Why Round 1 Was a Total Failure

By now, we've all heard the bad news. NTIA and RUS are not interested in funding the projects we worked so hard to propose. One would think we "losers" would have the feeling of someone that lost a church raffle, or missed out on another Powerball jackpot. Or perhaps lost a game to the better team. You know the feeling - you shrug, and think hey, you win some, you lose some.

I, for one, do not feel that way. I feel a sense of disgust that I did not think a grizzled, semi-jaded poor country lawyer was capable of. The reason for this sickening feeling? The process has exposed how dysfunctional our federal bureaucracy truly is, and is a harbinger of market distortions that will take a decade or more to repair. If this is how all of the stimulus funding is being handled, our country is sinking deeper into debt for nothing. In fact, the feds are making the situation worse.

1. The NTIA "Switcheroo". Perhaps nothing was more frustrating for me personally than the NTIA, after hours upon hours of workshops and issuing a NOFA rivaling an epic novel, changing their mind and deciding only to fund middle mile projects. At no time during the pre-application process was this preference expressed, and yet it was freely expressed after the fact, when it was too late for applicants to make adjustments. For an administration that preaches transparency, this was, well... not cool.

2. The RUS love affair with Rural ILECs. Imagine you're infatuated with someone. You covet them, imagine your future with them, all that gushy stuff. Then one day they invite you to a party at their house. You're thinking yes! This is it! My big chance! He/she feels the same way! You count the hours until the party, fussing over what to wear, what to say, but confident that your feelings will not be unrequited. The big day comes. You open the door, and there is the object of your desire, on the couch, sucking face with someone else!

If you can empathize with this tale, then you feel my pain. I will spare you the details, but I walked into such a room and got that same kick to the stomach. The unexpected rival? You guessed it, a rural ILEC that has a stellar record of borrowing, and shamelessly wasting, the USDA's money. Dance with who brung ya, right?

The consequences of this RUS-ILEC love affair will be extremely negative. If Round 2 looks anything like Round 1, the agency is hell-bent on giving the whole enchilada to undermanaged companies that are building sickeningly inefficient networks, and have been on the government dole for decades. This will have at least two serious consequences: 1) Less rural Americans will benefit from Recovery Act dollars in the form of a real broadband connection (perhaps by a factor of 10 or more) and 2) the companies that can deliver service more efficiently will be left to battle competitors that, as inefficient as they are, will have built fiber networks in the most densely populated areas they serve, giving them a head-start on key markets.

Make no mistake; wireless technologies will prevail. But the administration's error is the equivalent of Eisenhower rejecting the interstate highway system in favor of more railroads. This President claims emphatically (last nights SOTU being the most recent example) that these Recovery Act "investments" are designed to develop the next generation of innovation. His administration has done the opposite with BIP. By subsidizing inefficient, obsolete networks, they've made true progress a more expensive and distant hope, rather than a near term reality.

3. The "Volunteers". Let us not forget the Volunteers. I love the Volunteers, for two reasons: 1) They are the ultimate, and laughable, symbol of how completely out of their depth our dutiful public servants were, and presumably still are; and 2) They remind me of Ross Perot, which reminds me of Dana Carvey playing Ross Perot on SNL, which makes me smile. However, the secrecy surrounding the Volunteer process only feeds my distrust. Who are they? Who do they work for? Every knowledgeable engineer I know has a marked bias toward one technology or another. Not surprisingly, it's the network they know inside-out. Clearly, the Volunteer pool was short folks who truly understand the power of wireless networks, because almost none of the wireless projects were funded. And how can you possibly evaluate a serious proposal without talking with the applicant? I understand there were thousands of applications, but someone sat down to read them. Why couldn't they host a conference call to discuss the issues of concern?

As Round 1 closes, I am more concerned than ever that this process with harm our industry, which already bears too many scars delivered by the hand of government. One cannot effectively regulate what one cannot understand, and telecommunications has been the poster child for this axiom for quite some time now.

That is not to say the situation is unrecoverable. There is plenty of stimulus money left. It is possible that some good investments that encourage real growth could be made. "Keep hope alive" is my outlook -- remember, I'm only semi-jaded.