Joanne Hovis, President

Yesterday I had the honor of presenting the results of a near-18-month process to the City of Tacoma, Wash., City Council and the Board of Tacoma Public Utilities (TPU). At their direction, I have been working with a City and TPU team to determine a future strategy for Tacoma’s successful and renowned Click! municipal broadband and cable network, which was built in the 1990s and has been instrumental in bringing competition and choice to the Tacoma market—offering, for example, internet service even before the region’s commercial cable network (now owned by Comcast) was internet-capable.

To secure for the coming decades the considerable benefits that Click! has delivered over the past 20 years, the Council and Board directed us to determine how a public-private partnership (P3) for operations of Click! could achieve critical community goals and values—including net neutrality, low-income affordability, privacy, and competition. The Council and Board’s shared vision is to secure these goals through private sector partnership and operations, while the public maintains ownership and control of the underlying communications network.

As the culmination of a significant process of requesting input and qualifications from potential partners, yesterday I presented two negotiated term sheets to the Council and Board. One term sheet is with local ISP Rainier Connect. The other is with a larger, regionally headquartered company, Wave Broadband. In both cases, the term sheets contemplate a partnership of 20 years, which can be renewed twice, each time for 10 years. The length of the relationship gives both sides business certainty—and enables the private partner to make substantial investment commitments.

In my view, both term sheets represent important win-win outcomes for the public and private sectors, and both term sheets meet the Council and Board’s visionary policy goals for the Click! network—including equity, net neutrality, data privacy, low-income affordability, and robust competition.

Importantly, under both term sheets, the private partner will not take ownership of any part of the network, which will remain a public asset. Indeed, the City’s utility will not only retain ownership of the existing network but will also take ownership of all upgrades the partner makes to the network with its own capital over the course of the partnership. And these upgrade obligations are robust—both term sheets contemplate not only that the partner will invest on an ongoing basis, but also hold the partners to a standard for ongoing upgrade to continually meet national or regional standards for broadband service. In the short term, both term sheets guarantee that the partner will upgrade the network to gigabit speeds across its entire footprint within three years.

In addition, under both term sheets, the private partner will make enforceable commitments to respect net neutrality, to respect user privacy, to offer substantially reduced-cost products to low-income members of the community, to meet robust customer service standards, and to offer services and pricing equitably across the entire network footprint.

While both term sheets and potential partners are strong, we recommended to the Council and Board that they proceed with final negotiations with Rainier Connect—based on its substantially higher financial offer and some stronger terms, including a much more robust oversight role for TPU in the event that the partner wants to sell or transfer its rights under the contracts to operate Click!.

The Council and Board now plan a process of public input and deliberation of next steps and the direction they wish to go—which will then lead to detailed and final negotiations for final contracts between TPU and the selected partner.

It’s been my honor to participate in this remarkable 18-month effort, which has had all the hallmarks of the best in public process—openness, competition, deliberation, transparency, and stakeholder engagement. For more on that process and its outcomes to date, yesterday’s presentation is here, the Wave term sheet is here, and the Rainier Connect term sheet is here. We prepared a report that compares the term sheets and their alignment with the Click! policy goals, which is available here. The City and TPU also released a report documenting their stakeholder engagement effort.

Heather Mills, Lead, CTC Funding Strategies Team

The USDA’s Rural Utilities Service last week released the final deadline dates for the upcoming ReConnect grant and loan funding cycles, in which $600 million will be awarded for rural broadband projects.[1] While the final application is not yet available, the new final deadline dates and the program rules (which were released late in December just before the government shutdown) give us a solid indication of how to prepare a grant or loan application and maximize scoring.

For those seeking the highest percentage of grant funding possible, applications for grants of up to 75 percent of eligible project costs will be due on May 31, 2019. For 50 percent grants with a 50 percent loan or other form of match, applications will be due June 21, 2019. And for 100 percent loans, applications will be due July 12, 2019.

The ReConnect program represents the most significant congressional appropriation of broadband funding since the Recovery Act in 2009. Rural communities should consider moving quickly to develop partnerships and strategies for preparing the most competitive possible funding applications.

We emphasize the need for partnerships because RUS has made clear that strong state and local support will be necessary for all applications, including those of the private sector—and that inexperienced or start-up entities are unlikely to be funded. If you are a public entity without extensive experience as an internet service provider (ISP), we recommend that you partner with an experienced public or private ISP to compete for these funds. And any experienced ISP, whether public or private, will require the strong collaboration and support of your local (and state) government to present a compelling case for funding.

As you map out the next three to four months for application preparation, the following are some of the steps we believe are critical to preparing a competitive ReConnect application:

