Informing rural community leaders,
· Educating policy makers,
· Impacting regulatory decisions within legal constraints of its nonprofit status, and
· Facilitate relevant research and data collec= tion efforts.
The broadband portions of the American Reinvestment and Recovery Act (ARRA) are directly relevant to our mission, but ARRA impacts = our members and stakeholders in many ways. Possibly the two most important thin= gs for federal agencies and national policy-makers to understand is that America’s rural communities, even those that superficially look simil= ar, are each unique, and the distinction between sectors in our rural communiti= es is not nearly as sharp as it often is in Federal programs and national policie= s.
Every rural community is unique. Seemingly small differences can be very important.= While change often comes slowly to rural communities, a few visionary leaders can= —and do—make big things happen very quickly. At the same time, even the be= st “big ideas” championed by experts will not take root in rural communities unless they connect with the individual concerns of rural leaders.
This reality m= akes advocacy and capacity-building critically important. It is also importa= nt because, unlike traditional infrastructure, the value of broadband is highly contingent on applications: How you use broadband makes all of the differen= ce for impacts. Effective use is shaped by visionary leaders.
Most rural leaders play multiple roles. The mayor is a
small business owner, the doctor a volunteer firefighter, the teacher a far=
mer,
the sheriff a pastor. While it may make administrative sense to segregate
functions at the federal level, it is counter-productive for rural communit=
ies
where everyone has to work together. Broadband
must have broad application and use in order to be socially, as well as
economically, viable.
RTC encourages= NTIA, RUS, and other federal agencies to adopt a flexible, place-based approach that supports collaboration, rather than a function-based approach that does not build upon the interdependent relationships that are so essential to our ru= ral communities.
Preference sh= ould be given to comprehensive proposals, to projects that include the full arr= ay of purposes, rather than apportioning funding to projects that narrowly add= ress particular purposes. Comprehensive, multi-purpose projects—those that include outreach and support as well as access—are more likely to have economic impact and to be sustainable.
Successful pr= ojects are going to need a great deal of knowledge and organizational capacity. The technology is complex and ever-changing, and its value depends greatly = on how much and how well it is used. Therefore NTIA should encourage projects = that are partnerships between private firms, local public entities, higher education, and regional or state economic development agencies, particularly those that provide technical assistance small- and medium-sized enterprises, including farmers, manufacturers, service industries, etc. Such partnerships are best able to deliver the needed capabilities.
NTIA should f= ocus on shared network infrastructure and other shared facilities, on general outre= ach and support, and on short-term (12 to 24 months) operational support. R= US should focus on hardware, software, and start-up resources for function-specific “vertical applications” such as education, healthcare, public safety, smart grids, and transportation. NTIA and RUS sh= ould encourage joint applications on these bases.
The States sh= ould be charged with estimating and evaluating the economic impacts of the projects, with verifying progress and success, with providing oversight for at risk projects, and with real asset issues such easements. Economic impacts—addressed in more detail below—should be determined by leading economic indicators such as productivity and revenue growth by subscribers/users. The States should support the gathering of this data alo= ng with broadband inventory data.
As noted above, the most comprehensive projects are li= kely to be the most impactful, so the S= tates should play a consultative role to applicants to assure that proposals incl= ude all necessary components, i.e., application software, computer hardware, data storage hardware, support, training, etc., as well as broadband access. They should help assure applicants have strong partners and that applicatio= ns are linked to economic development strategy. Progress and success should be measured by key performance indicators and project milestones, and, as discussed below, States should assist with gathering and review indicator a= nd milestone data, and provide oversight for projects that repeatedly and/or significantly miss either.
The States sh= ould assure economic impact. The purpose of ARRA is reinvestment and recover= y. Differences between groups or constituencies within a State should be resol= ved on this basis: Which has the greatest potential for boosting productivity, = which will is most likely to spur business investment, and which will create the largest, most rapid, and most sustainable economic recovery. The States sho= uld play a central role in resolving these differences. The States should also = be exercise oversight to assure projects are well-executed and have worthwhile and measurable results.
Possibly the = largest issues in deploying broadband, particularly in underserved areas, relate to physical assets and access: easements, pole attachments, rights of way, etc. States should provide assistance, guidelines, and resources for addres= sing these issues.
