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Remarks of Assistant Secretary Strickling at Transforming Communities: Broadband Goals for 2017 and Beyond

November 30, 2016

Remarks of Lawrence E. Strickling
Assistant Secretary of Commerce for Communications and Information
Transforming Communities: Broadband Goals for 2017 and Beyond
Washington, D.C.
November 30, 2016

--As Prepared for Delivery--

Thank you to NCC, SHLB and US Ignite for inviting me here today to present what will be my last speech about broadband as NTIA administrator. I want to give special thanks to John Windhausen, Deb Socia and Bill Wallace, for all their work in helping to make broadband access and adoption a national priority. 

As this conference focuses on broadband goals for the future and setting priorities for the next Administration, particularly the possibility of a new infrastructure program, I would like to offer my evaluation of what worked well in the Obama Administration to expand broadband access and adoption.  The broadband grant programs we developed and managed at NTIA provided an important opportunity to invest in the nation’s future and spurred private investment and economic development.  We learned a lot and we continue to share those lessons with communities around the nation through our BroadbandUSA program. 

Just to remind everyone, the 2009 American Recovery and Reinvestment Act provided $4 billion to NTIA to use for grants to increase broadband access and adoption in unserved and underserved areas of the country.  The challenge we faced was substantial: How could we invest in new broadband infrastructure in areas of the country where private industry had considered it too risky or expensive to invest?  And how could we ensure that those investments would efficiently utilize taxpayer dollars to support long-term, sustainable broadband business models?   Looking at the results of our efforts, the program we designed successfully met this challenge.

As we will detail in a new report that will be released in the coming weeks, the projects built through these grants are benefitting communities across the country today and will continue to deliver benefits for years to come. Our grant recipients deployed or upgraded more than 117,000 network miles across the country and connected more than 25,000 community anchor institutions such as schools, libraries and hospitals to reliable, high-speed broadband access.  We invested $3.3 billion in infrastructure projects.  Today, projects accounting for nearly all of that funding, more than $3.2 billion, are still operating and serving communities across the country.  

With our infrastructure projects, we focused on building middle-mile networks that would bring high-speed services into an entire community or region.  Our goal was to spur private-sector investment by encouraging local Internet service providers to connect to these networks to deliver service over the “last mile” to homes and businesses.  That is why all networks built with Recovery Act dollars had to comply with open access rules that let all other carriers interconnect with these networks on fair and non-discriminatory terms.  We also encouraged our grantees to connect directly to the key anchor institutions in these communities where the speed needs of schools, libraries and other institutions were substantially greater than for the community at large.

Our focus on funding middle-mile projects and on connecting community anchor institutions has helped extend our investments and ensured the long-term viability of the projects we funded. This approach has paved the way for hundreds of broadband service providers across the country to connect end users to high speed broadband service, thereby multiplying the impact of those investments. Indeed, the Department’s Inspector General reported that three-quarters of our grantees had entered into interconnection agreements with other carriers, thereby allowing those carriers to extend their reach.

For example, with the help of two NTIA grants, the Northwest Open Access Network, or NoaNet, deployed more than 1,300 miles of fiber to reach areas of Washington State that were previously unserved.  This network now supports 61 last-mile providers that serve more than 260,000 customers. 

Among those who have benefitted from NoaNet is a Delta Dental call center in the rural northeastern town of Colville, Washington. Given the lack of broadband access needed to run its facility, Delta considered closing the Colville call center and relocating it to a more urban and wired region of the state. But with the expansion of NoaNet to the region, the company was able to keep its call center in Colville, saving 130 local jobs. 

In Southern Illinois, Clearwave Communications has connected 570 community anchor institutions through its 1,500-mile network, built with the assistance of a $31 million NTIA grant. In addition, Clearwave now has interconnection agreements with 22 last-mile and cellular providers across southern Illinois.

The economic impact study performed for us concluded that the communities helped by NTIA grants experienced an estimated 2 percent greater growth in broadband availability than non-grant communities. That growth is estimated to generate as much as $21 billion in annual economic activity. At the same time, the additional broadband infrastructure could be expected to create more than 22,000 long-term jobs. 

Investing in infrastructure only addresses part of the broadband challenge in the United States.  We must also focus on getting more people connected to these networks once they are built.  We have made progress on adoption in the last eight years.  Nationally, the percentage of American households using the Internet at home has increased from 69 percent in 2009 to 73 percent in 2015.  We funded $250 million of broadband adoption projects under the Recovery Act.  Those projects generated more than 665,000 new household subscribers and provided more than 20 million hours of digital literacy training to American residents across the nation.