1. 1. Develop a grant strategy. Your goal is to maximize your application’s scoring given USDA’s stated criteria.[2] Every element of your application should speak to those criteria. Start by developing a comprehensive strategy that aligns your approach (with respect to technology, partnerships, business plan, and service levels) with what USDA is seeking to fund.
   2. Gather the many types of information and support materials required. You’ll need a range of data and numbers—such as population statistics—to establish eligibility under the program rules and to provide content for the grant narrative. You’ll also need a wide range of supporting materials, ranging from letters from your governor to documents that demonstrate the support of the local government, prospective customers, and the business community. Our recommendation here is to go over and above; additional letters (such as from your congressional delegation, the Chamber of Commerce, and so on) can only help to demonstrate the breadth of support in the community for your initiative.
   3. Define and refine your proposed funded service area (PFSA). Define the PFSA with a count of the number of rural premises to be connected, including homes, farms, schools, libraries, healthcare facilities, and businesses (which are important because they confer additional points in the application). Then, document the engineering methodology used to demonstrate that the PFSA lacks service and is therefore eligible for funding. You’ll also need to verify that no Connect America Fund II award census blocks are included in the PFSA and that your project area is not located in what is known as a Protected Broadband Borrower Service Area (i.e., the service area of a borrower that has an RUS broadband loan).
   4. Develop and review your project’s engineering plans and cost estimates. The critical engineering task after you have defined the PFSA is to develop a conceptual design for your network—including project plan, buildout timeline, design, and diagram—and cost estimates for materials and construction. The cost estimates will become a critical input to your business plan and pro forma financials and will need to be certified by a licensed Professional Engineer under the RUS rules.
   5. Develop a financial pro forma and business plan. The pro forma is perhaps the most important part of your application—it should be prepared in the format provided by USDA (which will hopefully be available soon) and should include subscriber projections and descriptions of service and pricing. To support the pro forma revenue projections, you’ll need very compelling data, ideally in the form of statistically valid market research, as well as empirical data about your or your partner’s historical success in achieving comparable market share. This is possibly the most critical item in the application, given USDA’s interest in funding projects it considers sustainable and low-risk.
   6. Develop a market narrative, including discussion and data regarding service in the region. You’ll need to demonstrate that your services will be better and no more expensive than other services offered nearby—and present a narrative discussion of why the proposed services will be both marketable and affordable.
   7. Collect the appropriate forms from farms and businesses to demonstrate market interest and maximize points for that application item.[3] This is something that can be done through one-on-one conversations or by mailing the forms (with a cover letter and a stamped return envelope) to all the farms and businesses in the PFSA.
   8. Set up accounts and then navigate Sam.gov and Grants.gov, to be ready to input the grant application into the online grants system. (You may already have accounts in place, but we recommend that you check to be sure the accounts are current and that someone on your team is comfortable navigating the portals.)
   9. Commission the required legal opinion and reviews.
   10. Finally, but just as importantly, write compelling grant and budget narratives. These and other narrative elements of the application are an opportunity to truly make your case for funding.

Please don’t hesitate to contact me if you have questions. CTC’s grant-writing team and I are ready and able to assist with any of these and other tasks.

[1] “Program Overview,” ReConnect Loan and Grant Program, USDA, https://www.usda.gov/reconnect/program-overview. For deadlines and other details, see the Federal Register, https://www.federalregister.gov/documents/2019/02/25/2019-03163/broadband-pilot-program-reconnect-program

[2] “Evaluation Criteria,” ReConnect Loan and Grant Program, USDA, https://www.usda.gov/reconnect/evaluation-criteria

[3] “Broadband Pre-subscription Form for Farms and Other Businesses,” ReConnect Loan and Grant Program, USDA, https://www.rd.usda.gov/files/FarmorBusiness_Pre-subscription_Form_Final.pdf

The Port of Ridgefield, Washington, released an RFI to solicit informal proposals from private sector entities that may have an interest in leasing the Port’s planned 42 miles of dark fiber to make affordable broadband available to businesses, economic development areas, first-responder facilities, anchor institutions, and residences.

The information gleaned from this RFI will help guide the Port’s planning and investment in communications infrastructure, generate favorable terms for public-private collaboration to encourage new investment, and enhance the value of the investment that existing private providers have already made in the Port District. The Port hopes this initiative will support and accelerate private providers’ efforts to improve broadband service options in the District.

Ridgefield is one of the fastest growing cities in Washington. Located on I-5 just north of Vancouver, in the rapidly developing Discovery Corridor, the City more than doubled its population between 2000 and 2010. City officials are preparing for the population to triple in the next 15 years.

The Port District encompasses nearly 57 square miles, including areas to the north and south of the City of Ridgefield. As a municipal economic development organization, the Port has worked with the City of Ridgefield and other cities along the corridor to make key infrastructure investments.

The RFI is available here.

Andrew Afflerbach, PhD, P.E.
CEO & Chief Technology Officer

Like most cities, Boston needs an expanded fiber optic network to serve the fast-growing needs of City schools, police, and other departments—plus a range of applications like public safety cameras.

Boston understood its needs—but needed more clarity on its choices. Would it be possible to affordably lease all the fiber it might need for decades to come? Or should it build its own fiber—expanding the existing City network known as BoNET?

The City took a strategic approach to the issue—choosing to develop a plan to meet City broadband needs and simultaneously accomplish other policy goals, as cost-effectively as possible. To do this, Boston chose a model in which it would use its buying power to incent private sector deployment of massive fiber capabilities. Some of the fiber would go to satisfy City needs, and the balance would then be available to private ISPs for services deeper into the community, for backhaul, and for other uses that will improve broadband outcomes in the City.

To effectuate all this, Boston took the time necessary to work through the options and obtain state and local approvals. And following planning, network design, and a competitive process, the City will now get what it needs under a long-term, $10 million dark fiber lease with Crown Castle. Boston would have needed to spend five times that amount to build its own network, according to Mike Lynch, the City’s director of broadband and cable.

Now all schools, public safety agencies, and other operations throughout the City will get what they need today—plus long-term control of scalability for potential future smart city applications and public Wi-Fi—at an affordable price. The 20-year deal (technically known as an indefeasible right of use, or IRU) includes an option to extend for two additional five-year terms.

Leasing might sound easy. But getting to this point took rigorous research and analysis, engagement with the private sector, engineering, well-crafted RFI and RFP documents, and a careful look at the information and sales pitches the City received.

In 2014 the City issued an RFI and performed extensive due diligence, during which carriers shared data and strategies for collaboration. Based on the data it had collected, the well-informed City decided to use a competitive process to lease dark fiber in the long term. And thanks to a rigorous RFI response analysis, the RFP contained very clear specifications to ensure adequate fiber would serve core network nodes and each site at the network edge; that adequate route diversity would exist; that the network would be able to scale; and that provisions for maintenance and repair would meet Boston’s standards.

