subscribers. Qwest added 236,000 broadband subscribers on its own last year.

In 2007 and 2008, the Pew Internet and American Life Project asked households that lacked broadband why they haven't signed up. Lack of availability was ranked fourth, given by 14 percent. Most answered that they didn't need the Internet, that it was too expensive or too hard to use. Many people who don't use the Internet simply don't have computers.

About 95 percent of households can already get broadband, according to the National Cable & Telecommunications Association. But the industry hasn't been very forthcoming in saying exactly where it's available, and that's part of what the stimulus package wants to address — it has allocated $350 million to mapping U.S. broadband access.

There are signs that the money will do at least some good to rural areas.

A study of 3,000 people in Michigan, Texas and Kentucky found those in areas that received broadband Internet grants from the federal Rural Utilities Service quickly signed up for service, matching the penetration rates in cities. That happened where network investment was coupled with community programs aimed at convincing people about the benefits of Internet access.

Home broadband users were more likely to start businesses or take classes online, and less likely to move away, the researchers at Michigan State University found.

Those positive effects are hard to value.

Raul Katz, a Columbia Business School professor, estimates that the broadband plan will create 128,000 jobs over four years, because it will put installers and equipment makers to work, and those people will then spend the money they make. He's much less certain how many jobs the Internet access itself will create. It could be as many as 273,000 or closer to zero.

Spending the money on traditional infrastructure projects would create slightly more direct jobs: 152,000, according to Katz. That's because more of the money would stay in the United States, as most telecom equipment is assembled in Asia.

Robert Atkinson, president of Information Technology and Innovation Foundation, a nonpartisan think tank, believes it's unfair to hold broadband part of the stimulus plan to a higher standard than other investments.

"We know for sure that it will create jobs," he said. Everyone is going to have Internet access at some point, and the stimulus is "an amazing opportunity" to get five or 10 years ahead on that, he added.

So who benefits on the company side? Qwest chief executive Ed Mueller told investors and analysts last week that there would be "some upside" for the company in the stimulus, but that $7 billion would be spread pretty thin over the country.

Blair Levin, managing director and analyst at brokerage Stifel Nicolaus, believes smaller phone companies will benefit more than larger, but the money won't make a major difference.

"I don't think it will affect the competitive dynamic much," he said.

How Will the $7.2 Billion Allotted for Broadband Stimulus Be Spent?

Original Artical - PC World
Though a number of details are vague, many people in tech and telecom circles hope that the $7.2 billion allotment for broadband in the newly enacted federal economic stimulus package marks the beginning of a nationwide broadband strategy.

In the American Recovery and Reinvestment Act of 2009, recently enacted by Congress, many details regarding the allocation of funds for high-tech projects remain blurry. Nevertheless, the nation's tech community appears to be encouraged by the $7.2 billion provision for broadband in the near $789 billion economic stimulus package signed into law by President Barack Obama earlier this week. Many observers believe that the allocation is a clear first step toward establishing a nationwide broadband strategy.

Officially known as "Title VI--Broadband Technology Opportunities Program," the $7.2 billion in broadband stimulus money accounts for less than 1 percent (and only five pages) of the entire package. Its purpose is to spur broadband growth in underserved areas of the country.
What the Law Says

The bureaucracy to allocate the money has not been set up yet, and no one can be absolutely sure exactly how the broadband program will work. Still some definite elements have emerged.

First, two entities will issue grants under Title VI: the National Telecommunications & Information Administration (NTIA), and the United States Department of Agriculture (USDA) Rural Utilities Service. Tech companies, telecommunications service providers, and other ISPs large and small will compete for the grant money through a bidding process managed by the two organizations.

But confusion exists even on this point. "There's no clear way to know which government entity they should apply to," says Derek Turner, research director of Free Press, a Washington media-reform think tank.
Urban vs. Rural Broadband

The debate has begun in earnest over how much of the money should go to developing and extending rural broadband service and how much to improving quality and choice in existing urban broadband service. The division of the $7.2 billion between the two agencies provides some clue: The NTIA will be responsible for about $4.7 billion of the money, while USDA will dispense about $2.5 billion of it.

Language in the new law explicitly mentions expanding broadband to rural areas: "The purposes of the program are to (1) provide access to broadband service to consumers residing in underserved areas of the United States; (2) provide improved access to broadband service to consumers residing in underserved areas of the United States."

The law does not define any of those terms, however, nor does it identify the mechanism for issuing funds. Rather, it simply states that "the grant program [will be created] as expeditiously as practicable" and that "if approved, provide the greatest broadband speed possible to the greatest population of users in the area."

The USDA has been operating a Rural Utilities Service since 2002 to help small towns obtain broadband access; but the program, operating with a much smaller budget than the one it will administer under the stimulus act, has achieved only limited success.

We also know something about the timing of the allocations. The new bill states that "all awards are [to be] made before the end of fiscal year 2010."
Many Unknowns in Allocation Plan

While the Obama Administration would like to dole out this money as quickly as possible, many industry experts say that several months--and perhaps a year or more--will pass before any tangible services are up and running. Furthermore, many of the program's details have yet to be determined.

According to Bart Forbes, spokesperson for the National Telecommunications & Information Administration (NTIA), the White House's technology policy arm, and one of main distributors of the new infusion of broadband money, no bureaucratic process is in place yet to move the funds to their needed destinations. "There's no procedure; there's no staff; there's no program," Forbes says. "The key players have not been put into place."

Forbes adds that the NTIA has no permanent head at the moment--and hasn't had one since November 2007. Moreover, the Department of Commerce, of which the NTIA is a component agency, has no secretary either.

Despite these ambiguities, many industry analysts seem hopeful about the broadband initiative's prospects for success. "There's lots of potential for waste, fraud, and abuse [in the new law], but our country is in trouble right now," Turner says. "I'm cautiously optimistic."

How Will It Work?

Once the NTIA and the USDA create a system for distributing stimulus grants, they will work with the various states to outline the states' needs. The resulting proposals could come in the form of wired or wireless projects--the language of the law doesn't specify any particular speed or technology.

Meanwhile, tech companies, nonprofits, and ISPs will submit grant proposals and the Washington, D.C., entities will broker the final arrangements for funding approved proposals.

Each grant must adhere to principles of openness, including generally recognized provisions of Net neutrality, which require an "open access basis."

To counter potential fraud and waste, the law also mandates a "fully searchable database, accessible on the Internet at no cost to the public, that contains at least a list of each entity that has applied for a grant under this section, a description of each application, the status of each such application, the name of each entity receiving funds made available pursuant to this section, the purpose for which such entity is receiving such funds, each quarterly report submitted by the entity pursuant to this section, and such other information sufficient to allow the public to understand and monitor grants awarded under the program."
Will It Ceate Jobs?

Industry watchers say that the new law is crucial if some 20 million Americans are to obtain the broadband Internet access they need.

Craig Settles, president of and a longtime telecom industry observer, notes that public discussion of the broadband provision and of the larger stimulus package tends to focus on their similarity to New Deal-era public spending on infrastructure projects; but he says that the parallel is inexact.

"Broadband is as vital as roads and highways, but it isn't as much in the building of the infrastructure as in the job creation that comes out of the more physical, like dams and roads and so forth--those old-school infrastructure projects generate a lot of work," Settles says. "Where you're going to have the greatest impact [with the new projects] is after the network is done. It will draw new businesses to the communities; it will enable the businesses that are there to expand their markets."
What's Next?

In coming weeks, the person appointed as Secretary of Commerce by President Obama will appoint an assistant secretary--and that person will bear primary responsibility for overseeing execution of the provisions of Title VI.

"Over the next 60 days, the Department of Commerce and Department of Agriculture are going to write the [Request for Proposal] that puts the teeth into this bill, and the stipulations that the money gets appropriated to where it's needed and that it's open so it's not just the incumbents that are sucking up the money," Settles says.

Many other industry observers--including Harold Feld, a telecommunications consultant--say that the Obama Administration's attention to broadband indicates its commitment to making technology policy a high priority.

"So far, the Obama people who are going to be running this have shown that they have a drive and an appreciation for what broadband can do to transform people's lives," Feld says. "[Obama] has made a relatively minor part of the stimulus bill something that he talks about in every one of his speeches."

Thursday, February 19, 2009

Should the Data in Broadband Maps Be Transparent and Public?

Original Article -

WASHINGTON, February 18, 2009 - Art Brodsky, communications director at Public Knowledge, has just posted a new piece about Connected Nation. In it, he writes:

The new stimulus package just signed by President Obama has $350 million in it for broadband mapping, yet even before the bill was signed, the danger warnings for this program are glaringly obvious: Who will control the information on broadband deployment? If the program is done correctly, then the program may bring some benefits to the effort to include all Americans in the digital economy. If not, much of the money will be wasted.