NTIA should u=
se
co-investment, “claw-back” agreements, and support commitments,=
as
well as other substantive collaboration/cooperation agreements, as criteria=
to
determine whether other entities should be eligible for grant awards.
In order to be eligible private entities should commit= to invest 1:1, at least, with the public sector, including any local and/or st= ate matching funds, in the project. If a project’s total public investmen= t is $1,000,000, other entities—regardless of the portion of that investme= nt they are eligible to receive—should commit to invest at least $1,000,= 000. Multiple entities should be allowed to collaborate and co-invest as a single entity for these purposes.
Eligible entities should be required to make commitmen= ts to geographic availability, performance (capacity/speed, order fulfillment, reliability, etc.), and pricing. Failure to meet such commitments should require repayment of some portion of the public funds received by these entities. This is commonly referred to as a “claw-back” agreeme= nt in economic development incentives.
Eligible entities should be required to make easily ve= rifiable commitments to providing support and training to local officials, business, civic, and governmental organizations, workers, and other “end users,” as well as to eligible organizations leading or supporting NT= IA funded projects. This should be done in conjunction with and in support of initiatives to encourage sustainable demand.
NTIA might use other substantive collaboration/coopera= tion agreements, such as “free” network capacity, data storage, software, technical support, training, etc., as criteria for eligibility. N= one of these should be in lieu of the financial co-investment requirements.
Proposals sho= uld be linked to pre-existing local and/or regional economic development plans, programs, and projects. The selection criteria for BTOP should be substantiated estimates of economic impact, particularly leading indicators such as productivity and revenue increases, and co-investment. Applications—the use of the proposed system for business processes—are essential to these criteria, and the bottom-line for applications are:
1.&n= bsp; Cost control or reduction from automating processes
2.&n= bsp; Increase in revenue or support from product = or service improvements
3.&n= bsp; Creation of new income from innovative produ= cts or services, or radical process improvements
BTOP proposal= s should be required to show how they will realize one or more of these outcomes from the public investment. Private investment is not tied to such outcomes, only to the price consumers are willing to pay and/or the aggregate revenue potential of the investment. Therefore, such application-oriented projects = are unlikely to displace private investment. Indeed, they are likely to catalyze private investment, to encourage it.
The long-term= feasibility of the investment should be judged on the basis of the entities involved, t= heir commitment to the project, and their prior history, as well as reasonablene= ss of the business model. The more numerous and diverse the entities (considering the geographic scope and socioeconomic context), the greater t= heir commitment to utilize the access provided by the project for the applications/outcomes, and a prior history of market and public leadership,= the more viable and the stronger return the project is likely to have. For exam= ple, a proposed project should include commitment from businesses, civic organizations, and government agencies to deploy applications that require broadband to achieve outcomes cost control, revenue/support increase, or new income. Each entity should provide a letter of intent specifying such, and a profile that documents how they have pursued such outcomes in the past.
Equal weight = should be given for substantiated estimation in each of the categories—cost control, revenue/support increase, and new income sources—but the= se factors should be summed and considered relative to the aggregate income (p= er capita income times population) of the geographic area to be served. Prefer= ence should be given to those projects that have the largest relative impact. Th= is approach should equalize rural and urban projects, while directing funding = to those that have the greatest economic potential.
The heaviest weight should be given to projects that p= ropose broadband access in areas that currently have no such access. Given that satellite connectivity is available across most of the nation, such proposa= ls should show that capacity (symmetrical throughput) to end-users is at least double and latency at least one-quarter of that provided by satellite. Even such “baseline” projects should commit to particular applicatio= ns/outcomes.
Given the recommendation that RUS funds be refocused on function-specific hardware, software, and start-up resources, and that other Recovery Act projects focus in functional area (education, energy, healthca= re, etc.), priority will naturally be given to such project under the framework suggested here because such projects will have greater potential for econom= ic impact than those that are not tied to a particular application or function. Similarly, this framework will inherently give priority to multi-purpose projects that serve economically distressed areas/populations.