Multiple companies responded to the RFP, and three offered citywide solutions: Lightower, Sunesys, and Verizon. The City selected the Sunesys offering, and recently entered into a contract with Crown Castle, which had in the interim acquired Sunesys.

Under the deal, Boston will have end-to-end control of the network for up to 30 years—and the new private sector fiber capabilities will mean not only greater opportunity for private ISPs to extend their networks, but also the efficiencies and reduced disruption of a single major fiber deployment serving multiple users, including both the City and the carrier market. And all this has been accomplished at relatively modest cost, with a significant return to Boston on its investment, both with respect to City broadband needs and to enhancing broadband services more generally.

Shawn Thompson, Principal Engineer

A hundred bucks. That’s what the FCC recently decided is adequate compensation to your locality for processing a small cell application. In many cases, it’s not going to be enough.

And if your actual costs are indeed higher than $100, you will effectively be forced by the new FCC rules to subsidize the telecommunications industry—unless you can build a strong and reasonable case for why your actual, documented costs are higher and should be recovered by your community.

With the January 14 effective date looming for the new FCC order preempting local authority over small cell siting, we recently outlined Ten Strategies that your locality, state agency, or utility can adopt in this newly restrictive environment. We later described how careful processes are your best defense.

We turn now to the question of costs. The FCC set low default wireless facilities siting application fees that localities can charge: $500 for up to five sites; $100 per site thereafter; and recurring fees in the rights-of-way limited to $270 per site per year. But the FCC also allows you to charge a “reasonable approximation” of your “objectively reasonable costs.”

Let’s remember that these technologies will be dotting the landscape for decades, so doing this right is worthwhile. We at CTC have been assisting public agencies and utilities on wireless facilities siting for a long time—long enough to know that the FCC’s numbers are low relative to most actual costs.

So lately we’ve been documenting exactly what “reasonable” looks like. This means sitting down with clients to detail what a proper application and review process consists of, and how long each task consumes in staff time and other expenses. (And no, we aren’t including consulting in the calculation.) We’ve built highly detailed spreadsheets documenting all this. Bottom line: We have found that in some cases a new siting might cost north of $1,500 for a proper review.

To be clear, a proper review entails:

1. Examining an application upon intake for accuracy and completeness of all stated measurements, locations, and supporting documentation.
2. Reviewing the documentation from both the engineering and zoning compliance perspectives (those are two different things).
3. Performing an on-site survey (in some cases) to verify measurements and locations for proposed new or collocated facilities.
4. Circling back to the applicant to flag problems identified in the steps above, then verifying that any changes are accurate.
5. Conducting a post-installation inspection, just like a gas or electrical inspector would do after work is done at your house.

Consider just the first part—reviewing an application upon intake. This should include verification checks that ownership and structure types on applications match local records; that addresses and zones are reported accurately; and that any required documents—such as maps, structural analyses, cut sheets, balloon test results, photo simulations, microwave path studies, and RF maps (depending what is required)—are included and sufficient. Part of this information will be used to determine whether an initial site inspection is required.

Once you carefully look at each task and the time it takes, you can see how the numbers can easily run into several hundred dollars, or even $1,500 for a complex siting case. Fees that range into this territory may be not merely objectively reasonable, but eminently so.

Another approach to ensure full recovery of your costs is to use the competitive bidding process to secure the best price for outsourced soup-to-nuts execution of these processes. A robust competitive process should, by definition, result in the lowest price possible for the effort necessary, and could thus serve as the basis for your cost recovery model. (As with all strategies related to this complex and risky new area, be sure your legal counsel is comfortable with this approach.)

Either way, if you want what’s due, you need to do your due diligence. You would be well advised to define and document your efforts and set application fees that truly recoup your costs. Otherwise, you may be stuck accepting the FCC’s lowball numbers.

Andrew Afflerbach, PhD, P.E.
CEO & Chief Technology Officer

By now you’ve heard of the Federal Communications Commission’s wireless preemption Order—scheduled to take effect in 2019—mandating that wireless companies get low-cost, streamlined access to public property to mount small cell facilities.

We recently outlined Ten Strategies that your locality, state agency, or utility can consider in this newly restrictive environment amid a rollout of millions of new pieces of equipment on public property nationwide in the coming years. But in many ways, it comes back to one thing: process. (Or to borrow from the old real estate maxim, there are three Ps when it comes to small cells: “process, process, process.”)

Your locality or agency should clearly and efficiently state existing processes—and, where necessary, create new ones within the scope of the Order (and subject to the advice of your legal counsel). Utilities will have additional complex technical and management considerations related to placing small cells on electrical utility poles; these details will be discussed in a later blog.

Defining and mapping your processes represents an opportunity to ensure safety, maintain aesthetics, and recoup your costs.

The sooner you adopt a process to manage applications for small cells in the right-of-way, the better. The FCC’s move establishes sharp time limits (often called “shot clocks”) within which applications must be processed: 60 days for installations on existing structures, 90 days for new poles. But the clock pauses if the application is incomplete and you notify the applicant within 10 days. That’s only feasible if you have—you guessed it—a stated process.

In addition, your locality or agency should not have to bear the costs of the application process. While the FCC Order set some limits on fees, it also says you can collect fees that are a “reasonable approximation” of your “actual and reasonable costs.”

You should also assess penalties for safety violations or unauthorized installations. But you can’t do that if there’s no process for detecting the problems in the first place.