Increasingly, it is beginning to look as if the program will be done at the mercy of the big telecommunications companies, who will seek to submit the information they want to submit, on the terms and conditions on which they want to submit it.

State governments, working months before the stimulus package was conceived, are ramping up their own programs to map deployment of broadband, and are finding they are already increasingly running into conflicts over the type of data they will receive. Some states want comprehensive, granular data. However, they are finding that the telecommunications industry, often represented by Connected Nation (CN), doesn’t want to give it to them. The result is a clash of policy objectives and politics that’s taking place across the country, in states ranging from North Carolina to Alabama, Colorado and Minnesota. Connected Nation’s board of directors is dominated by representatives of large telecom carriers, as CN positions itself as the best choice for states and the Federal government to spend millions of stimulus dollars on broadband mapping.

For more than a year, has been building an alternative to the proprietary-information model of Connected Nation.

I founded in January 2008 because I believe that data about local broadband speeds, prices, availability, reliability and competition should be publicly available. For more than a year, we have been collecting information from everyday citizens, through a process of “crowdsourcing” about their individual broadband connections. Individuals visiting are invited to Take the Broadband Census by answering a simple seven-question survey about their location, who provides them with broadband, their promised speed, and their level of satisfaction.

After Taking the Broadband Census, individuals may test their speed. We use the open source Network Diagnostic Tool of Internet2 to test their upload and download speeds, and the results are then publicly displayed and available for all, under a Creative Commons Attribution Noncommercial License.

Our biggest challenge to take has been to get the word out to more and more people, about the existence of, and about the need for more people to get involved in broadband mapping.

Last week, he had a breakthrough in receiving coverage from The New York Times, and in a guest Op-Ed that I wrote for ArsTechnica.

We have also begun to roll out our Broadband Wiki, which is designed to aggregate data about the state of broadband across the nation — by state, by county, by city and by ZIP code.

I.B.M. Delivers Rural Broadband Over Power Lines

Original Article - New York Times

With $7 billion of government money on the line, it’s no surprise that all kinds of companies are claiming they can wire the most isolated ranchers and cave dwellers with broadband Internet service.

On Thursday, I.B.M. piped up to say that it is working with rural electric cooperatives to offer high-speed Internet service, delivered over electric power lines.

Technology to send broadband over power lines has been around for several years, but it typically hasn’t been able to offer enough capacity at a low enough price to beat service from cable and phone companies.

But with government subsidies, the approach is starting to be deployed in areas that don’t have access to other forms of broadband.

IBM Global Services is actually a contractor working for International Broadband Electric Communications, a Huntsville, Ala., company that has developed both the technology and service model to make the system work, at least in rural areas without other broadband offerings. The companies began deploying Internet service last year with one rural cooperative in Alabama , and this week announced an expansion to include five more cooperatives in Alabama, Indiana, Michigan and Virginia.

There appears to be pent-up demand in these areas. One Michigan cooperative signed up 5,000 customers in the first two weeks, said Raymond Blair, the director of advanced networks for I.B.M.

These deployments have been subsidized by low-interest loans from the Rural Development Program of the Department of Agriculture, which is going to get a big chunk of new money for loans and grants from the stimulus bill that was just signed.

To deploy a broadband system, a power company needs to run an Internet connection over fiber to each electrical substation. Then it can simply install one amplifier per mile of power line. Another device sends the signal the final stretch to subscribers’ homes. To use the service, consumers can plug the modem into any outlet. With the amplifiers, the signal can be sent 25 miles from a substation, far longer than DSL service over phone wires.

Mr. Blair said this technology has been cost-effective in areas that have five to fifteen people living near each mile of line. The government grants might even encourage power companies to install it in even more sparsely populated areas.

Wireless service, of course, is another option for rural areas, but Mr. Blair said that delivery over power lines could be especially good for hilly terrain that blocks wireless signals.

The service, as offered by I.B.E.C. is certainly not something you’d want if you can get broadband another way. The company charges $29.95 a month for service at 256 kilobits per second and $49.95 for 1 megabit per second. Those are far slower speeds that cable and phone companies offer at those prices.

“The Internet at 256 kilobits may not sound like a lot, but that’s literally 10 times what people are getting today,” Mr. Blair said. “If you remember what it was like to be on dial-up, it’s totally inadequate for the nature of the Internet in this world.”

MSU study finds widening range of broadband benefits rural areas

EAST LANSING, Mich. – The stimulus package signed into law this week by President Obama calls for a $7 billion upgrade of broadband services to the nation’s rural areas, something that, according to a Michigan State University professor, will spur education and economic opportunities in those areas.

Robert LaRose is a professor of telecommunication, information studies and media. He also is co-author of a study looking at high-speed Internet use in rural areas. Courtesy photo.
A recently released study by Robert LaRose, professor of telecommunications, information studies and media, and two colleagues found that when offered high-speed Internet, those living in rural communities tended to take advantage.

According to the research, “high-speed access through public schools and libraries increased dramatically,” LaRose said. “Home broadband users were more likely than others to plan to take continuing education courses or start new businesses online.”

“As America attempts to dig itself out of an economic slump and retool its work force, broadband Internet connections have an important role to play since access to online courses is a leading reason to have high-speed Internet access,” said Sharon Strover, a University of Texas researcher who collaborated on the project.

The research project surveyed more than 3,000 people living in rural areas of Michigan, Texas and Kentucky. The Michigan site was Huron County, where high-speed Internet access in the home has more than doubled during the years of the study.

The study traced the adoption of high-speed Internet connections between 2005 and 2008 in the four communities that received broadband Internet grants from the federal Rural Utilities Service.

“What we found,” LaRose said, “was that the adoption of broadband Internet connections increased in three of the four communities, overcoming the unfavorable demography of rural communities that critics of broadband development claim explains the urban-rural broadband gap.”

However, the digital divide closed and rural broadband penetration matched that of urban residents only where the infrastructure grants were coupled with community-based efforts to promote the effective use of broadband by rural residents.

“Just providing broadband pipes isn’t enough,” LaRose said. “More rural residents need to learn about the benefits of high-speed service.”

Other study findings included:

• In Kentucky, the “Connect Kentucky” program closed digital divides between young and old and better-educated and less-educated residents.

• Social uses of the Internet increased, leading to higher levels of community satisfaction and attachment, and, ultimately, lower intentions to relocate away from rural communities.

Participating in the project were the University of Louisville and the University of Texas, Austin. Funding for the project came from the U.S. Department of Agriculture.

The Full Report

Airspan Well Positioned to Extend Market Leadership in U.S. Rural Broadband Networks

Original Article - CNN Money

Complete WiMAX FCC and RUS Certified Solutions Available Today

Airspan Networks Inc. (NASDAQ: AIRN), a leading provider of broadband wireless access networks, publicized today the availability of the industry's most complete FCC and Rural Utilities Service (RUS) certified lineup of fixed and mobile WiMAX Base Stations and Customer Premises Equipment (CPE) for the U.S. rural market. This announcement follows the just-signed American Recovery and Reinvestment Act that has placed significant emphasis on rural broadband. RUS approval is obtained from the U.S. Department of Agriculture, affirming Rural Development acceptance and "Buy American" status of equipment. Airspan is among a select few WiMAX equipment manufacturers with this coveted "Buy America" status.

"Airspan has been recognized by leading WiMAX industry analysts as the market leader in rural America," said Declan Byrne, Airspan's Chief Marketing Officer. "Following the recent legislation, many of our existing customers are positioning our WiMAX equipment to the grant and loan-making authorities of the Departments of Commerce and Agriculture. In addition, we are working to bring together an industry-leading consortium of operators, systems integrators and grant-writing and loan-application partners to assist rural operators in attaining funds from the stimulus legislation, and to deploy broadband networks in a targeted and timely manner."

Airspan has been serving rural America for several years already, with broadband wireless equipment deployed in 43 states. Airspan is currently providing equipment to the largest 3.65 GHz rural network in the country being deployed by FairPoint Communications in New England. Airspan has RUS approved and FCC certified products ready to deploy to help rural residents and businesses get connected. Supporting bandwidth-intensive services such as high-speed Internet access, Internet telephony (VoIP) and video streaming, Airspan's WiMAX solutions allow for an easy, quick and affordable deployment of a broadband network.

"Wireless broadband is an ideal technology for rural America," commented Declan Byrne. "Whereas other technologies such as cable and DSL require digging trenches and laying down cables to reach these remote areas, which can be very costly and time consuming, WiMAX base stations can be easily set up to service a rural and dispersed subscriber base with immediate connectivity. We are aligned with the stimulus bill's broadband intentions of reaching rural and underserved Americans quickly with quality connectivity."