Sustainable a= doption of information and communications technologies (ICTs) depends on usefulness= , which is determined by application. The bottom-line outcomes are essentially measures of usefulness. Usability—including cognitive as well as financial costs—is primarily a factor in initial adoption, in trying a technology. Social norms, particularly use by leaders, are another factor i= n sustained adoption, but they are tied to usefulness: an ICT is more useful if it is u= sed by important people (leaders), and leaders will only use an ICT if they fin= d it to be useful. Therefore, the personal commitment of, outreach to, and suppo= rt of top officials will be a critical element in successful projects. Projects that exhibit such should be given higher priority than those that do not.
Networks shou= ld be designed around applications. System architecture and performance (serv= ice characteristics) are not meaningful unless situated by intended application. This is another reason that NTIA should focus on applications even though i= t is primarily funding access and support. That said, technological neutrality is achieved by standardization. NTIA should give priority to projects that uti= lize open standards. Projects that utilize closed or proprietary standards should only be funded if a) clear justification is given for such, and/or b) the project has proportionately large private sector co-investment and/or much greater potential for economic impact than comparable projects.
Retail price should be a marginal consideration—= used to decide between very similar projects, particularly those with similar bottom-line value to a particular area/population—in the grant progra= m.
NTIA and RUS = might consider “escrow accounts” with States, to be disbursed to projects based on impacts and/or meeting interim commitments. For example, = many rural communities lack the organizational, software, and talent infrastruct= ure necessary to plan and execute network projects. The States could hold Feder= al funds in escrow until those entities that propose projects develop their “soft” infrastructure.
Under this approach projects could be approved conting= ent on developing the necessary soft infrastructure. Based on the assumption that = some portion of proposed projects (20-40%) will not be able to meet soft infrastructure requirements in the stipulated timeframe, these escrow accou= nts could be over-subscribed.
Although broadband multiplies the economic impacts of = such soft infrastructure, it can generate benefits even without broadband. Also, such infrastructure can be easily repurposed and generally cannot become stranded. Therefore investment in soft infrastructure that was less than the minimum necessary to trigger payments would not be lost. The availability of funds in escrow would serve as a motivator for project partners to make the required investment in soft infrastructure.
The priority = for computer center grants should be institutions serving economically distress= ed areas/ populations. But even s= uch areas should demonstrate how the investment will impact economic growth. Again, the two key elements are linkage to pre-existing economic development plans, programs, or projects, and focus on applications. General purpose applications—e-mail, office productivity, web browsing, etc.—are fine where a case is made for how these will boost employability and productivity. Special purpose applications in business, healthcare, manufacturing, public safety, etc., should be given special consideration, particularly where tied to economic development plans.
Beyond these basic criteria, the computer centers should show that there is adequate soft infrastruc= ture to operate the centers and should have some plan for sustainability once the grant monies have run out.
Any not-for-p= rofit institutions should be eligible recipients for the grant money, particularly in locales or for populations that are not served by a communi= ty college or public library. For-profit organizations should be considered un= der a similar basis as the broadband program: a minimum 1:1 co-investment, availability, outreach, and support commitments, and collaboration with non= -profit and/or public entities.
All funded ce= nters should provide free access to the general public for at least 40 hours per = week, or should provide a compelling rationale for limited access.
Demand progra= ms should be fully informed by research into ICT adoption. Unfortunately, there has been relatively little research on this topic outside the organizational context. For a summary of this literature as related to econ= omic development see my article “Information Technology and Community-Level Socio-Economic Development,” in Community Development: Journal of the Community Development Society, 2005, volume= 36, number 1, pages 41 – 53, available at htt= p://www.cherry.gatech.edu/lagrange/REFS/IT%20and%20CLSD.pdf.
Generally, pr= ograms to encourage sustainable adoption of broadband should focus on productive u= se of the technology, and be directly tied to work environments and economic development plans. While recreational uses are not inherently bad, they= do not directly contribute to the purposes of ARRA and they do not foster skil= ls that are directly applicable to work. Beyond that, some recreational uses—gambling, pornography, etc.—are not just arguably economic “bads,” but they are also exports that take financial capital, often of the most economically under-resourced persons, out of the household and local economy.