Education is important.  In our studies of households that do not use the Internet, the top reason cited by households for not being online is that they do not need it or have no interest in going online. The second reason they gave for not going online was that they could not afford it.  We have taken all the lessons learned from our adoption grants and developed a Broadband Adoption Toolkit that provides communities step-by-step instructions on how to present effective broadband adoption programs to their citizens.  Portland, Oregon, for example, utilized the Broadband Adoption Toolkit in drafting its Digital Equity Action Plan, which outlined actions aimed at bridging the digital divide for citizens in Portland and Multnomah County by providing affordable access, training and tools. 

Indeed, since the end of the grant program, we have refocused our entire broadband team on providing technical assistance to communities through our BroadbandUSA program.  We have been working with communities across the country to provide guidance and technical advice on the best ways to increase access to affordable broadband in their communities, on effective tools for expanding digital literacy and broadband adoption, and in helping them find resources that might be available to assist in these efforts.

For example, BroadbandUSA is working with the city of Baltimore to expand its municipal fiber network to underserved public housing sites and public schools. Our team is also advising the city regarding its plans to build a world-class industrial zone around the Port of Baltimore that can attract and support global manufacturers, transportation and logistics companies by providing high-speed, reliable, low-cost broadband.

In addition to the Broadband Adoption Toolkit, we have developed a series of publications to assist communities, including our recently released Smart Cities Toolkit, which provides successful strategies for implementing smart cities projects. We also developed a Stakeholder Outreach Toolkit, to help communities generate local awareness and support for broadband projects.  

Many of you are aware of the work of the Broadband Opportunity Council, created by President Obama in March 2015 to bring key cabinet departments and agencies together to figure out what actions the federal government could take to eliminate regulatory barriers to broadband deployment and to encourage investment in broadband networks and services.  I am pleased to report that most agencies are making good progress toward completing the tasks they agreed to in the report and many have completed their work.

As part of our council commitments, NTIA has developed and is beta testing its Community Connectivity Initiative -- an online self-assessment tool that will provide local leaders with benchmarks and indicators for assessing broadband needs in their communities. Upon completion of the self-assessment tool, communities will receive a report with recommendations for how to improve their broadband capabilities, including referrals to BroadbandUSA’s technical assistance experts. BroadbandUSA is aiming to launch this initiative in early 2017.

The last eight years have brought us measurable successes as well as the development of ongoing programs to build on those successes.  With all of this experience and knowledge of the last eight years, I want to leave you with some thoughts on what I see as the key lessons to guide future government efforts to expand broadband access and adoption. 

The first is that we must focus on communities and the critical role they play in the success of any of these efforts.  Communities must be involved in all aspects of a broadband project including assessing needs, building support among stakeholders, finding partners or securing funding and implementation. This is why we have put so much emphasis on working with communities as part of our BroadbandUSA program and ensuring that they are driving every stage of a project.

Second, to the extent the government considers new funding to build broadband infrastructure, sustainability must be a top priority. That was one of our key factors in determining which projects to fund during the Recovery Act program.  And as I noted earlier, our focus on sustainability has resulted in nearly all of the infrastructure projects having survived on their own once the federal grant dollars were spent.  It makes little sense to utilize tax dollars to provide the capital to construct a project, if the project cannot generate the operating revenue needed to sustain that network in the future.

Third, any new assistance program must ensure that dollars are provided to organizations that have a proven record of building and managing a broadband network. And they must be given the leeway to design their projects in a way to satisfy the requirement of sustainability.  During the early days of the Recovery Act program, there were suggestions made about creating artificial boundaries for allocating the grant dollars.  Had we adopted such an approach and deprived the applicants of the ability to define a service area where they thought they could build a sustainable project, we would have had a far greater number of projects that failed and wasted tax dollars.

Fourth, to the extent any public money is allocated for middle-mile networks, we should continue to require open access so that last-mile providers can take advantage of that investment. As I mentioned earlier, that multiplier effect of allowing other providers to take advantage of public investment of tax dollars in middle mile networks can lower their costs and deliver great benefits in communities across the country.

In conclusion, I am very proud of the solid foundation NTIA and the Obama Administration laid over the last eight years to connect communities across America and to expand the adoption of broadband services by many Americans. But it is clear that there is more work to be done, and we need to continue to learn and build on our successes.

Going forward, NTIA has an enthusiastic team of experts in place who stand ready to work with communities, policymakers and all of you in this room to continue building out the digital infrastructure needed to help compete in the global economy and narrow the digital divide.  As I depart NTIA in a few weeks, my hope is that NTIA’s strong record of accomplishment of the last eight years will continue.

Thank you for listening.