"Broadband for the rural market will be a key focus in the next 12-18 months, and WiMAX in 3.65 GHz will be a leading technology choice due to the recent deregulation of the frequency and the economic characteristics of WiMAX," said Emmy Johnson, Founder & Principal Analyst of Sky Light Research. "Equipment vendors that have successfully demonstrated their ability to provide a strong wireless product offering will benefit the most. Sky Light's quarterly market share research, in conjunction with Synergy Research Group, shows that the 3.65 GHz WiMAX market demonstrated triple digit growth in the first nine months of 2008, with Airspan leading the market at more than 30 percent share."

Earlier this week 650 mainly rural television broadcasters decided to move ahead with the transition from analog signals to digital signals despite a government approved delay. "We are encouraged by this decision, made by approximately one third of the total 700 MHz broadcasters, which will allow our current customers who hold this valuable spectrum to quickly deploy our WiMAX equipment in this band," continued Declan Byrne.

J.J. Stutler, CEO of Stutler Technologies, a Kansas-based wireless integrator, added, "Airspan has been a valuable partner for Stutler in the last few years and we have made great progress in reaching rural America. The stimulus package reserves $7.2 Billion for rural broadband, all of which must be allocated by September 2010. We believe WiMAX is one of the only technologies that can reasonably and cost-effectively reach the dispersed and low-density population areas targeted by this bill. We are looking forward to assisting current and future customers with this growth."

Airspan joined the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO) recently. OPASTCO is a group of hundreds of independent carriers providing voice and data services in rural areas that are often expensive to serve due to difficult terrain and low population density. These innovative service providers use a variety of technologies, including WiMAX, to extend broadband to customers in hard to reach communities.

Airspan successfully passed FCC compliance tests for its 1.4 GHz solution earlier this week. "This continues to underscore Airspan's unique and complete offering of WiMAX solutions. Airspan now has solutions for 700 MHz, 1.4-1.5, 3.65, 4.9, 5.4, and 5.8 GHz frequency bands, and is the only WiMAX vendor covering all of these bands," added Byrne. "We have welcomed the tremendous customer response for our solutions and urge interested local exchange carriers to contact us via our North American sales offices. The legislation's intent to rapidly distribute broadband assistance is evident and Airspan is ideally positioned to bring operators the necessary spectrum, certified equipment, deployment partners and grant-writing expertise in a timely and successful manner."

Operators seeking to deploy wireless broadband in rural United States should contact Airspan at 561.893.8687 or email For more information on Airspan's rural broadband WiMAX solution, visit

Energy secretary promises to begin spending from stimulus package within

Original Story - AP in Baltimore Sun

WASHINGTON (AP) — Energy Secretary Steven Chu said Wednesday he's ready to push out some of the billions of dollars from the economic recovery plan within a couple of months, with money for projects to build and improve power lines and help for low-income families to cut energy use.

"We're really looking at months" for some of the money to begin flowing, said Chu as he briefly answered reporters' questions after an appearance before a meeting of state utility regulators. He promised approval of some loan guarantees and other action by the end of April or early May.

Later during a conference call with reporters, Chu said the department was looking to pump money into electricity transmission projects that already have gone through lengthy environmental reviews to get work started quickly.

"There are many places where these projects are ready," said Chu.

The Energy Department will manage $39 billion in grants, tax breaks and loan guarantees under the stimulus package, much of it to boost renewable energy and conservation programs.

Chu said he will speed up processing energy project loan guarantees that have languished at the Energy Department for nearly three years — much of it intended for support to the nuclear industry — and quickly begin work on $6 billion in new loan guarantees aimed at helping fledgling renewable energy industries.

Chu, a Nobel Prize-winning physicist, was greeted warmly by state regulators and others attending the winter meeting of the National Association of Regulatory Utility Commissioners. He spent most of his remarks discussing the need to build more power transmission lines to move energy from isolated wind farms to urban centers and the need for a "smart" grid to improve transmission efficiency.

During his speech, Chu criticized the elaborate and time-consuming application process for the loan guarantees, saying in some cases the applications added up to more than 1,000 pages. He suggested a 50-page application would do the job.

Chu cited a Bonneville Power Administration transmission line project in the Pacific Northwest as one that is ready to go and producing jobs once stimulus money is provided. The project, originally planned to take electricity from a now canceled coal-burning power plants, already has gone through environmental reviews, so work could begin quickly, he said.

The Energy Department also plans to move quickly to distribute money under a government program to help low-income families improve the energy efficiency of their homes. The economic stimulus package provides $11 billion to the so-called "weatherization" program.

On the need to expand and modernize the transmission grid, Chu demonstrated his "hands-on" involvement in such issues as "smart grid" development, and the importance of the grid to making wind-produced electricity a larger share of the nation's power supply.

The good news is that the United States has vast areas where wind is plentiful, he said, but "the bad news is renewable energy sources are in places that don't have many people" requiring construction of new transmission lines.

Chu, former director of the Lawrence Berkeley National Lab, also made clear his focus will be on such issues as science and renewable energy and not international oil market issues.

Asked by a reporter what he plans to do to try to keep the OPEC oil producers from dramatically cutting production at an upcoming meeting, Chu replied: "That's not in my domain."

Later when pressed about the OPEC comment, Chu said his response may have reflected some "naivete" but he reiterated that the Energy Department's primary role is "to focus on what we can do domestically" on energy matters including the promotion of oil price stability.

Global oil prices have fallen dramatically to around $35 a barrel as the economy's woes force down demand. The OPEC cartel members have tried to counter the price slide by cutting supplies, and the group's leaders have said they may slash output again at a meeting next month.

Infinera DTN Wins RUS Listing for Deployment Under U.S. Government Rural Telecommunications Program

Infinera (NASDAQ: INFN) DTN Digital Optical Networking system has been accepted by the U.S. Department of Agriculture's Rural Development Program as acceptable for deployment by telecom companies using USDA Rural Utilities Service (RUS) funding to build networks.

The USDA Rural Development's mission is to increase economic opportunity and improve the quality of life for rural residents. Under that umbrella, the Rural Development Telecommunications program provides loans and grants to support the extension of broadband networks into rural areas and to support distance learning and telemedicine initiatives. Last month, President Obama's new Agriculture Secretary, Tom Vilsack, announced that utilities in 13 states will receive $18.1 million in loans and grants under the Rural Development program.

Based on Infinera's breakthrough large-scale photonic integrated circuits, the Infinera DTN brings the speed and flexibility of the digital paradigm to optical networks. The scalability, flexibility, and ease of operation of Infinera networks make them an excellent solution for rural communities seeking to deliver broadband access and advanced services to homes, businesses, schools, colleges, or hospitals.

"Our customers have found that once you provide broadband access to consumers, businesses, or local agencies that didn't have it before, bandwidth demands can escalate at rapid rates," said Infinera Chief Marketing and Strategy Officer Dave Welch. "The scalability and simplicity of Infinera's Digital Optical Networks make it a great fit for rural communities."

The Infinera DTN is a Digital ROADM for long-haul and metro core networks, combining high-capacity DWDM transport, integrated digital bandwidth management, and GMPLS-powered service intelligence in a single platform.

About Infinera

Infinera provides Digital Optical Networking systems to telecommunications carriers worldwide. Infinera's systems are unique in their use of a breakthrough semiconductor technology: the photonic integrated circuit (PIC). Infinera's systems and PIC technology are designed to provide customers with simpler and more flexible engineering and operations, faster time-to-service, and the ability to rapidly deliver differentiated services without reengineering their optical infrastructure. For more information, please visit

IBM flies BPL flag in rural markets

Could broadband over power lines be due for a comeback? As broadband stimulus funds are directed toward building out rural market coverage, BPL, a technology once championed by the Federal Communications Commission but ignored by U.S. service providers, could enter the conversation once again.

Info tech giant IBM is doing its part, working with wholesale network operator International Broadband Electric Communications to build out BPL coverage in Virginia, Michigan, Alabama and Indiana. The network could be used by electrical cooperatives to provide rural broadband access and move their own operations to smart grid technology.

IBM, according to a story at Network World, sees a potential market opportunity to reach 200,000 subscribers, which is not much in the bigger broadband picture, but could make a big impact in many rural communities. Also, at the moment, there are only a few thousand or fewer BPL customers in the U.S., so perhaps the goal is more ambitious than it sounds.