Programs that= focus on usefulness, particularly for productive (i.e., work) purposes, and should initially target leaders. Research shows that usefulness and, to a less extent, social norms are the major factors in long-term use of ICTs. Resear= ch also shows that use on the job increases the likelihood of productive use at home. Organizations and people face a significant learning curve with ICTs.= Usability is important in initial adoption. But beyond that users need help with more than just manual ability, they need help making sense of what the technology does and applying it in their particular situation. Generally, younger peop= le are more amenable because ICTs are more familiar to them and because they h= ave not developed work habits as thoroughly as their elders. Indeed, utilizatio= n of young people as a resource in fostering adoption might be considered as criteria and tactic.
Programs for economically distressed areas/population = should be given priority, but should also be required to show more depth and subst= ance because such areas/populations are often the least familiar with the technology, have the lowest educational achievement (possibly the strongest predictor of ICT use), and are less likely to be in work situations in which ICTs are relevant.
Programs shou= ld be prioritized based on their focus on bottom-line benefits for existing businesses, non-profit organizations, and public agencies. Priority should be given to programs that leverage existing soft infrastructure (organizational capacit= y, software, talent, etc.), and even greater priority should be given to those that catalyze private sector investment in such infrastructure. Sustained a= doption requires ready access to broad and deep knowledge for problem-solving, meet= ing new requirements, etc., so programs that feature partnerships with higher education, private technology companies, and similar knowledge resources sh= ould be given priority.
Adoption shou= ld be measured by the frequency and intensity of ICT use, and by the bottom-line benefits derived from that use. Priority should be given to programs th= at include provisions for tracking these variables even after the proposed intervention (support, training, etc.) has ended.
A nationwide inventory map of broadband availability and capability should be useful for identifying service gaps and opportunities for investment and for informing consumers (corporate and public as well as residential). At very least = the map should show capacity at the end of the network (i.e., upload and downlo= ad speeds), reliability and variability in performance, and price, all based on actual subscriber experiences rather than provider data. User demographics = and typology should be captured and displayed to the extent that doing so does = not compromise their privacy.
Broadband map= s would be of much greater use if they included application types, levels and types= of utilization. Such data would be particularly useful for funding and oversight agencies, as well as fund recipients, to evaluate the success of projects. This data can be most effectively and efficiently gathered via pa= cket “sniffing” but such practice would clearly create privacy conce= rns. It could also be collected via user surveys, but consumers may reticent to complete such surveys if conducted by private firms or public agencies, and such surveys can be costly to carry out and susceptible to threats to reliability and validity. This data would be useful for documenting economic impacts, identifying opportunities= and requirements for encouraging sustainable demand, and for guiding investment= in software, training programs, and other soft infrastructure.
Given the challenges of gathering the data and the nec= essity of it being untainted by bias—either that of providers or of consumer advocates—independent non-profit organizations should be charged with this task, with oversight from the States. Universities may be ideal entiti= es for mapping because of their capabilities in conducting research and managi= ng sensitive data, and their lack of vest interest in the results.
Geodata shoul= d be gathered at the street address level, but should be displayed only in ways = that protect the privacy of consumers. Broadband inventory information should include download and upload speeds, geographic location, price, and provide= r at minimum. Cellular telephone (3G and 4G), digital carrier (i.e., T-1 and ISD= N), fixed wireless (WiMax), native LAN (Ethernet and wi-fi), optical carrier (OC/SONET), satellite, and all other services used for internet access shou= ld be accommodated in the inventory. Reliability (i.e., mean time between fail= ures and mean time to repair), variability (changes in speed and other factors at various days/times), and utilization (persons per connection, time online, types of use) should also be gathered because this data is necessary for evaluating the success of projects and to well-informed policy.
States should= support the collection of information from users as well as providers as conditions= of receiving statewide inventory grants. The States of California, North Carolina, and Vermont have exemplary mapping programs because they combine = user data with provider data. Broadband Census and speedmatters.org are examples= of third party broadband maps based on user data.
The NTIA should fund the broadband mapping and coordin= ate those actually gathering the data. The FCC should coordinate with and provide regulatory oversight for service providers regarding this data. The two agencies should both provide access to broadband inventory information for = the consumers and policy-makers.
The primary c= riteria for the BTOP grants should be economic impact, but this should be weighted = to account for local economic conditions. Financial need may be assessed as public revenue per capita, millage rate, and similar measures of financial capacity. Per capita income, poverty rate, employment level, educational attainment, and similar economic indicators may also be used to demonstrate need. Factors that impact the per user cost of broadband deployment should = also be considered in financial need, particularly population density, existing assets, and terrain.