CTC has developed a solution. We work with public agencies and their counsel to define, first, a draft of the technical elements of a master lease (or the overall contract under which applications may be filed) and second, an application and review process defining technical and aesthetic requirements, outlining the players and key people responsible, and establishing timeframes and site inspection procedures.

We recommend that you:

Prepare robust agreements and develop a set of wireless and wireline installation standards or a design manual for the uniform, safe, and reliable installation of network nodes, poles, and transmission facilities.

Establish processes and dedicate resources so that the review can be conducted within FCC-mandated timeframes. To adhere to application processing time requirements (and for the sake of efficacy and cost-effectiveness), streamline and closely manage application and related processes.

Implement an electronic application database and site information tracking database. In addition to application information, information related to the sites should also be captured and maintained, and any conflicts at proposed sites flagged. This may also enable application and status information to be made available in real time to the public and to the applicant.

Adopt new application types. These may include four general categories—new, colocation, replacement, and minor modifications—and will dictate the level of application processing required and enable you to deploy staff efficiently.

Centralize application reviews and perform tasks in parallel where possible. This will help reduce processing times, ensure consistency, minimize staff time, and improve service.

Develop complete checklists for application fields and step-by-step review processes.

Implement pre-installation site inspections. Site inspections before construction enable you to check whether the installation would be in accord with technical and aesthetic requirements—and whether the new infrastructure could be modified, concealed, or moved to a nearby structure to mitigate impacts.

Create a post-installation inspection procedure. Comparing proposed construction drawings with the actual structure and inspecting the restoration of the area will force deployments to match approved designs and mitigate safety and other violations.

Determine your “reasonable costs.” Your work to review small cell applications may be far costlier than the FCC admits, and you should define and document that effort to support your application fees. For some clients, CTC is conducting detailed breakdowns of exactly how much staff time it takes—and thus how much it costs—to do everything from reviewing applications to inspecting the as-built project.

Implement a process to handle contract breaches, standards violations, and safety violation. You must be able to manage the claims, provide self-help remedies to the vendors, and establish conflict resolution procedures.

Collect and analyze metrics related to application processing (e.g., average time spent at a “stop” in the process) to identify trends and potential process improvements.

And if you are a locality with a municipal electric utility, you should work with your utility leaders to define and understand your respective roles, develop consistent processes, and conduct coordinated reviews with clear handoff steps.

Set to become effective on January 14, 2019, the Federal Communications Commission’s new wireless preemption Order[1] has states, localities, and publicly owned utilities rightly alarmed about encroachment on local authority and about forced federal requirements that put at risk the primary purpose of many public assets. In short, the FCC has preempted state and local authority and mandated that wireless companies shall have low-cost, streamlined access to state- and locally owned public property to mount small cell facilities.[2]

The impacts of the Order promise to be enormous and complex, and we recommend that you consult expert legal counsel to fully understand what it will mean for your locality, utility, or agency. Some localities have asked the FCC to reconsider its Order and many other localities have filed, or will soon file, appeals of the Order—alleging, among other things, that the FCC lacks authority to preempt state and local management of public rights-of-way and facilities. However these actions may turn out, we recommend that you promptly undertake a robust technical analysis to ensure that you have in place technical standards and requirements to protect your rights-of-way, light poles, utility poles, and other property to the greatest degree possible under the Order.

In many states and localities, rights-of-way construction and wireless installation take place with many informal, unstated rules that assume that common sense, good will, and best industry practices will prevail. But the Order puts at risk any public sector property owner that relies on informal practices and mutual goodwill with the industry. While many wireless applicants work in good faith and make efforts to maintain a good relationship with the community or utility, relying on an informal or ad hoc approach could mean reduced control over your own assets. You will be better served to have clear, structured, and complete written standards, even if informality may have worked in the past.

The following are some strategies and tactics that you may want to consider so as to protect your assets and their critical missions, subject to the guidance of your legal counsel:

1. Develop standards for attachments that protect your assets’ long-term durability and prioritize their primary use.

Industry rhetoric about placement of small cells on public assets frequently fails to acknowledge the primary, mission-critical purpose of those assets. It falls to asset owners to protect that primary use by ensuring that wireless attachments will not interfere with or compromise the function of the mounting asset.

In developing such standards be sure to include all stakeholders within the government to ensure a clear and comprehensive understanding throughout all departments and agencies of the needs, objectives, and processes being developed. Your standards for attachments, whether set forth in a local ordinance, a published technical standard, or an attachment agreement, should therefore clearly frame limitations in terms of protecting the assets and their mission-critical purpose. These standards can apply in the case of traffic signals and light poles, utility poles, and the right-of-way itself:

Traffic signals and light poles: In the case of traffic signals or light poles, standards should clearly describe how much space is available for wireless communications use and where attachments are allowed on the structure. The standards should state what type of structural analysis needs to be done by the applicant. They should also define the circumstances under which the structure needs to be replaced to support the new communications use so as to protect the primary use.

Technical standards should define how large wireless equipment can be and where it can be located with respect to the traffic infrastructure. The standards should also specify how installation and maintenance will be performed in a manner that minimizes disruption to traffic and the public.

Similarly, you may want to develop defensible standards that would limit the size of equipment boxes and other elements of a wireless attachment that can shorten the useful life of your asset or create aesthetic, safety, or other problems.

Utility poles: In the case of a utility pole owned and/or controlled by a municipal utility, standards should include many of the same items as for traffic signals and light poles. In addition, the standards should state how the wireless structure should be placed in order not to interfere with the operation of the utility and other attaching entities.

Safety is critically important, especially when considering how the attachment will interact with the utility use. As with traffic signals, there should be standards that define how installation and maintenance will be performed in a manner that ensures the safety, security, and reliability of the utility facilities and services, and that minimizes disruption to utility workers, traffic, and the public.