BPL, as well as the HomePlug Power Alliance standard, have made power connectivity a viable broadband alternative in many international markets even while it has remained a non-factor in the U.S. Current Communications, which had one of the largest-profile BPL deployments in the U.S. in Dallas eventually sold its network to a utility focused only on its own smart grid needs and not on consumer broadband. That was less than a year ago. Will IBM's backing and the dangling of rural broadband stimulus funds be enough to revive BPL here?

Wednesday, February 18, 2009

A Smart Grid for Water

Original Article - Greentech Media

HydroPoint Data Systems says it can help corporations calculate their water requirements to cut down on inefficiency.

How do large corporations and homeowners calculate their water requirements?

They guess, according to Chris Spain, chief strategy officer and co-founder of HydroPoint Data Systems. Most commercial buildings and homeowners manage their sprinklers on simple timers. To figure out when and for how long to water certain patches of lawn or strands of trees, they just sort of shrug their shoulders and pick a watering schedule that sounds good.

HydroPoint is hoping to change that and, in the process, help jumpstart a demand response/smart grid market in a similar way that companies like EnerNoc, Comverge and Silver Spring Networks helped turn smart grid from an obscure outpost in greentech into a growing industry. Others in the industry include PureSense and Accuwater. Silver Spring and other smart meter companies will likely move into the space as well.

If anything, there's enough waste and inefficiency out there to get potential customers interested in reducing water consumption. Spain is a treasure trove of eye-popping water stats. The Environmental Protection Agency has estimated that approximately 71 percent of the runoff from commercial and residential landscaping could be eliminated through better landscape irrigation planning. Some communities such as Newport Beach have imposed restrictions on landscaping to reduce selenium from leeching from the soil into the bay.

Plants hate overwatering too. "Eighty percent of all landscape assets are lost to overwatering. Plants get deeper root structures if you let them deplete," Spain said. "Trees topple over next to lawns because of overwatering."

Landscaping currently exacerbates droughts and shortages. Fifty percent of urban water use goes to landscaping. At the same time, thirty-six states will face water scarcity issues in the next few years. Water bills, meanwhile, continue to climb. In the past five years, water costs have risen 29.7 percent nationwide. Water costs alone rose 11 percent to 14 percent in Los Angeles last year alone, he said.

There's even an energy conservation play. Roughly 19 percent of the energy in California is consumed in processing and delivering water. Therefore, if you can reduce water consumption, you can also reduce greenhouse gases. An Obama-friendly employment angle? Yes. 50,000 landscaping companies employ 10.5 million people. It was part of the testimony Spain gave to Congress earlier this month.

"Those jobs are at risk if there are not landscapes," he said. "there are clean and green technologies that stand on their merits regardless of the environmental benefits."

HydroPoint's system essentially replaces traditional timers with its WeatherTrak, a controller that regulates watering through environmental conditions. Customers fill out a questionnaire about their grounds – slope, sprinkler placement, sun exposure, type of landscaping, etc. HydroPoint then devises a watering strategy and places one or more WeatherTrak controllers on the grounds. HydroPoint gathers weather data from satellites and automatically feeds it to the controllers, which adjust watering patterns to suit evaporation rates and the weather.

The WeatherTrak thus acts almost like a smart meter, but instead of curbing demand up or down with impending brown-outs or escalating power prices, it changes watering pattern to suit the conditions in the sky and the extrapolated evaporation rate.

The cost of the hardware and services varies by site, but payoff comes in around 20 to 36 months, he said. Irrigation efficiency systems can likely become widespread without ongoing subsidies. Temporary tax cuts and rebates might be enough to get it moving, he said.

In 2009, customers using HydroPoint's system will save 11.3 billion gallons nationwide and 45 million kilowatt hours of energy. Large users include Wal-Mart and Kohl's.

The company is not pursuing agriculture deals. Only around 30 percent of the crops in the U.S. are actually artificially irrigated, said Spain, so the market isn't as large as one might think. HydroPoint also does not use soil sensors, which are used by some competitors, to gauge moisture. A site analysis combined with weather adjustments can achieve about a 95 percent efficiency compared to a sensor system. It isn't economically worth it to get that extra 5 percent by fiddling with extra hardware in the field.

The economic crisis and opportunities in water have begun to attract more VCs. Several desalination and purification companies like Miox, Energy Recovery, Oasys and HaloSource have nabbed VC funds (see Forward Osmosis: Can a Startup Reverse Desalination?). (In general, water companies like HydroPoint and Miox attract more interest from investors because their technologies are purchased mostly by the private sector, not slow-moving, cash-strapped municipal water agencies.) But even with the current crisis, it's tough to keep people's attention.

"There a history of human denial," he said. "Water has always been the ugly duckling of resources. People leave half drunk glasses of water around their house. But how many leave half drunk glasses of soda?"

Broadband Over Powerline Brings Smart Grid to Rural Areas

Original Article - Greentech Media

IBM and the International Broadband Electric Communications are running trials of smart grid services using broadband over powerline communications. The two companies hope billions in stimulus money could boost the use of transmission lines for smart grid communication in rural areas.

IBM and broadband-over-powerline company International Broadband Electric Communications have brought broadband service to 20,000 of the 340,000 rural American homes they hope to have wired to the Internet by 2010 – and smart grid trials are part of the project.

Broadband over powerline, or power line networking, is a means of bringing Internet connections to homes over existing electricity transmission and distribution lines. While more popular in Europe, it has played a minor role in U.S. utilities' push to bring smart meters and other "smart grid" functions to their customers so far (see Will Smart Grid See a Push for Power-Line Networking? and Smart Meter Installations Grow Nearly Fivefold).

But Huntsville, Ala.-based IBEC is now doing smart grid trials with three of the seven rural electric cooperatives it has signed up for broadband over powerline (BPL) services.

The Washington Island (Wisconsin) Electric Cooperative now has 25 homes hooked up to smart meters through BPL in a pilot project intended to eventually include the 1,100 homes the utility serves, he said. The project also includes voltage and amperage monitoring and load management for the utility, IBEC CEO Scott Lee said.

Two other utilities – one in Alabama and one in Virginia with a collective 72,000 homes served – are hooking up older, one-way communicating meters via substations to bring their data back to the utilities, he said (see Tendril Moves to Link Up Old-School Meters).

Those aren't as big as other BPL smart grid projects, such as the 27 million homes with smart meters that Echelon Corp. hooked up for Italian utility Enel, or the 58,000-smart meter project Echelon is undertaking in Ohio.

But when it comes to the roughly 18 million rural homes and businesses that are served by America's 870 electric cooperatives, BPL may be the best way to deliver both broadband and smart grid applications, Lee said.

And that, combined with some federal incentives, has caught the attention of IBM, said Ray Blair, IBM's head of advanced networking.

Utilities in more densely populated urban areas that tried to sell broadband over powerline services in the past found their markets saturated by existing suppliers, Blair said. But many rural areas still lack high-speed Internet service, he said.

That means "rural cooperatives have a business model that works" to sell broadband to customers, he said – "and if you've got the network in place, you can read meters, you can do fault detection, you can do demand management – all the things the major utilities want to do, but have to fork out a ton of money for the network that supports it."

Of course, IBEC and IBM – which in November inked a $9.6 million agreement to work on the rural BPL project – have had the help of the federal government. IBEC has received $68.4 million in loans from the U.S. Department of Agriculture's Rural Development Program to bring BPL to 350,000 homes by 2010 with IBM's help, Lee said.

So far the two companies have contracts with seven electrical cooperatives serving about 200,000 homes. IBEC owns and operates the networks, and IBM provides its project management and BPL technical expertise, Blair said.

But he thinks that a $2.5 billion chunk of the $7.2 billion in funding to promote high-speed Internet contained in the stimulus bill signed by President Barack Obama on Tuesday could be a big boost to the business (see Obama Signs Stimulus Package).

Why? The $2.5 billion is to be dispensed by the USDA's Rural Utilities Service, which may look favorably at electricity cooperatives seeking to serve sparsely populated areas, he said.

Blair called it the "five-per-mile to 15-per-mile" market. Those are cooperatives that have between five to 15 customers per linear mile of transmission lines – too few to be served by incumbent broadband providers, but enough to make IBEC's BPL business model work.

About 200 of the 870 or so co-ops in the country have a customer base that fits that description, he said. And if part of that $2.5 billion is dispensed as grants rather than loans, electricity cooperatives may be able to make a case for serving fewer than five customers per mile of transmission line, he said.

Blair also pointed out that many of the problems that have stymied BPL efforts in the past have been solved. Certainly the technology has had a mixed track record to date. Several utilities have tried BPL deployments, and Google invested in BPL efforts earlier in the decade, but so far the technology hasn't really taken off.

