December 19, 2001
The Honorable Nancy Victory
Assistant Secretary for Communications and Information
1401 Constitution Avenue, NW
Washington, DC 20230
Dear Madam Secretary:
Extend America, a new commercial wireless company offering advanced mobile telecommunications and information services, submits the following comments related to Docket No. 011109273-1273-01, the National Telecommunications and Information Administration Request for Comments on Deployment of Broadband Networks and Advanced Telecommunications.
Please include these comments in the record.
Edward T. Schafer
RE: Comments from Extend America on the National Telecommunications and Information Administration Request for Comments on Deployment of Broadband Networks and Advanced Telecommunications [Docket No. 011109273-1273-01].
Extend America is a new commercial wireless company, headquartered in Bismarck, North Dakota, offering advanced mobile telecommunications and information services in 5 states: North Dakota, South Dakota, Montana, Wyoming, and Nebraska. It is the goal of Extend America to close the “digital divide” that increasingly separates rural America from the economic dynamism of the rest of the nation. We believe the survival of the rural quality of life depends on delivering quality communications to a mobile public and to enable education, medical care, and commerce. Extend America is uniquely devoted to the rural customer and will provide the most modern wireless voice and digital broadband communications to underserved rural markets.
Extend America intends to offer quality mobile voice services and greatly enhance Internet access and high-speed data transmission. Extend America is an integral part of the all-digital Nextel Communications national and international networks, thereby connecting rural communities with the rest of the nation and the world with advanced telecommunications and data services. The mobile wireless transmission speeds offered by Extend America will enable rural consumers to access higher bandwidth services than the infrastructure currently allows. Since Extend America will be utilizing cutting edge wireless technologies, the services provided to its rural consumers will be constantly evolving, multiplying voice, data, video, and multimedia applications through ever increasing bandwidth technologies.
One particular area of emphasis that Extend America will have in the range of mobile high-speed data offerings will be the delivery of public safety applications. We believe that there is an ever-increasing need for mobile broadband public safety applications and these services will be a major focus of our company’s business plan. In order to meet the public safety needs of rural Americans in today’s environment, mobile broadband data applications are necessary and Extend America intends to offer such services throughout its service territory
Extend America appreciates the opportunity to provide comments related to broadband policy in the United States. As a company based in North Dakota, one of the most rural states in the Union, we are focused on delivering broadband services to rural consumers. Thus, our comments will focus on issues related to stimulating broadband deployment in rural areas. Our service territory includes areas with some of the lowest population densities within the United States. In addition to our general commitment to rural consumers, we intend to enhance telecommunications services in many under-served areas such as Indian Tribal lands were broadband services can stimulate much needed economic development.
NTIA can play a key role in advancing broadband deployment in rural and under-served areas through its policy development authority and its advocacy of grant and loan financing programs and regulatory policy. Specifically, NTIA can lead the Administration in supporting legislative initiatives and urge the adoption of policies that will help advance a variety of broadband technologies.
We note that there are currently several legislative initiatives that are under consideration in the U.S. Congress, which could help to stimulate the deployment of broadband technologies and services in rural areas, and we encourage the Administration to consider supporting such efforts. In addition, the Administration can play a key role in advocating technologically neutral regulatory and finance qualification criteria at the appropriate regulatory and administrative agencies to help promote broadband deployment.
In general, Extend America believes that there are two primary policy considerations that NTIA – or any other federal agency – should use in formulating a broadband policy. The Administration can best foster entrepreneurship and innovation through the adoption of a technologically-neutral policy – such as what Congress adopted under the Telecommunications Act of 1996 – and providing for stimulation for investment through low-interest loans and universal service programs.
The first principle we suggest is to encourage the development of a variety of technologies through technically neutral criteria with respect to government loans or other support systems, such as universal service. Government programs to stimulate broadband deployment ought to be structured to encourage land line and wireless technologies alike, not prefer one over the other. A second criterion that should drive Administration broadband policy is a clear recognition that government does play a critically important role in stimulating investment through low-interest loans and universal service programs. Any effective broadband policy should recognize that entrepreneurship and innovation often need government credit support and, in some cases, grant support. It is important that the Administration advocate and advance programs that provide low-interest loans and high cost support to rural carriers. These essential programs ought to be an important part of any broadband policy.