Clear procedures should be developed to allow the utility to shut off the wireless equipment to protect utility workers who would otherwise be exposed to radio frequency (RF) emissions when on the poles. Similarly, standards for warning signs can be established so as to ensure utility workers are alerted about exposure to RF radiation.

Rights-of-way: Rights-of-way standards for small cell facilities placement should make clear whether construction methods (e.g., directional boring, hand digging, micro-trenching) are prohibited or required in particular areas; what is required in terms of restoration of sidewalks, roads, and parkways; and anything that is required to protect public or private property.

2. Conduct a legal “red flag” review.

Work with counsel to survey the legal landscape; review local and state law relating to zoning, tower ordinances, right-of-way management, local franchising, and telecommunications regulation to determine what, if any, immediate action may be needed (for example, a definitional conflict with existing macro-cell ordinances); and to understand the boundaries within which you and the small cell provider must act.

3. Develop attachment agreements.

It is vitally important to recognize that there is a difference between access to the public rights-of-way and access to government-owned structures, such as streetlight poles and utility poles that are located within the public rights-of-way. All wireless providers and infrastructure providers must obtain written authorization not just to occupy public rights-of-way, but also to attach their facilities to municipal poles and other structures. Local governments need to develop pole attachment agreements governing access to municipal facilities.

4. Publish a thorough and complete technical manual, and/or provide a one-stop online resource.

Ideally all technical standards and processes should be available in a single document, and standards and process-related content should be available at a single online location.

5. Generate detailed application forms.

Applications for wireless facility siting in the rights-of-way and on particular municipally owned poles or structures should clearly identify and request all information reasonably required to enable a timely review; specify the size and format of required drawings; and note the required format for map coordinates, electronic files, and other elements of the application.

The application should also state the qualifications required for the individuals who develop the design submittal, structural analysis, and other key components of the application (such as a Professional Engineer license).

To facilitate a quick and thorough initial review of the submittal, the application should include a clear checklist to enable the reviewer to scan for completeness. This will enable a reviewer to immediately recognize whether information is missing—thus increasing the likelihood that the review can be completed within the stringent FCC-mandated shot clocks.

6. Make the entire application submittal and review process electronic.

Electronic submission and review streamlines the process for applicants (and eliminates one of their areas of continuous complaint). It will also improve your ability not just to review the application but also to track and report on the status of applications to the applicant and the public as needed.

7. Develop a bottom-up analysis of the time and resources needed to perform the steps involved in the application process.

The level of effort required to review applications may vary with the technical complexity of the application (e.g., minor modification, colocation, new structure), and the review time will change if you receive multiple applications at once. Be sure to include the time needed to receive input from and respond to the public, and to obtain corrections of erroneous and incomplete applications. These insights will be the basis for your efforts to streamline the process, to prepare for and handle a potentially large number of applications (potentially with the addition of reviewers and inspectors as needed), and to justify cost recovery.

8. Prepare cost studies to ensure you can justify application and rental fees.

The Order limits assessment of fees for the initial application, the ongoing rental of attachment space, and the use of the rights-of-way to a “reasonable approximation” of the government entity’s “objectively reasonable costs” associated with the deployment in question, and applied in a nondiscriminatory manner.[3] Notably, the Order provides no guidance on how costs should be calculated. The Order goes on to specify certain presumptively reasonable fees for (1) one-time applications and (2) annual access to public-rights-of-way and facilities (combined). The Order leaves room for higher fees if they are justified by reasonable costs, and it also leaves room for attachers to challenge the presumptive levels as exceeding costs.

The courts will ultimately determine whether the FCC has authority to limit state and local governments to cost-based fees. In the meanwhile, we suggest that you have ample good reasons to undertake rigorous and methodical cost studies that will enable you to understand your true costs and to defend your pricing decisions.

Undertake a cost analysis related to your application fee, so as to document the full range of expenses incurred for reviewing an application. If your actual costs, including staff time, exceed the FCC’s fees, such a study may protect you in the event you are challenged for assessing higher fees than the presumptively reasonable fees specified in the Order. While much remains to be understood about the Order and its limitations, reasonable application review costs might include:

• IT investments to enable online applications
• Review of applications for completeness, technical suitability, and compliance with standards
• Field inspections before and after construction
• Administration of a public notification process

Undertake a cost analysis related to your ongoing attachment or rental fee, so as to document the expenses you incur to maintain and support the asset on which the wireless equipment is mounted. To determine ongoing fees, reasonable costs to consider might include:

• The attacher’s share of maintenance, repair, and replacement specific to the particular mounting asset
• Lost opportunity or revenue because you are forced to forego the use of the pole or space for other purposes
• IT investments to track and manage attachment data

9. Develop a plan to reserve space on your assets to meet your needs and the needs of other public sector users.

One of our main concerns about the Order is that it may effectively give wireless companies forced access to public assets, regardless of the existing or anticipated needs of the public asset owner. If this is the case, you may have less access to your own assets for the core government and utility functions for which the facilities were erected—as well as for future wireless attachments to meet your Internet of Things, Smart Communities, public safety, and other needs—in light of the fact that light poles and utility poles typically cannot hold more than one small cell attachment.

For this reason, we recommend you evaluate and document the existing and future public sector need for use of your assets. The resulting plan should demonstrate why and how it is necessary to reserve some of those assets for future public sector use. Such a plan could be instrumental in enabling you to keep private deployers off the assets you will need to meet public sector uses in the future.