According to the United Power Line Council, an industry trade group, there were about 35 BPL deployments in the United States at the end of 2007, of which 10 were commercial deployments. BPL served about 5,000 U.S. subscribers in mid-2007, according to the most recent data from the Federal Communications Commission.

Part of the slow pace of deployments had to do with the opposition of ham radio operators, who complained that older versions of BPL interfered with their frequencies.

In April 2008, in a lawsuit brought by the American Radio Relay League ham radio association, a federal court ruled that the FCC had to rewrite its BPL regulations to solve that problem. BPL companies solved that problem by "notching" the frequencies they used to avoid those that interfered with ham radio, Blair said.

Likewise, glitches that have plagued the technology in the past have been worked out, he said. He pointed to Texas utility CenterPoint, which has been operating an IBM-designed BPL network for the past two-and-a-half years, as an example.

IBM has been making a big push in smart grid of late, working with utilities to run pilot projects and research new technologies (see IBM Snags Another Smart Grid Deal and IBM, EDF to Research Smart Grid Tech).

With equipment compliant with the new FCC rules and with federal incentives in place, IBEC and IBM are hoping that BPL can start catching up, both in bringing high-speed Internet to the 45 percent of American homes that still don't have it in the push to make America's electricity grid smarter.

In terms of just providing Internet service to homes, about 14 percent of those IBEC has brought BPL to so far have signed up for it, Lee said. The company will need 20 percent "take rates" to make the effort profitable, he said.

Still, when it comes to linking smart grid efforts with BPL, the two companies could have a long road ahead to catch up to the millions of smart meters now being deployed with other communications systems.

Frontier sounds off on rural broadband

Maggie Wilderotter, Frontier Communications chairman and CEO, told state utility commissioners that quality broadband service is the key to aiding a growing rural economy. As the nation's second-largest rural phone provider, Frontier provides everything from phone to television services to 2.4 million customers.

With most rural Americans now owning or working for small businesses - not farming -- Wilderotter said those businesses "deserve better" than what many carriers have offered them. Improved broadband services enable rural consumers and businesses to compete on equal footing with urban America. Furthermore, rural customers are eager to make full use of broadband once they get a "taste" of its capabilities, and new customer usage of broadband doubles each year they have it.

Sadly, Frontier is unable to extend broadband service to 10 percent of its customers within its footprint because it's not economically feasible. The stimulus package will likely help build out to that last 10 percent.

Wilderotter also called for an overhaul of the Universal Service Fund system, one that she said is regularly abused by larger providers. Frontier's share of USF-based funding dropped to 5 percent in 2008 while other providers benefited from "loopholes" in the funding process.

Of course, all this crazy talk about the benefits of broadband and new customer usage growing 100 percent each year they have it didn't prevent Wilderotter from hinting that Frontier is still thinking about higher broadband caps above and beyond 5 GB per month for all of their service tiers along with overage charges, reports Posts within forums seem to indicate Frontier is providing only 3 Mbps of service to its 6 Mbps service customers.

Omnicity -- Bringing Broadband to the Heartland

Omnicity Corp (OTCBB: OMCY) (the "Company" or "Omnicity") is pleased to announce that, effective on February 16, 2009, the Company has now completed its previously announced (December 29, 2008) Agreement and Plan of Merger, as entered into among the Company, Omnicity Acquisition Co. and Omnicity Incorporated and pursuant to which the Company has now acquired from the shareholders of Omnicity Incorporated all of the issued and outstanding shares and warrants of Omnicity Incorporated in consideration of, among other matters, the issuance from treasury by the Company of an aggregate of 23,000,000 restricted common shares.

About Omnicity:

Omnicity, Corp. -- -- provides broadband access, including advanced services of voice video and data, in un-served and underserved small and rural markets in the Midwestern United States and is planning to be the premier consolidator of rural market broadband nationwide. Omnicity's strategy is to provide a total broadband solution and be the leading rural wireless internet service provider (WISP) in the United States.

Omnicity's value proposition is providing internet access in rural America at significantly lower cost than wire or fiber optics. In the future Omnicity will also provide other value-added services for its customers including telecommunication (VOIP) and video on demand.

Since its inception in 2003, Omnicity has grown rapidly to the largest rural ISP in the Midwest through acquisitions and organic growth. Management plans to accelerate its rapid growth through ongoing acquisitions of smaller regional service providers and continued organic growth.

Omnicity has proven its business model to be highly successful on a regional basis and is planning to grow nationally through a strategic alliance with the nation-wide Rural Electric Membership Cooperatives (REMCs) and regional governments. In addition to extending its reach geographically, Omnicity plans to expand its offering to a 'bundled' total broadband solution. The combination of these two strategies provides an opportunity for increasing subscribers and increasing revenues per subscriber for the foreseeable future. Management estimates the market for rural and small market service to be approximately 40 million homes.

Omnicity's business is highly scalable and uses industry standard equipment. This allows for efficient use of capital and low overhead. The use of a centralized billing and management system further improves the operating efficiencies of the consolidated businesses.

Omnicity has an experienced management team with extensive wireless broadband/ISP expertise as well as the expertise to consolidate large numbers of businesses through its roll-up strategy.

Material Corporate Transactions:

In conjunction with and as a consequence of the Closing of the Agreement and Plan of Merger the following material corporate transactions have also now occurred:

(a) an aggregate of 33,880,000 issued and outstanding common shares of the Company, owned by the founder Don Prest, have been returned to treasury to be cancelled effective February 12, 2009;

(b) the following changes have now occurred, effective at February 12, 2009, to the resulting Board and executive officers of the Company:

Director/Officer Position with the Company:
Richard Beltzhoover - Chairman, CEO and a director
Greg Jarman - President, COO and a director
Don Prest - CFO and a director
David Bradford - VP of Corporate Development and a director
Paul Brock - director
Robert Pearson - director

The securities of the Company represented by the Company's Closing of its Share Exchange and the completion of its Unit Private Placement will not and have not been registered under the Act or under any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements in the United States.

This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.

For additional information please visit our website -
or contact:
Janine Shockley
Email Contact

Stimulus bill includes $7.2 billion for broadband

Original Article - CNet
President Obama signed into law on Tuesday the $787 billion stimulus package, which includes $7.2 billion for broadband grant and loan programs.

Both the House of Representatives and the Senate on Friday approved a conference report that reconciled the two chambers' versions of the bill.

The bulk of the funds directed at broadband--$4.7 billion--will be distributed through a program run by the Commerce Department, while $2.5 billion will fall under the jurisdiction of the Agriculture Department, giving particular emphasis to broadband deployment in rural areas.

The final version of the bill maintains that projects funded by the Commerce Department's National Telecommunications and Information Administration must adhere to nondiscrimination and openness principles. The funds must also be distributed before September 30, 2010, to projects that can be completed within two years.

The NTIA's "Broadband Technology Opportunities Program" is intended to "award competitive grants to accelerate broadband deployment in unserved and underserved areas and to strategic institutions that are likely to create jobs or provide significant public benefits," the bill says.

No part of the bill, however, defines the terms "broadband," "unserved area," or "underserved area." The NTIA is instructed to work with the Federal Communications Commission to define these terms.

The House version of the bill had included specific broadband speed thresholds for grant recipients, but the compromise version simply instructs the NTIA to fund projects that provide the highest possible speeds to consumers.

"A specific speed threshold," the bill says, "could have the unintended result of thwarting broadband deployment in certain areas."

Rather than specify that certain portions of the NTIA funds go to rural areas, the bill says the $4.7 billion is intended to serve all parts of the country, including rural, suburban, and urban areas. The money may also go to any recipient that best serves an area's needs, including wireless providers, wireline providers, or any provider offering to construct last-mile, middle-mile, or long-haul facilities.

The trade association Wireless Communications Association International said it is particularly pleased that commercial entities are clearly eligible for direct grants from the NTIA.

"WCAI members stand ready to move forward with plans to bring wireless broadband to rural and underserved areas," said WCAI President Fred Campbell. "Having direct access to grant funding will allow them to do so in a timely manner, helping create jobs fast, enable productivity, and jump-start our economy."

At least $200 million of the NTIA funds must go to competitive grants for programs that encourage sustainable broadband adoption, while an additional $200 million in grants is set aside for expanding public computer center capacity. Another $350 million will fund the Broadband Data Improvement Act, to develop a broadband inventory map and provide for certain grants.

The legislation also requires the FCC within one year to create a "national broadband plan" to ensure that everyone in the U.S. has broadband access.

While the Senate intended to distribute only $100 million in broadband funds through the Agriculture Department's Rural Utilities Service, the final number--$2.5 billion-- is much closer to the House's plan to allocate about $2.8 billion through the RUS.