Low-Interest Financing for Broadband Deployment in Rural Areas.
One of the most efficient and cost effective ways to stimulate broadband deployment in rural areas is for the government to provide low-interest financing to rural carriers. As a start-up rural telecommunications carrier, we can attest to the critical importance that low-interest financing plays in developing a feasible business plan that can adequately serve rural consumers. We encourage the Administration to support not only the existing broadband pilot program administered by the Rural Utility Service (RUS), under the United States Department of Agriculture, but also legislative initiatives to expand the program which will help spur broadband deployment in rural areas. This program provides low-interest loans to qualified borrowers to finance projects to deploy broadband services in rural areas. In fiscal year 2001, about $100 million in low-interest loans were available. The FY 2001 program defined a qualified rural area as non-metropolitan population centers with no greater than 20,000 people and the definition of broadband services was determined to be 200 kilobits per second, each way.
In the fiscal year 2002 appropriations bill for the Department of Agriculture, $49.4 million in appropriations was provided to the Distance Learning/Telemedicine program, of which $22.5 million in appropriations was provided for the broadband pilot program. Of the $22.5 million, at least $12.5 million will be made available for grants and the remainder for loans (or grants at the Administrator's discretion).
In addition to the fiscal year 2002 appropriations bill for the Department of Agriculture, there are two other significant efforts – originating in the U.S. Senate – to provide even more funds for the RUS broadband program.
First, included in the Baucus substitute for the economic stimulus package is a provision that would provide an additional $5 million for broadband loans. The loan authority under this provision is limited to $400 million. If it were to become law, this provision would add $400 million in addition to the funds provided for broadband grants and loans made available under the fiscal year 2002 appropriations bill.
Second, there is a bi-partisan effort to further expand the broadband program in the Senate version of the Farm Bill. Lead by Senators Daschle, Dorgan, Stevens, and Burns, the Senate Farm Bill contains $100 million, per year for five years, in direct spending for the broadband program. Further, the broadband program would be changed from a “pilot program” under the Distance Learning/Telemedicine program to a freestanding, sustainable program. The provisions do not specify how much of these funds would be available for grants and loans. It would be up to the discretion of the Administrator to determine how much of the $100 million in funding would be dedicated to grants and loans. The significance of this particular initiative cannot be overstated. The Senate legislation would provide stable funding for the next five years, providing needed assurance for business planning and long term deployment schedules.
It is important that the Administration support this bi-partisan legislative effort to expand the RUS broadband program. The Administration’s support for the Senate effort to expand the broadband program and put it on secure financial footing for the next five years in the Farm Bill is critical. Companies like Extend America that are trying to deploy broadband services in under-served areas need the assurance that low-interest financing is going to be available more than just one year at a time. The long-term vision of the bi-partisan Senate effort is a model that the Administration should embrace.
Maximize the Loan Authority of Low-Interest Financing Programs.
In addition to supporting legislative efforts to expand the RUS low-interest broadband grant and loan programs, there are some discretionary decisions that the Administrator of the RUS can make that will either maximize the effectiveness and reach of the broadband loan program or minimize it. The need for these loans is great. The Administration should provide the maximum amount of loan authority possible to the RUS to provide broadband loans through the appropriated amounts provided by the U.S. Congress. We urge NTIA, as the principle voice of the Administration in telecommunications policy, to encourage the Office of Management and Budget and the RUS Administrator to authorize a significant increase in the amount of loans that can be awarded to qualified borrowers under the broadband program. The FY 2002 appropriated amounts should be sufficient to provide hundreds of millions of dollars in loan authority.
The RUS Telecommunications program has a long history of making sound accounting decisions in awarding only feasible loans. We expect this tradition to continue and the Administration can, with sound justification, translate only a small amount of appropriated funds into hundreds of millions dollars of broadband loan authority. There should really be no reason why a qualified borrower with a sound business plan meeting RUS standards should be turned away from low-interest financing to deploy broadband in rural areas. A broad interpretation of loan authority based on the FY 2002 appropriations levels is needed until additional legislation is passed to ensure a long-term generous program.