A critical ch= allenge for NTIA is to balance “need” with “capability.” Unfortunately, locales with the greatest need too often have the least capabilities to deploy and/or operate a broadband system. A fundamental tru= th of telecommunication is that the network is only as valuable as its applications. Indeed, networks should be designed around applications. Even= in areas of high poverty, broadband investments decisions should be based on w= hat individuals and organizations will do with the infrastructure. Defining applications takes a great deal of collaborative analysis, learning, planni= ng, and talent. Capability is built and demonstrated by this process.
Therefore, in addition to financial capacity and deplo= yment costs factors, NTIA should consider whether applicants have a clearly defined the productive uses—the applications—for the network, and show that they have the capabilities to maximize the value of the network. It should be seen as inadequate for applicants to say they are simply going to provide broadband service. Generally, such “non-application-oriented” broadband services can be implemented without Federal assistance.
Proposals sho= uld include information about the individuals and organizations that will build= and operate the system, including their experience, expertise, and the exte= nt to which they will be dedicated to the project.
Efficiency, efficacy, and equity are generally mutually exclusive. The most efficient, effective, and equitable way to expeditiously establish BTOP is recognize that there will be a trade-off. As the purpose = of the Recovery Act is to spur economic growth, it would seem reasonable to fo= cus on efficacy.
The most effe= ctive way to carry out BTOP is to require partnerships and plans. The partner= ships should include potential users with commitments to use the service, technol= ogy vendors co-investing in the system (not just selling components or service), and higher education and economic development agencies acting as connectors= and facilitators. The plans should be pre-existing economic development strateg= ies that incorporate technology, rather than just network technical plans produ= ced in response to the funding opportunity. Such applicants are more likely to execute projects efficiently and to realize measurable economic gains from = the projects, and well-justified, making an approach that requires partnerships= and plans equitable. In addition, such applicants will invariably provide easily auditable project plans, including detailed budgets and financial projectio= ns, geographic coverage, key performance indicators, milestones and timelines, = etc.
It is especia= lly advised that NTIA require applicants to define key performance (KPI) indica= tors for each project. KPI are quantitative measures of critical success fac= tors, measures of progress toward goals. The definition should state exactly how = the KPI are to be measured and means by which they may be audited. For example,= KPI for broadband projects might include connection speeds, number of users, geographic coverage, price, etc. Project goals and milestones should be tie= d to KPI. Project tasks should also be tied to KPI: “In order to provide targeted geographic coverage, we must…” Milestones are verifiab= le conditions that occur due to the completion of tasks, such as issuing RFPs, erecting towers, or connecting users. Project plans should specify quarterly milestones and KPI levels.
Wasteful or fraudulent spending for the purposes of the grant program defined as that which was not included in the detailed budget= and project plan submitted by the applicant, that is not tied to a project milestones and key performance indicators. The level of performance should = be determined by making or missing project milestones, executing tasks, and by= key performance indicators.
Projects that miss milestones in one quarter should be= put on notice. If milestones are missed in any two quarters, a project should be considered “at risk,” and State should be required to provide additional oversight. Projects that miss milestones in any three quarters should be considered “failed,” and required to restructure. At = this point the State should take over fiscal control and make a determination of likelihood of success. If likelihood of success is less than 50% the projec= t should be terminated. Project that miss milestones in any four quarters should be terminated, and their assets should be liquidated by the State, returned to NTIA, and/or redistributed to other projects.
Generally, USDA should exercise greater flexibility in= what it funds, given the requirement that the funding go to rural areas. NTIA sh= ould focus on “access” or facilities necessary to provide broadband service to subscribers. USDA RUS funds should be seen as additional resourc= es to meet the needs of rural development. NTIA and USDA should use the criter= ia discussed above to determine funding, with USDA funds being provided under = the rurality requirements specified in the Act.
“Unserv= ed” and “under-served” should be defined in terms of consumers̵= 7; actual experience and locales’ requirements based on pre-existing economic development plans, rather than service providers’ information about coverage and performance. These terms should be defined relative to economic conditions in order to specify what is necessary for economic growth.