Some have expressed concern that the funds may not be allocated efficiently if distributed through two agencies. Derek Turner, research director for the public policy group Free Press, told CNET News last week that groups eligible for grants may not know whether to apply for grants through the RUS or the NTIA. Grant recipients may not receive funds from both.

"With a program this massive you need it to be overseen by a single agency," Turner said, "and the NTIA is essentially the policy adviser for the president on telecommunications."

The RUS funds focus more on rural broadband access, requiring that at least 75 percent of an area receiving funds be in a rural area without sufficient high-speed broadband access. The RUS will give priority to projects that give consumers a choice of more than one service provider.

Advocates of universal broadband access were, overall, very pleased with the legislation.

"The broadband stimulus package is a clear sign that Congress is committed to connecting our country and maintaining an open Internet," Turner said. "These funds will provide a much-needed shot in the arm to those communities still stuck on the wrong side of the digital divide."

The American Cable Association, which represents more than 900 smaller and medium-size independent cable companies, praised the legislation's emphasis on providing rural areas with broadband.

"ACA and its members understand more than anyone what it takes to provide high-speed Internet service in small markets and rural areas across the country; they have been doing it for years," ACA President and CEO Matthew Polka said in a statement. "Funding broadband programs will enable small and medium-sized cable operators, who have already invested significant private capital into their communities, to receive funds to invest in the infrastructure improvements necessary to offer more advanced broadband services."

IBM and IBEC Initiate Broadband Access to 200,000 Rural Americans

Original Article - CNN Money

IBM (NYSE: IBM) and International Broadband Electric Communications, Inc. (IBEC) -- an Internet Service Provider -- today announced they have begun to establish Broadband over Power Line (BPL) networks for nearly 200,000 rural customers served by 7 electrical cooperatives in Alabama, Indiana, Michigan and Virginia.

Funded by low-interest Rural Broadband Access Loans from the United States Department of Agriculture Rural Development Program, IBEC aims to bring broadband Internet access to rural communities via existing power line infrastructure. IBM, the first major systems integrator to enter this market, is providing overall technical expertise, project management, and training of the line crews who are installing the BPL technology.

How it works: Broadband over power line technology modifies radio signals to transmit voice and Internet data over electric utility power lines. All a consumer needs is a modem that plugs into existing electrical outlets in their home or business. With no new wires to install, setup is simple and easy. Learn more from Cullman Electric CEO Grady Smith: "Broadband Over Powerlines - Rural America's Key to Tomorrow's Broadband Services."

"In the near-term, IBM and IBEC's effort promises to bring broadband access to the scores of the nearly 45 percent of Americans that do not have it today," said Raymond Blair, Director of Advanced Networks at IBM. "In the long-term, the effort will lead to the expansion of small businesses and creation of new industries, bringing new jobs to rural Americans and driving net new economic growth."

"While DSL and Cable modem service providers are competing head-to-head in many urban areas, neither is feasible in low density, underserved areas (both rural and urban), where DSL requires significant telephone network upgrades, and cable data is not economically viable," said Scott Lee, CEO of IBEC. "The only broadband choice for many consumers in rural areas is satellite data service, which does not offer comparable data rates and is more costly than wire line services."

IBM and IBEC, with the aid of government funding, are building broadband over power line networks in cooperation with member-owned electric utility co-ops across the nation. The first seven co-ops to participate include: Cullman Electric Cooperative in Alabama; Utilities District of Western Indiana REMC, Parke Country REMC and South Central REMC in Indiana; Midwest Energy Cooperative in Michigan; and BARC Electric Cooperative and Central Virginia Electric Cooperative in Virginia. These are just seven of nearly 900 electric cooperatives in the United States providing 45% of the total electric grid and covering 75% of the land mass in the U.S.

Bob Hance, CEO of Midwest Energy Cooperative in Michigan led an effort to survey the Midwest's customers to determine if there was interest in broadband Internet services. Within a week, the cooperative had a waiting list of 4,000 customers practically pleading for service. "We were amazed by the responses to the survey -- thousands of letters from citizens of our community expressing their need for broadband in order to improve everything from childhood education to the future of their family-owned small businesses," said Hance. "We shared nearly 600 of these letters with local legislators after we realized none of the major service providers were going to answer their calls for help. Thanks to the help of those legislators, IBM and IBEC were able to access the resources needed to help our community. In less than two weeks, we've already deployed 400 live miles with broadband access, or nearly 4,000 homes."

Grady Smith, CEO of Cullman Electric Cooperative in Alabama believes BPL technology can do for rural America today what the Rural Electric Administration (REA) did for it in the 1930s. Cullman has 1,600 homes wired for BPL technology thus far, and expects to pass nearly 7,000 homes by the end of February. "Today, instead of electricity, it is broadband service that is on course to change our lives. I do not believe it is an exaggeration to say that broadband service is the single most important technological issue of this generation, and that it will have the greatest impact on society since basic electricity and telephone service."

Bruce King, CEO of BARC Electric Cooperative in Virginia is looking forward to bringing broadband access to his community of 11,000 households and small businesses in the coming months. "I cannot go to church or rotary club meetings on the weekend without someone in the community asking me when we'll have high speed Internet access. Our members are orphans in the Internet world," said King. "I'm proud to be able to tell our members that it will only take us 1 percent of the money we invested in the electric system to begin with to enable it for broadband. I am a financial guy, and that is an overwhelming reason to do it."

About IBEC

IBEC, Inc. is a full-service provider of Broadband over Power Line Internet access products, solutions and services, electric utility SmartGrid communication and integration solutions, and powerline-based security systems. Focused on meeting the broadband needs of rural and underserved America, IBEC is the leading provider of Broadband over Power Line solutions to rural electric utilities and their consumers. For more information, contact IBEC at 285 Dunlop Boulevard SW, Suite K, Huntsville, AL 35824-1103 USA, 256.492.1000, 256.456.1406 fax, or via email at On the Internet, visit IBEC at and IBEC - EmPOWERing the World's Broadband®

Concerns Raised by Broadband Element of Economic Recovery Plan

Original Article - IT Business Edge

The broadband element of the economic recovery legislation being cooked up in Congress is raising concerns among experts. It’s safe to say that it is difficult to fairly and efficiently dole out billion of dollars on the fly, especially when nobody is quite sure of what they are doing.

There is a lot of money on the table: The House dedicates $6 billion to broadband infrastructure in its measure, and the Senate bill provides $7 billion, down from the $9 billion in an earlier bill. The Senate bill stipulates that the money be administered by the National Telecommunications and Information Administration (NTIA), which is part of the U.S. Department of Commerce. The funds are split between the NTIA and the Department of Agriculture in the House version. [Editor's note: Numerous reports now say that the broadband element of the compromise bill agreed to by the House and Senate on February 11 calls for $7.2 billion to be allocated by the Department of Agriculture and the Commerce Department. If passed by the full Congress, the measure will be sent to President Obama and, if signed, become law.]

The core of the challenge seen by some broadband advocates is that the government is not accustomed to dealing with infrastructure that evolves so quickly. The dangers of doing so now are heightened because broadband issues won’t get the attention they deserve in the crisis atmosphere in which the legislation is being cobbled together.

The goal of the government isn’t primarily to build the best platforms. It’s to create jobs. “Shovel ready” projects may or may not coincide with what broadband experts think are the best approaches. That has people worried. “Are we going to be so intent on the short term that we screw up the long term?” asks Craig Settles, an analyst who specializes in municipal broadband deployments.

The final legislation, of course, will only be a rough outline of the reams of rules and regulations that will actually control how the law is interpreted. So far, the opinion among experts seems to be that a good faith effort is being made -- but that significant dangers lurk.

Femtocells, Not Asphalt

For decades, the operative analogy compared broadband to bridges, roads and other physical infrastructure. This is dangerous because procedures that are adequate (barely, in some cases) for transportation infrastructure just won’t do for systems that are more complex, have a greater number of options and become obsolete more quickly.

Conceptually equating a WiMax base station and a femtocell to a road and a bridge is a big problem, insiders feel. Geoff Daily, a member of The Rural Fiber Fund Working Group, says Congress “never really figured out what to do with broadband. It’s a very abstract concept to them. They are not able to take a pragmatic, sophisticated and nuanced approach because they don’t know what the goal is.”

The telecommunications and information technology industries have spent a couple of decades adjusting processes to new realities. For instance, the fact that there is no finalized 802.11n standard has not stopped the creation of a healthy industry segment around “draft N” products. This success was based on the recognition that 802.11 technology was moving much faster than stodgy, decades-old standards processes. Such flexible thinking doesn’t come naturally to lawmakers, however, and seems even less likely in the current chaotic atmosphere.

