Gustavus Broadband Update: No FCC Grant This Time, Other Funding Options

[Nathan Borson]

Gustavus Will Not Apply for FCC Grant 

At a special meeting last Friday, the Gustavus City Council voted down a resolution to apply for funding from FCC's Rural Broadband Experiments Program. 

* The grant preparation would have cost an estimated $30,000, which would have to come from city reserves as the broadband planning grant from the state cannot be used for grant preparation. The Council appeared willing to make that investment, but declined to do so for other reasons.

* As broadband project manager Nathan Borson explained to the council, there appears to be a near-zero chance for Gustavus to win this grant due to the limited funds available and the reverse auction bidding that will be used to select winners. Because Gustavus has no matching funds, it would have to request nearly the full amount of support FCC has calculated for our area. Grants will be awarded to the applicants requesting the lowest percentage of the support calculated for their area so Gustavus would be near the bottom of the list. This analysis was completed only after the Gustavus Community Network board recommended submitting a grant application, a resolution was drafted, and a special meeting was organized. Considering this new information, Borson was unable to recommend passage of the resolution.

* Council members expressed support for broadband, including municipal broadband, but had other concerns related to the FCC program. Mayor Sandi Marchbanks was concerned about the ability to obtain and repay the loan that would be required to build the proposed network (FCC funds would be disbursed over a 10-year period), and was also concerned about the staff time and expertise that would be required to be an "eligible telecommunications carrier" (basically, a phone company) as required under this program. Council Member Mike Taylor questioned the local ability to manage such a network, citing unreliability and spotty support of the existing Gustavus Community Network.

Other Funding Options 

* The current FCC funding opportunity is an "experiment" whose results will be used to design a much larger Connect America Fund Phase 2 program that will disburse billions of dollars per year to support broadband and phone service in high-cost areas including Gustavus. These funds come from the universal service surcharges on everyone's phone bills and are currently used to keep the cost of basic phone service reasonable in Gustavus and other high-cost areas. When Phase 2 of the Connect America Fund is fully realized, broadband providers will bid to provide Internet access in these areas, and those asking for the lowest subsidy for the best service in each area will win the support. This is a very promising fund source for the Gustavus Broadband project because we would only be competing against other providers who propose to offer wired broadband service in Gustavus. Nobody has expressed any interest in doing so to date. So we will be keeping a very close eye on the FCC's progress to implement this program.

* State capital funding is always a possibility, however remote. At this point, Gustavus may wish to consider applying for funds to carry out the design phase of the proposed broadband network. This will be a topic for the next Gustavus Community Network board meeting.

Next Steps

* Keep watching the FCC

* Discuss state funding for network design.

The broadband project web site has been updated with this post. You

can always go there to see the latest news and status:

https://sites.google.com/a/corvid.info/gustavus-broadband-plan/

Nate

Nathan Borson, Co-Owner

Corvid Computing, Project Manager

City of Gustavus Broadband Plan

http://bit.ly/r48JAh

(907) 697-2810