Broadband sho= uld be defined in terms of capacity to the network terminating device (e.g., modem). This allows for a common definition across platforms, based what the consumer experiences. Current definitions distinguish between upload and download speeds, but they do not accommodate differences over time, between performance at peak and off-peak network utilization. This is significant because some broadband technologies experience non-linear degradation in performance during peak utilization. Also, the current definition makes it difficult to compare “flavors” of broadband.
Therefore, br= oadband service should be measured as a “median” speed: the bit rate halfway between download and upload speed and halfway between peak and non-= peak utilization. For example, if at peak utilization the download capacity is 5= 00 Kbps and the upload capacity is 200 Kbps, the media peak speed would be 350 Kbps. If the median non-peak speed is 600 Kbps, then the overall median wou= ld be 475 Kbps.
Since broadband performance varies geospatially, perfo= rmance should be measured at particular locations. Specifying performance at the network terminating device accommodates this approach to measurement.
For policy purpose, broadband performance should be tiered into basic, enhanced, and advanced performance= per dollar. Three tiers are enough to provide significant distinctions yet simple enough to avoid confusing consumer and policy-makers.
Performance to mobile devices will be significantly le= ss than fixed devices due to the inherent characteristics of the media. Theref= ore tiers for mobile devices should be stepped down from fixed: the standards f= or basic broadband to a fixed location should be the standard for enhanced ser= vice to a mobile device.
Also, the def= inition should be monetized in order to link it to economic context. An arbitra= ry but useful financial target might 1% of the monthly Federal Poverty Level Guidelines for a family of three, rounded to the nearest dollar, as a targe= t monthly price for basic broadband. For 2009 this amount would be $15.
Basic broadband service should be defined as a minimum=
of 480
median Kbps at the financial target of $15 per month, or 32 median Kbps per
dollar. Enhanced broadband should be defined as a minimum of 2 median Mbps =
for
$32 per month, or 64 median Kbps per dollar. Advanced broadband should be
defined as a minimum of 20 median Mbps for $160 per month, or 128 median Kb=
ps
per dollar. Note that these are recommended minimums for broadband systems =
and
technologies that are currently available. These levels should be increased=
a
minimum of 10% per year. Broadband
capacity should continually increase to meet application requirements.
Any location without a particular level of service fro= m any provider should be considered “unserved” at that level. Any location with service from only one provider should be considered “underserved.” Note that, based on this definition, most of the= United States would be considered unserved for basic broadband.
Basic mobile broadband should be defined using 16 medi= an Kbps per dollar as a criterion, with a minimum median Kbps of 240 for $32 p= er month. Enhanced mobile broadband would be equivalent to basic fixed broadba= nd, and advanced mobile broadband would be equivalent to enhanced fixed service= s. Again, note that this is a minimal definition for current systems and technologies. It is likely that mobile technologies will advance faster tha= n fixed, therefore the standards should progress more rapidly.
These definit= ions are contingent on the technology and economic conditions. As speeds increase wi= th advances in technology and as incomes change, so should the definitions. The definitions provided here allow for this flexibility, and should be see= n as suggestions for how to structure definitional criteria rather than as suggestions for rigid definitions of broadband.
Policy-makers= and regulators should move towards a single unified regulator regime for all telecommunications services. The distinctions between cable television, telephone, cellular telephone, etc., are outdated and cause inefficiencies = in the marketplace, inequities for consumers, and increase the cost of regulat= ory oversight. There should be a return to the principle of common carriage: no provider may discriminate between traffic originating or terminating on its= own network and traffic originating or terminating on other providers’ networks. All carriers should share the costs of interconnection based on t= he capacity of their network at the interconnection point(s).
Payment shoul= d flow from origination to termination, with the balance of payments falling on those networks that originate the largest amounts of traffic. Note that this policy relates to origination of traffic (content), not to requests. Reques= ts for content are generally much smaller than the content itself, therefore content owners can expect to pay more in network costs than consumers. Of course, these costs will inevitably be passed on to consumer as part of the cost of the content. These policies should apply to all projects receiving stimulus dollars, contractual agreements to backhaul providers notwithstand= ing. While these principles should guide regulation, parties should be free to e= nter into private agreements that deviate from and supersede these guidelines. Funded projects that do not abide by these principles should be treated as “at risk,” as defined above. These requirements should apply in= to perpetuity.