Michael Shear, the president of Pockets, an organization that seeks to create distributed work, telemedicine and education hubs, also points to the heavily deregulated environment of the past 20-something years. His view is that many important issues that have to be dealt with when multiple billions of dollars are on the table have in essence been off-loaded by the government.

“Since divestiture in 1984, public policy and public policy awareness and expertise have disappeared,” Shear says. “As a consequence, there is an absence of the ability to determine what’s in the public good on broadband, and how to create the best approaches to building that kind of infrastructure.”

Friday, February 13, 2009

Memo to President Obama: We Need Anywhere for America

Original Article (PDF) - Yankee Group

by Jennifer Pigg, Vice President,, 617-598-7278, Carl Howe, Director,, 617-598-7314,
and Emily Green, President and CEO,, 617-598-7289

The Bottom Line President Obama, we need an Anywhere NetworkTM policy to advance America from 19th place in world
broadband penetration and to plant the seeds of ubiquitous connectivity. But more importantly, the Any-where Network is at the heart of a broader economic recovery and can help advance progress on your health care, energy and community service agendas as well.

Dear President Obama:
Congratulations on your historic election to the presidency and
your recent inauguration. Millions of Americans were drawn to the
Capital Mall to see this historic event for themselves, and billions
of people worldwide watched the same event on television, over
the Internet and via their mobile phones.

This extraordinary ability to touch and inspire those beyond our
personal sphere is the power of what we at Yankee Group call
the “Anywhere Network.” It’s more than broadband, and wireless
technology. Rather, it is the unification—the “Interneting” if you
will—of wired and mobile broadband networks to create new
capabilities for citizens, businesses and government alike. While it’s
not a reality yet, it is a power that is within our grasp, if we only
commit to it.

In these hard economic times, we recognize that you already have
an ambitious agenda to address. However, committing America
to fostering an Anywhere Network is not a distraction from that
agenda; rather, the Anywhere Network can help us reach these
goals faster.

Connecting America to the Anywhere Network
The Organisation for Economic Co-operation and Development
(OECD) ranked the United States 19th in the world in terms of
broadband penetration per capita in 2008. When Yankee Group
adds in wireless broadband as well, we calculate that the U.S.
still only has roughly one broadband line for every two people.
Meanwhile, countries like Japan, Sweden and Italy will all achieve
one broadband line per person—a metric we call the Anywhere
tipping point—in 2009, while we forecast that the United States
will take until 2011 to reach that goal.

You’ve already challenged America to “lead the world in broadband
penetration and Internet access.” If we are to do that, then we
must not only encourage private investment and competition,
but also take public actions. We recommend that the Obama
* Recommit to building a public safety broadband network. Your agenda calls for us to “improve interoperable
communications systems” for state and local first responders.
Yet the Integrated Wireless Network nationwide radio system
for federal agents that started after 9/11 has failed because the
Departments of Homeland Security, Justice and Treasury could
not agree on goals and methodology. Meanwhile, the public
safety 700 MHz auction also never got off the ground, and no
reasonable alternative has emerged. We cannot afford to wait
for another 9/11 to occur before we act on these wireless
broadband imperatives.
* Fund the Rural Broadband Administration (RBA).
Your rural agenda states that we must “promote affordable
broadband coverage across rural America.” President Franklin
D. Roosevelt’s Rural Electrification Administration brought
electricity to countless rural communities, and there is already
an unfunded Rural Broadband Administration within that organization. Yankee Group believes that funding this effort in a way that focuses on underserved geographies will reach more households at less cost to the taxpayer than other initiatives.
It will also generate more jobs than direct tax incentives to the
local rural carriers.
Stop delaying the transition to digital TV. • Carriers that
want to build 4G networks have already paid more than $20 billion for the spectrum being used for analog TV today, and the FCC has already granted those licenses. Delaying the next generation of wireless networks to ensure that the public can
still watch “Lost” on aging TVs is a false economy that looks
backward rather than forward to our digital future. Congress has already approved one delay; don’t let this drag out any longer.
Lead the public use of “white space” spectrum. • On November 4, the Federal Communications Commission (FCC) unanimously approved the use of “white space” frequencies close to the analog TV spectrum for unlicensed use. Companies including Google, Intel and Motorola believe that this free “Wi-Fi on steroids” offers huge opportunities for new wireless innovations from consumer wireless broadband to geolocation, but they won’t invest in it without knowing a market exists for their products. The government should pioneer some initial
Encourage the use of femtocell technology.• These devices allow businesses and consumers to expand wireless broadband access within buildings without requiring carriers to get involved. These new technologies and in-building standards for 3G and 4G networks will bring Anywhere connectivity into
buildings where carrier connectivity is typically poor, which will drive network use for public hospitals, schools and government offices. Government can encourage their standardization by buying femtocells for all government buildings and requiring
carriers to accept any device that meets government standards.
Mandate fiber be built into new public housing and multitenant buildings. The United States needs fiber infrastructure if it is to keep pace with fiber-rich countries like South Korea and Japan. Although we cannot wire the nation overnight, we can require new multitenant housing, particularly
any built with public money, to have broadband connections to every floor and unit. Fiber deployment at the time of construction is marginally (10 percent to 20 percent) more expensive than deploying copper or coax and one-tenth the cost of retrofitting a unit with fiber. Such fiber-rich buildings will become attractive prospects for fiber carriers and will foster innovative new uses and home-based businesses.
Capitalizing on the Anywhere Network
The value of the Anywhere Network lies not in what it does, but what America can do with it. Yankee Group believes that using the Anywhere Network can advance many of your administration’s agenda goals by distributing better information without spending
billions of government dollars. Specifically, we recommend that your administration:
Optimize public transportation with wireless information. Your agenda challenges us to use public transportation and reduce our carbon footprint by driving less. With most consumers already carrying wireless devices, we can vastly improve the efficiency of public transportation by giving citizens better information about when trains and
buses run and how long it will take to get to destinations. San Franciscans can already predict when they’ll arrive at the airport using applications like Google Maps; cities throughout the U.S. should emulate this example. Deploying information using the Anywhere Network is cheaper than building new roads and can contribute to solving transportation problems.
Make businesses more competitive by encouraging •
remote workers
. Your agenda challenges business leaders toonce again make American workers the most productive in the world. According to the Yankee Group Anywhere Enterprise—Large: 2008 U.S. Mobile Blended Lifestyle Survey, employees rated working from home the number one thing their employers could do to make them more productive. At the same time, companies such as IBM report cost savings of $110 million a year because more than a third of its 300,000 employees work from home, and their reduced commuting reduces carbon emissions as well. Set a national goal of having 5 percent of the American workforce telecommute, and we’ll boost worker productivity, save millions of barrels of oil a day and strengthen our families
by ensuring parents are home when their children return from school.

Deliver medical diagnoses and basic health care over •the Internet. Your technology agenda plans to lower health care costs by moving to electronic health information systems. But we can do more than that. By encouraging online diagnoses and office visits, we have an opportunity to lower health care costs, increase the productivity of both health care workers and patients, improve access to care in rural areas, and curtail the spread of disease through in-person visits to hospitals and doctor’s offices. By reducing the number of visits individuals make to health care providers, without sacrificing quality of
care, we can dramatically reduce health care costs. And we don’t have to do this all by ourselves; we can take advantage of best practices developed in Scandinavia and Japan
Create a Community Service Geek Squad to help analog citizens. Your first proclamation as president called on all of us to serve one another and the common purpose of remaking this nation for our new century. Yankee Group surveys show that 40 percent of U.S. citizens aren’t very interested in technology, yet many would use it if they knew how. At the same time, countless high school and college students live and breathe technology and are eager to answer your call to service. A national Community Service Geek Squad could help seniors and other technology-challenged communities become more connected with society while providing experience to young people at the same time.

These ten steps are only the beginning of our Anywhere journey, and we’ll be writing more about comprehensive broadband plans in upcoming research. But these steps are ones that we can afford and put into action this year without creating huge new programs.

As you embark on your first days and weeks in office to bring change to America, we are eager to help you bring America to Anywhere. Let that journey begin.


Emily Green, chief executive officer
Jennifer Pigg, vice president
Carl Howe, director

Next Challenge on Stimulus: Spending All That Money

Original Article - Wall Street Journal


Minnesota's Sage Electrochromics Inc. has been ready for months to move on just the sort of project the Obama administration hopes will bolster the U.S. economy: a $65 million factory that would make energy-saving windows and generate 250 new jobs.

So what's holding it up? The Energy Department, whose fledgling loan-guarantee office has yet to approve a single project, including the proposed Sage glass factory, since the loan program launched in early 2007.