Definition of Broadband Services.
With respect to the definition of broadband services as it relates to the RUS broadband program, it is imperative that the RUS adopt a flexible definition that will not rule out certain technologies. Currently, the RUS uses the broadband definition established by the Federal Communications Commission (FCC) in its annual broadband report, which is 200 kilobits per second each way. Rather than lock into one particular definition, the Administrator should apply a flexible definition of broadband services to encourage new broader bandwidth technologies that provide significant progress towards higher bandwidth services in rural areas. The program should foster the development of a variety of technological applications, including terrestrial and satellite wireless services. This can only be achieved if the RUS adopts a flexible definition. The current definition of 200 kilobits per second each way could have the effect of excluding many wireless technologies which can provide broadband and "broader-band" technologies which are capable of evolving over time.
Rather than being limited to a particular definition, the RUS should consider applications for low-interest loans from carriers that are deploying technologies that make significant progress towards broader bandwidth services. In the wireless area in particular – satellite and terrestrial – technology is changing at a rapid pace. These services should not be excluded from this important program although they may not always meet the 200 kilobits per second definition. The definition should be flexible enough to permit financing for applications which represent a dramatic, meaningful and truly bandwidth enhancing technologies in the mobile wireless context.
The joint report by NTIA and the RUS, Advanced Telecommunications in Rural America, pointed to the importance of wireless technologies in closing the digital divide separating many rural residents from the rest of America. The report specifically mentioned that government should encourage the development of new wireless technologies. The adoption of a flexible definition of broadband services by the RUS for its broadband program is one very important step the Administration can make to help advance the goal of encouraging the development and deployment of new wireless broadband technologies.
Extend America urges NTIA, as the Adminstration’s principle voice in telecommunications, to urge the RUS to employ a flexible definition of broadband services under its broadband program. The definition should recognize progress towards broader bandwidth, not become fixed to one particular level.
Universal Service Support and Broadband Grant Programs
In addition to supporting broadband finance programs such as the RUS broadband program, there are other essential programs that play a critical role in stimulating broadband deployment. One indispensable program is high cost support under the universal service system. The Telecommunications Act of 1996 mandated that the Federal Communications Commission (FCC) “preserve and enhance” universal service through the adoption of reforms that not only would allow for the universal service system to accommodate a new competitive environment but also to ensure that “consumers is all regions of the Nation, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services.” 
One of the most important steps that could be taken to simulate broadband deployment in rural areas is for the FCC to fulfill the mandate of the Telecommunications Act of 1996 and identify support mechanisms for advanced services. In establishing such support mechanisms, the FCC should ensure that such support is available to a variety of broadband technologies and carriers (provided such carriers meet the necessary criteria to be designated as an eligible telecommunications carrier under Section 214(e) of the Act).
Extend America urges NTIA to advocate on behalf of the Administration that the FCC act to identify additional universal service support mechanisms for broadband services, including services provided by new entrants offering wireless technologies.
Furthermore, Extend America believes that NTIA’s Technology Opportunity Program (TOP) can also help stimulate broadband deployment. A focus on new wireless technologies and partnerships within this program can be very productive. TOP and other grant programs that provide assistance to end users can help drive demand for broadband services in rural and small communities and become the building blocks of a broadband network for a community. We encourage the Administration to support the TOP program and make it part of its broadband policy.
Finally, Extend America believes that mobile wireless data communications can have a significant public safety benefit in rural areas where distance is a challenge to traditional wireline and wireless services. New carriers like Extend America can offer new solutions to rural public safety communications needs. The Administration should adopt policies and dedicate resources to efforts which encourage partnerships between the public and private sector to utilize commercial wireless technologies in the public safety arena. The TOP program is one program that has traditionally supported many public safety projects and this ought to continue to be a focus of the very important TOP program.
Again, we appreciate the opportunity to provide comments to NTIA regarding broadband policy.
Edward T. Schafer