10. Establish or update and publish aesthetic standards for attachments.

In the Order, the FCC claims that “providers…densify their networks with new small cell deployments that have antennas often no larger than a small backpack.”[4] The image of a small cell attachment as a “small backpack” (or, as the industry likes to say, a “pizza box”) ignores the actual size and visual impact of the related cabling and equipment boxes, which can be dozens of times larger than the antenna itself. In fact, the Order itself defines a “Small Wireless Facility” as one that has an antenna occupying no more than 3 cubic feet and support facilities collectively occupying no more than 28 cubic feet.

That said, the Order goes on to note that “aesthetics requirements are not preempted if they are (1) reasonable, (2) no more burdensome than those applied to other types of infrastructure deployments, and (3) objective and published in advance.”[5]

Given this framework, we recommend making sure your aesthetic standards are clearly defined and published, and compliant with your counsel’s interpretation of the Order. Most public sector review processes already include aesthetic considerations; these should now be reviewed, updated, and published in light of the Order. In our experience, aesthetic standards may include requirements or guidance for:

• Size of antennas, equipment boxes, and cabling
• Painting of attachments to match mounting structures
• Use of shrouds, stealth techniques, or other camouflage
• Flush-mounting of antennas
• Placement of equipment in the pole base rather than on the outside of the pole
• Consistency with the character of historic neighborhoods
• Minimum spacing between attachments

If an applicant seeks to place a device in a residential neighborhood, aesthetic standards for the community should clearly state any minimum setback from dwellings, parks, or playgrounds; maximum structure heights; or limitations on the use of small, decorative structures as mounting locations.

Consult your legal counsel for full analysis and a timeline for how long the FCC will allow for public entities to publish aesthetic standards.[6]

In sum, the bad news in this Order for public entities is clear: Your control and influence over your own assets (and the primary purpose of those assets) has been greatly diminished. Indeed, the FCC Order ensures that failure to prepare will virtually eliminate any remaining control over the assets you may have.

But you can exert some level of control over this process and protect your assets and their mission-critical primary purposes. To do this, we recommend you undertake significant technical and legal planning to ensure that you have in place reasonable standards and efficient processes that best serve your interests.

CTC Technology & Energy
Baller Stokes & Lide

[1] In the Matter of Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Investment, Declaratory Ruling and Third Report and Order, WT Docket No. 17-79, WC Docket No. 17-84, 2018 WL 4678555, (rel. September 27, 2018) (“Order”) (available online: https://docs.fcc.gov/public/attachments/FCC-18-133A1.pdf).

[2] In addition, in the past two years, several states have enacted their own measures to address siting of small cell wireless facilities, and it is likely that more states will consider doing so in 2019. The FCC indicated in its Order that state provisions imposing more demanding standards than the FCC’s will prevail over the FCC’s standards and the FCC’s standards will override less demanding state standards.

[3] Order, ¶ 50.

[4] Order, ¶ 3.

[5] Order, ¶ 86.

[6] The FCC noted in the Order that it expects localities to publish their aesthetic standards within 180 days of publication of the Order in the Federal Register. (Order, ¶ 89.)

CTC’s Chief Technology Officer, Andrew Afflerbach, Ph.D., P.E., was appointed to the Disaster Response and Recovery Working Group of the FCC’s Broadband Deployment Advisory Committee (BDAC). The FCC’s announcement notes that “the Working Group is charged with recommending measures that can be taken to improve the resiliency of broadband infrastructure before a disaster occurs, as well as actions that can be taken to more quickly restore broadband infrastructure following a disaster.”

Joanne Hovis, President
Heather Mills, Funding Strategies Team Lead

Earlier this year, Congress made the first major appropriation for broadband infrastructure deployment in a decade. The following is our preliminary high-level analysis and strategic guidance for counties, towns, states, and public utilities regarding that funding—the e-Connectivity Pilot—a U.S Department of Agriculture program that will fund last-mile broadband infrastructure deployment in rural areas.[1]

In short, we anticipate that substantial funding for last-mile rural broadband will be made available early in 2019, and that experienced public ISPs, as well as collaborative public-private efforts, will be well positioned to compete for these funds.

USDA has not yet released the detailed rules for the program, so most of what we know about the e-Connectivity Pilot is very preliminary and based on RUS’s public statements and its track record with other broadband programs.

If you are considering applying for the new funding, the time to prepare is now, in anticipation of an application deadline in early 2019. We recommend you work now to build the necessary partnerships and develop the business and technical models you will need for an application. You should also develop key documents that are likely to serve as essential components of the grant application, including an assessment of existing service, an engineering plan, a cost estimate, and a long-term business plan that demonstrates financial viability.

Realistically, any application will face considerable competition and long odds, simply because of the large number of applications that will likely be submitted. At the same time, the new program represents a potential opportunity that could enable not just last-mile service, but also important economic and community development. An additional benefit is that the planning you do now will put you in position to apply for other programs as well. For example, the annual window is likely to open early next year for USDA’s excellent Community Connect program, a long-time and successful program that awards modest grants for deployment of rural last-mile broadband. Much of the work you do now to prepare for an e-Connectivity Pilot application will be useful for that program, both in 2019 and in subsequent years.

The following is our preliminary analysis of the e-Connectivity Pilot opportunity.

What Types of Funding Are Likely to Be Available?

The new program is in development at the USDA’s Rural Utilities Service (RUS) and will consist of broadband deployment grants and loans. The funds were appropriated by the Consolidated Appropriations Act of 2018 (known colloquially as “the Omnibus”) and include a total appropriation of $600 million for the program.[2] Some of the funding will likely be used by USDA to secure loan authority for a larger amount—meaning that the combined loan-grant awards could well exceed $600 million and may approach a total of $1 billion. That said, at a recent broadband conference, Acting RUS Administrator Christopher McLean suggested that many of the awards will be weighted toward grants, in recognition that the challenging economics of rural broadband can be shifted more effectively through capital grants than through loans.