The definitions and requirements discussed above should address other issues in the RFI. “Community anchor institutions” can be practically defined as public or quasi-public entities that provide essential services, and that make major financial commitments to purchase services provided by funded projects. The definition of broadband service provided above incorporates retail price.
While employm= ent, jobs, and wages are important indicators of economic growth, they are lagging indicators, which chan= ge well after the growth has occurred. Leading indicators are expenses and revenues, the ratio of the two or productivity, and the latter minus the fo= rmer or profitability. Another leading indicator is reduction of costs or increa= se in revenues relative to one’s peers, or competitiveness. Since the purpose of BTOP is to spur economic growth, its success should be measured in terms of these leading indicators= for those individuals, enterprises, and institutions that use the services and systems funded through the program. This approach not only focuses attentio= n on the fundamental factors of economic growth, it also gives those who receive= funds a vested interest in the economic success of their customers.
Leading economic indicators can be applied to public a= nd non-profit agencies by translating revenue into constituent satisfaction and support, and by translating profits into budget surpluses and increasing capacity.
Of course, leading economic indicators are outcome met= rics. BTOP should also require applicants to specify input and output metrics. Input metrics are generally budget ex= penditures, on BTOP funded components but also expenditures on complementary goods necessary for success, particularly soft infrastructure such as organizatio= nal capacity, skills, software, and talent. Output metrics are the key performa= nce indicators: geographic coverage, service performance, prices, etc. Mileston= es link inputs to outputs. Applicants should be required report input, output, and outcome metrics, along with project milestones, these should be generally standardized in the manner described above but should be specified by each applicant.
The Rural Telecommunications Congress invites NTIA to actively participate in our conference to be held October 4 – 7 of th= is year in LaGrange, Georgia.
The most effective ways RUS could offer broadband fund= s to ensure to increase access to rural residents is to award funds on the basis= of strong public-private partnership that are implementing pre-existing econom= ic development plans with clear and reasonable objectives for availability, capacity, flexibility, reliability, and prices.
RUS should position itself to support resources for particular broadband applications—business & industry, education, healthcare, etc.—for rural areas. These should fit well between NTIA’s dual focuses on components for services and systems related to end-user access and activities to encourage sustainable adoption of broadba= nd regardless of rurality.
Generally, criteria for the level of broadband access = and service needed to facilitate economic development should be tied to the economic conditions of the area in question, to pre-existing economic development plans and strategy, and to partners’ commitments to provi= de complementary investments and to utilize the service. Consider that requirements in rural plains states are likely to be rather different from requirements in mountainous areas, and requirements for economic development based on industrial expansion will be very different from requirements of strategies focused on tourism. Please review the detail recommendations abo= ve related to these criteria.
The combination of setting criteria based on defining broadband in terms of capacity and cost and evaluating success in terms of leading economic indicators, along with considering partnerships and plans = in determining viability, should enable RUS to address the priorities 1 and 2. Current and former RUS borrowers should be required to adhere to and be evaluated on the same criteria. Engaging the States, and possibly establish= ing escrow accounts, in conjunction with the criteria discussed above should he= lp assure that projects are fully funded and ready to start once they receive funding under the Recovery Act.
RUS should use the same criteria as suggested to the N= TIA in determining the success of Recovery Act broadband activities. While “first-time” access is important, it does not necessarily contribute to economic recovery, particularly if that service is provided b= y a distant corporation and used to make purchases of products and services—everything from Amazon.com to Worlds of Warcraft, particular= ly social “bads” such as gambling and pornography—from non-l= ocal firms.
Success must be evaluated in terms of short-term econo= mic indicators: decreasing costs, increasing revenue and support, productivity,= and profitability and capacity. Improvements in these indicators must necessari= ly precede lagging indicator such as business viability (businesses “sav= ed”), capital investment (businesses “created”), job retention and/or creation, and decline in unemployment rates.
State and community support should be required in the = form of commitments to use the services and complementary investments in soft infrastructure. Such is not only necessary for the success of these projects but will actually appreciate along with the economic benefits realized by t= he projects.
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