President Barack Obama plans to rely heavily on agencies like the Energy Department to approve contracts and issue loan guarantees and grants at a record clip in the $789 billion stimulus plan.

But there are signs that parts of the federal bureaucracy will need an overhaul to handle the huge workload heading their way. Such worries are apparent at the Energy Department, which will play a key role in Mr. Obama's bid to revive the economy and wean the country off oil.

The stimulus bill nearing a final vote in Congress could pump as much as $170 billion into projects such as highways, Internet broadband and public-housing repairs. Of that, about a quarter -- or some $40 billion -- could go to the Energy Department. The agency would be under the gun to swiftly hand out money to projects that would modernize the electric grid, build electric cars and make homes and buildings more energy efficient.

The new energy secretary, Steven Chu, has barely moved into his office overlooking the Smithsonian Castle. He says he'll have to transform how parts of his agency work if the president's stimulus plan is to succeed.

"We've got to do it," Mr. Chu said in an interview. "Otherwise it's just going to be a bust."

Other agencies face steep challenges, too. An obscure Commerce Department office with a $19 million budget and fewer than 20 grant officers could end up in charge of $7 billion in grants to expand Internet access in rural areas. A Congressional Budget Office report said it could take eight years for those grants to be issued because the amount of money would "far exceed" the agency's traditional budget and require the deployment of technology that is "not widely available today."

The spending demands could prove particularly taxing at the DOE. The Energy Department has had limited experience pulling off big, transformative energy projects. Most of the department's $25 billion budget goes toward maintaining the nation's nuclear stockpile, cleaning up former weapons plants, and doing basic scientific research.

"DOE is going to have to dramatically change how it does business if it hopes to push all this money out the door," says Karen Harbert, a former senior Energy Department official who now directs the U.S. Chamber of Commerce's lobbying efforts on energy issues. "They are going to need more people, more oversight and more freedom to waive regulations."
History of Delays

The department has a history of delays and of letting costs spiral. It has missed so many deadlines for setting energy-efficiency standards for appliances, for example, that Mr. Obama last week ordered the agency to get it done by August this year. The approval process for guaranteeing loans to energy projects, meanwhile, has dragged on for roughly two years and counting. And last month, the Government Accountability Office cited the agency's "inadequate management and oversight of its contractors" when it put the department on its list of agencies at "high risk" for waste, fraud, abuse and mismanagement.

Gregory Friedman, the DOE's inspector general, whose office acts as the agency's in-house watchdog, knows the department's weak spots well after holding the position for more than a decade. The House version of the stimulus bill before Congress gives Mr. Friedman's office $15 million to track how all the new money coming into the DOE will be spent.

"Forty billion dollars is a huge amount of money," says Mr. Friedman of the DOE's potential windfall. "Absorbing the money, making sure it's spent appropriately and gets into the hands of the right recipients...are going to be significant challenges."
A Four-Week Window

Mr. Chu, a Nobel Prize-winning physicist whose last job was running the Lawrence Berkeley National Laboratory in California, says one of his first priorities at the DOE is getting projects that are already in the pipeline, like the Sage glass factory, up and running. To agency employees who say such projects need months of additional consideration, "we're saying, 'Tell us what you need to do in order to get them [decided] in four weeks,'" Mr. Chu says.

Sage and more than a dozen other companies have so far labored for more than two years to win loan guarantees through a program authorized by Congress in 2005. Wary of financing projects that might default, the Bush administration took another two years to adopt regulations governing the program. Congress eventually authorized the DOE to issue $42.5 billion in loan guarantees for ventures that many lenders would otherwise consider too risky.

The program is now seen as a test of the department's ability to speed up projects that could both create jobs and help steer the country away from a reliance on oil. But the experience of some of the companies still awaiting their loan guarantees raises questions about whether the DOE will be able to radically change its ways fast enough.

Sage Electrochromics makes windows that can get darker or lighter on command, making rooms easier to cool in summer or warmer in winter. Sage first approached the Energy Department in late 2006 about securing a loan guarantee that would allow the company to build its first commercial-scale glass factory about 40 miles south of the Twin Cities in Minnesota.

In October 2007, Sage was one of 16 companies that won initial approval. The company, which is seeking a $65 million loan guarantee, is now awaiting a ruling from the DOE on whether it will have to pay a fee for the service. After that comes a due-diligence review that will require a team of lawyers, engineers and market researchers, and could cost up to $1 million, according to Sage estimates.

"I'm guessing that we will have the money by the end of the year at the earliest," says Mike Kennedy, Sage's chief financial officer. "There has to be a way to do this faster."

In Massachusetts, Beacon Power Co. has stood in line for 25 months to win approval for a $50 million loan guarantee that would let the company break ground on an electricity-storage plant about 30 miles southeast of Albany, N.Y. The plant would absorb power and feed it back onto the grid when the supply drops, a function that traditional power plants do much less efficiently.

The vetting has been so thorough, says Beacon spokesman Gene Smith, that the company to date has supplied the Energy Department with 96 documents, which together fill six thick, three-ring binders. One of the documents is a draft 87-page environmental-impact study for the proposed two-acre site. That study required Beacon to hire archaeologists to scour the site for signs of prehistoric remains. The team found a mound of debris from a century ago that was deemed of no historic value.

David Frantz, who directs the DOE's loan-guarantee program, said he couldn't comment on specific applications, but said the agency is moving to "significantly shorten the cycle time from application to loan guarantee to ensure good projects get funded quickly."

On Thursday, Andy Karsner, assistant secretary for energy efficiency and renewable energy under President George W. Bush, told a Senate panel that a combination of "bureaucratic dysfunction," "organizational intransigence," and "institutional barriers" had contributed to the agency's "painfully slow" progress on loan-guarantee applications in recent years.
An Earful About Delays

The Energy Department has missed deadlines and misjudged the costs of projects before. Shortly before Mr. Obama took office, the agency halted contract talks on more than $2 billion worth of energy-efficiency projects at federal buildings, after realizing belatedly that the projects' costs would exceed the limits the department had set for them. An Energy Department spokesman said the agency didn't "adequately keep track of the value of projects in the pipeline," but that most of the affected projects were still in their early stages and that the department is working to move them along "with as little disruption or delay as possible."

Mr. Chu has heard an earful about such delays. He says when it comes to loan guarantees, the level of documentation the agency requires from companies "may be too much." He says he's talking to officials at other agencies that he says have "a better track record" of getting financial aid to companies quickly. Some of those agencies' employees could be temporarily reassigned to the DOE to help it mete out funds.
Speeding Up the Process

His aides are also pressing the agency's lawyers and loan-guarantee managers to identify ways to speed up the process. The agency's legal department, says Mr. Chu, has been "very conservative," in waiting to vet loan-guarantee applications until after the deadline for submissions has passed, rather than "triaging" them on a "rolling" basis.

David Hill, who was the Energy Department's general counsel under President Bush, says there are reasons for the DOE to tread carefully in funding alternative-energy projects. During the 1970s, he says, the DOE made multiple loan guarantees to support the development of synthetic fuels and geothermal power, only to see many of those projects default and the projects' sponsors abandon them.

"We have to be careful to not make the same mistakes that we made before," Mr. Hill says.

Business groups like the Chamber of Commerce have called for expediting federal environmental reviews to help speed spending. Otherwise, they say, many stimulus-funded projects will be delayed for years. Environmental groups object to such proposals. "The way to ensure stimulus money is spent quickly is to fund the right initiatives, not waive solid laws," says Erin Allweis, a spokeswoman for the Natural Resources Defense Council.

The frenzy of activity is unfolding as government watchdogs are warning the Energy Department not to lose sight of its traditional duties. A report in December by the agency's inspector general, Mr. Friedman, said the department still faces a "monumental task" in cleaning up the more than 1.5 million cubic meters of solid radioactive waste and 88 million gallons of radioactive liquid waste left over from more than 50 years of nuclear defense and energy research work across the country.

Another challenge: making sure money designated for states gets funneled through quickly to the people it's meant to help. A good chunk of the DOE stimulus money, around $5 billion, will flow in the form of grants to states for programs to supply insulation for homes in low-income neighborhoods. There, too, states are scrambling to prepare to handle unprecedented sums of money. Massachusetts, which is farther along than most states in weatherizing homes, expects an injection of upwards of $161 million into a program that last year spent $14 million.

Rep. Rodney Frelinghuysen, a New Jersey Republican who sits on a House panel that controls the DOE's budget, worries that the scale of the stimulus will throw the agency off track. "You have a huge policy shift here of moving a bureaucracy that's been focused on research and development to being a manager of a massive amount of money," he says, calling it, "a prescription for abuse and waste."