What Are the Eligibility Requirements?

The e-Connectivity Pilot targets unserved or largely underserved rural areas. Congress directed in the legislation that, to be eligible, a service area must meet these criteria:

• Broadband service eligibility: At least 90 percent of the households lack sufficient access to broadband service that delivers at least 10 Mbps (downstream)/1 Mbps (upstream) speeds.[3] Intriguingly, Acting RUS Administrator McLean recently suggested that RUS is considering whether affordability will be part of RUS’s definition of service eligibility; in other words, the agency is considering whether 10/1 service that is unaffordable should still qualify as “sufficient access.” Full details on how RUS defines this criterion will be available only once the rules are released.
• Geographic eligibility: The service area must be rural, which would mean a community of 20,000 or fewer residents, per Acting RUS Administrator McLean.
• RUS overbuilding eligibility: No other RUS loan recipient may be offering service in the area.[4]

We note that RUS has historically been extremely rigorous in verifying that the areas for which an applicant seeks funding actually meet the criteria for unserved and underserved residents. Beyond reviewing data provided with an application (e.g., FCC Form 477 data), RUS has been known to perform field testing in an applicant’s proposed service area to ensure that the available service levels do not exceed the program’s requirements. As a result, it will be very important to carefully and thoughtfully define the service area for which you seek funding.

What Is the Likely Timeline?

Minimal RUS guidance currently exists for the program. We understand that once the rules are released and an application window is posted (which we assume will happen relatively early in 2019 or, less likely, late in 2018) applicants likely will have 60 or 90 days to apply for the program.

What Kinds of Applicants Are Likely to Be Successful?

Generally, we anticipate that RUS will prioritize experienced applicants and public-private collaborations; in its public statements on the program, USDA has clearly stated that it hopes to “catalyze private investment” and “leverage federal funds to increase private investment in broadband.”[5] RUS will almost certainly consider public (or private) providers without extensive experience to be startups and will disfavor them.

Acting Administrator McLean has also stated publicly that RUS is likely to encourage “unique partnerships” and will look for applications that are clearly supported by the local community.

Given all these factors, we encourage localities and other public entities that are not themselves experienced ISPs to build relationships with experienced providers, either public or private, to work toward a competitive collaboration for funding. And we suggest that provider applicants work closely with their local communities to demonstrate considerable local support for their plans, as a means of demonstrating to RUS that the plan is viable and grounded in local needs.

What Size Awards Are Likely to Be Made?

Our educated guess is that USDA will make grant/loan combinations in the $3 million to $10 million range. This is quite a bit more than Community Connect grants, which are annual grants in the $1 to $3 million range awarded by RUS to unserved areas. The funding pool is also considerably larger in total dollars than Community Connect. In addition, the new program may not have the low-income scoring criteria of Community Connect, making it a more flexible program.

How Can Potential Applicants Prepare Now?

RUS has not yet released the detailed rules for the program, so most of what we know about the e-Connectivity Pilot is based on the statutory language, RUS’s track record with other broadband programs, and our sense of how things are done at RUS (particularly with the earlier Broadband Initiatives Program). Other than the framework provided by the statue, all of the program’s detailed requirements will be subject to RUS’s rules—including the specific technologies RUS prefers (if any); minimum service speeds; minimum number of premises served;[6] scoring prioritization for certain kinds of entities, service speeds, and network capacity; and requirements for applicants’ financial documentation.

That said, there is considerable preparatory work that you can start now if you are interested in pursuing this opportunity—because once the rules are released, likely in early 2019, you will have a relatively short time to prepare an extensive application. Among the tasks to begin undertaking now are the following:

• Define the proposed service area. It will be critical to provide documentary evidence of the fact that the area is unserved under the statutory definition. The 90 percent unserved metric will be difficult to meet because many areas have uneven service; you must carefully draw a service area boundary that captures the most underserved residents. To that end, there exist analytical technical tools for identifying the reach of DSL and mobile broadband services, as well as for documenting actual pricing (in order to demonstrate that services may be “available” but are not actually accessible to many members of the community because of cost). Quantifying and qualifying the service level in your proposed service area will be essential; it will be a wasted effort for you to file an otherwise excellent application, only to be disqualified by RUS because there is a higher level of service available.
• Develop a business plan. Applications to this program will require a detailed business plan and pro forma. We anticipate that business planning will require robust, reliable, and non-speculative revenue projections, and a show of expected profitability within a relatively modest period of time. RUS is famously (and appropriately) conservative about making loans and awarding grants; it seeks viable, sustainable business plans and is deeply skeptical about more speculative or incomplete business models.
• Develop a technical plan. Applications to this program will require a network design with sufficient detail to ensure delivery of specified speeds to the target population. The network design will also enable cost estimation, which will be a critical element of the network financial analysis and application for funding.
• Identify potential private partners. As mentioned above, we anticipate that applications from experienced private ISPs and public-private collaborations will be more competitive than those from public sector entities that are not already experienced ISPs. Given that, public applicants that do not already serve as broadband providers will be more likely to succeed if they collaborate with an experienced private (or public) partner. In this scenario, the public entity can either provide significant support for a collaborative application to RUS with its experienced partner—or can be a co-applicant with a focus on building out infrastructure while its ISP partner provides service. Now is the time to develop those partnerships, either through informal discussions or formal competitive processes.

