February 2010 Archives

I just read this story over on the Hillicon Valley blog about NTIA rejecting Sen. Reid's request that they extend the application deadline for the second round of the stimulus.

I'm now going to attempt to express my feelings about NTIA's dismissal of this idea without swearing. Wish me luck.

To cut right to the chase, I can't help but read NTIA's response to Reid's request as them basically saying that they think saving their own behinds is more important than serving the interests of the American people.

They claim that they can't extend the deadline because they can't afford more delays given the Sept 30th drop-dead date to get money out the door. Well that's unpack that a bit.

For starters, who's fault were all the initial delays? They say they can't afford any more delays as if something outside of their control created those delays, when really they were all self-inflicted. Now because of their mistakes they're punishing hard-working applicants by being rigid with an arbitrary deadline. This is especially egregious given how long they've made us all wait for them at every step of the process.

It's like trying to work with your boss on a project where you're killing yourself and yet you can't get your boss to engage, help out, or provide guidance, then when the deadline nears they start freaking out and taking it out on you by making you work through the weekend so they don't end up looking bad.

Second, if you have the head of the Senate asking you to do something, I don't see how you can respond by saying that you can't because of a law. Isn't it within Sen. Reid's power to explore legislative options to remove that pressure? Why wouldn't NTIA respond instead by saying, "Look, we'd love to extend the deadline but we can't because of the Sept 30th drop-dead date. But if Congress really thinks this is important to give applicants more time than they need to give us at least another month so we can make sure we don't rush our decision making."

This would be like a bad teacher forcing their students to study like crazy for a test then being approached by their principal suggesting there isn't enough time to study right. But even though the principal has the ability to extend that timeline, the teacher is instead too focused on forcing their students to study to try and change the situation for the better.

They apparently (I say apparently as I haven't found the full text of their letter) conclude their remarks with the following statement:

"The information being made available provides adequate information for Round 2 applicants about possible overlaps with Round 1 grants. Accordingly, NTIA denies the pending extension requests."

My first response is that this is patently false. How can NTIA provide adequate coverage information to Round 2 applicants when they haven't even announced all of the Round 1 winners yet? Admittedly this is a relatively small number of projects covering a small amount of area, but if anything that makes it worse as it means they're disadvantaging some applicants and potentially rendering all their work applying worthless if they happen to overlap with a project that does get funded.

Back to the bad teacher analogy, it'd be like giving a test to students in stages, where some students get theirs first and have more time than others, and yet the teacher is saying everything's fine as the times were close enough. On top of this, it's likely that in this case the teacher gave out the tests to the worst students first as they were the ones most obviously not cut out for the first round, whereas they're disadvantaging the best students who were in the review process the longest.

But even worse than this to me is how tone deaf NTIA is to the needs of applicants. It's not just a matter of overlapping service areas, it's about how can Round 1 applicants improve their applications in the second round? NTIA claims they should look at what kinds of projects got funded, and yet we know so little about those projects, at best nothing more than a 2-3 page high level executive summary, and in some cases not even that. We have no idea how the winners scored, how they were specifically structured, and what caused NTIA to pick them over another project.

Then in the form rejection letters that NTIA's been sending out they've had the audacity to strongly encourage rejected applicants to reapply for the second round, and that seems like some kind of a cruel joke.

It's like applicants took NTIA out on a big, fancy date where they had to pay for everything, yet afterward NTIA went home with someone else for no apparent reason, but then had the audacity to send an email three months later encouraging the applicant to ask them out again.

To review, NTIA's been like a bad boss, a bad teacher, and a bad boyfriend all rolled into one. And like those analogies, NTIA refuses to be self critical, to actually consider that maybe it's wrong, and that maybe all the people complaining about their actions are right.

That said, I don't think that the people at NTIA are no good. I think they mean well and want to do right by their country. But then the only logical justification I can imagine for their actions is that they're more worried about not looking bad by missing the Sept. 30th deadline than they are about doing their best to serve America.