Preliminary Checklist for Planning an e-Connectivity Application

We recommend considering the following issues now in preparation for filing a competitive application next year:

1. Geographic eligibility: Are you rural under the statutory definition?
2. Broadband eligibility: Are you eligible for funding based on the existing broadband service in your area?
3. Organizational strength: Are you an existing, proven service provider (either public or private)—or are you partnered with one?
4. Technical plan: Do you have a fleshed-out design and cost estimate for your network, with a demonstrated capability to provide robust broadband speeds?
5. Business plan: Do you have a sustainable business model with strong evidence of the viability of your planned network? Does the business plan include a robust pro forma with reasonable and grounded revenue projections?
6. Community support: Can you demonstrate, through letters and other forms of approval, widespread support from local interests, including public entities, businesses, and representatives of the business community (such as the local Chamber of Commerce), major employers, and residents?

[1] “Broadband e-Connectivity Pilot Program: A Notice by the Rural Utilities Service,” Federal Register, July 27, 2018, https://www.federalregister.gov/documents/2018/07/27/2018-16014/broadband-e-connectivity-pilot-program (accessed October 2018).

[2] “H.R. 1625 – 115^th Congress (2017-2018): Consolidated Appropriations Act, 2018,” U.S. Congress, https://www.congress.gov/115/bills/hr1625/BILLS-115hr1625enr.pdf (accessed October 2018).

[3] “H.R. 1625 – 115^th Congress (2017-2018): Consolidated Appropriations Act, 2018,” Title VII, Sec. 779.

[4] “H.R. 1625 – 115^th Congress (2017-2018): Consolidated Appropriations Act, 2018,” Title VII, Sec. 779.

[5] “USDA Invites Comments on the Implementation of the e-Connectivity Pilot Program,” Press Release, USDA, July 27, 2018, https://www.usda.gov/media/press-releases/2018/07/27/usda-invites-comments-implementation-e-connectivity-pilot-program (accessed October 2018).

[6] USDA has noted its intent to use this funding to enable “broadband services for as many rural American homes, businesses, farms, schools and health care facilities as possible.” (“USDA Invites Comments on the Implementation of the e-Connectivity Pilot Program.”)

Andrew Afflerbach, PhD, P.E.
CEO & Chief Technology Officer

Future public safety operations will rely on advanced mobile broadband networks featuring priority or even preemptive use of available bandwidth, the use of video to enable situational awareness, and a high degree of security.

To ensure they have the network functionality they need—including access to evolving applications—police, fire, and other public safety agencies at the state and local levels face important procurement, policy, and cost decisions. These include choosing carriers and independently verifying and comparing performance levels.

In addition to other service choices, AT&T is starting to approach public safety agencies to offer the company’s services over the Nationwide Public Safety Broadband Network (NPSBN).

The NPSBN is a next-generation public safety network conceived after the terrorist attacks of Sept. 11, 2001 exposed serious communications problems. For years, public safety stakeholders and others have been deeply involved in trying to solve these problems. In 2012, Congress created a federal organization called FirstNet and tasked it with creating the NPSBN. AT&T won the contract to build the network.

All 50 states and the District of Columbia “opted in” or accepted AT&T’s plan for deployment and operation. (You can read my recent posting about FirstNet—and how localities can plan for the new radio towers and small cell radio equipment installations—here.)

However, the adoption of FirstNet is not required by the federal government. Other major carriers are also offering services with similar capabilities, giving state and local public safety agencies a choice. We cannot yet say whether FirstNet is the best technical solution, or the best solution for all first responders.

It is now up to public safety agencies to decide whether the value of FirstNet is worth the transition. Here are some major considerations:

• Understand the impact of using FirstNet and develop relevant policy

AT&T is offering discounts on equipment, but public safety users should think about other factors. One is an analysis of what all these changes—in both the dispatch center and in emergency vehicles—would cost, as well as what operational and management changes would be required. CTC has deep experience in performing these kinds of analyses. As one example, for the District of Columbia, we assessed the wireless communications needs of all public safety departments and agencies. And we are working with the State of Delaware to define policy for broadband interoperability (including LMR/LTE communications), data sharing, and application selection and use.

• Independently review performance

You may want to investigate how well a carrier is serving all areas of your jurisdiction. Public safety agencies—perhaps in concert with jurisdictions or other state agencies—have every reason to undertake an independent analysis of any network they are considering using. Certain grant funds are available to check the performance of AT&T’s NPSBN deployment in particular.

CTC has been engaged by the State of Delaware to conduct such analyses. To do so, we start with commercially available “crowdsourced” data gleaned from consumer mobile devices. We then perform independent field tests in areas where coverage is weak, analyze the implications for public safety operations, and make recommendations for addressing the gaps.

AT&T is required to make commitments about coverage as part of its FirstNet contract. Still, public safety jurisdictions may want to independently monitor AT&T’s performance as it progresses, conduct a detailed comparison of its performance against that of other carriers, and conduct ongoing testing on various gap areas to assess progress.

Alternatively, jurisdictions may want to work with their states on such an effort.

• Understand your service agreement

Take the time to understand all features of your agreements with carriers and, in the case of AT&T, of its performance contract with FirstNet. Current and emerging areas of concern include guarantees on performance of devices and network resilience during emergencies, operator responsiveness to faults, provision of additional capacity such as truck- or drone-based mobile network devices for service at large events and incidents, access to public safety applications, and service to fixed devices as well as mobile ones.

• Ensure application interoperability

Keep in mind that the driver of the FirstNet effort was the communications chaos of Sept. 11, 2001. Great progress has been made on interoperability since 9/11. But now, as applications are becoming central to first responder operations, it’s important that these applications be truly interoperable. We must avoid creating “silos” that set the stage for future problems.

• Protect citizen network use

Public safety networks give first responders priority access to networks, and even block or preempt consumer use if necessary. But public safety officials need to be sure that network preemption for public safety won’t inadvertently put private citizens at risk if those citizens can’t call for emergency help when needed.