What they should be doing is instead of denying these concerns, they should embrace them. They should treat them as legitimate and open a dialog with all interested parties about how best to proceed forward.

Because otherwise it looks from the outside like what's more important to them is doing the stimulus quickly than doing it right, but they need to realize that the opportunity to do it quickly has already passed.

And it's because of this that I can't help but wonder why NTIA hates America. Because if it didn't, if it loved America, it would care about doing the stimulus right over everything else. But as it stands right now, that doesn't appear to be the case.

Last week FCC Chairman Julius Genachowski unveiled his "100 Squared" initiative, which sets the goal of America having 100 million households connected to 100Mbps by 2020.

But what does that goal really mean?

Is that 100Mbps symmetrical, with as much capacity to upload as download?

Is that 100Mbps advertised or do providers need to be able to actually deliver it?

Is that a 100Mbps monopoly or a market where consumers have choice?

The answers to these questions define the scope of this initiative's ambitions. They also frame the need for and appropriate structure of any government intervention to help move the market forward.

According to the cable industry, they're already well on their way to offering 100Mbps+ broadband to 95% of America. So if the 100Mbps of "100 Squared" need only be asymmetric and advertised, then the FCC doesn't have to lift a finger to achieve what at first blush sounded like an attempt at an aspirational goal.

On the other hand, if Chairman Genachowski wants to deliver a real "100 Squared" where the 100Mbps is symmetric, so users can contribute as much as they consume, and actual, so users get what they pay for, the only technology today that can reliably and affordably deliver that is fiber to the home. Therefore if a real 100Mbps is the goal, policymaking moving forward should focus on how to incentivize fiber deployment.

Then there's the little matter of competition. Even if the 100Mbps that America aspires to is only asymmetric and advertised, there are no guarantees that DSL will ever be able to deliver 100Mbps to every home in an operator's service area, especially the further away a home is from the central office. And wireless is not a serious competitor at speeds 100Mbps and above.

Because of this, the only way there can be facilities-based competition at 100Mbps is if a new fiber pipe is run alongside the upgraded cable networks. Without fiber, our 100Mbps Nation will mean we've created a cable monopoly.

The question then becomes, will the incumbent telephone companies respond to cable's investment with an exponentially larger investment of their own to upgrade all of their networks to fiber so they can remain competitive?

Already we know Qwest's answer: "100Mbps is a dream. We couldn't afford it," said Qwest CEO Edward Mueller to Reuters.

So Qwest's 14-state footprint will largely be left with a 100Mbps cable monopoly without some new entrant picking up Qwest's slack.

While AT&T; has not said it is incapable of achieving this goal, it also hasn't supported it as a goal worth regulating to strive for, leaving the 100Mbps fate of its tens of millions of wireline customers up in the air.

Of the major telephone companies only Verizon has expressed support for a 100Mbps future as their FiOS full fiber network can already support 100Mbps today.

What this all means is that without a proactive approach to spurring the deployment of full fiber networks, upwards of two thirds of America is at risk of having "100 Squared" mean a 100Mbps cable monopoly.

The $64,000 question in all of this uncertainty is how will the FCC back up their Chairman's promise in the national broadband plan? Will they decide that asymmetric, advertised 100Mbps monopolies are good enough and that the market will take care of that on their own? Or will they set the goal of providing Americans with symmetric, actual, and competitive 100Mbps connections?

Assuming they pick the latter (which I and many others sincerely hope they do), the challenge becomes figuring out how to quickly and cost effectively spur full fiber deployment, either by incumbent or new entrants.

There are also many related problems that must be solved, like how do can we decrease the cost of backhaul enough so that 100Mbps service can actually be affordable to consumers? And if the government decides to subsidize 100Mbps deployment, how do we decide who deserves taxpayer support?

But these all have solutions, and what matters most is that we finally have an FCC Chairman who believes America should lead and not lag the world in broadband connectivity, and who realizes what order of magnitude that means our goals need to be set at.

And now within that context, we have the opportunity to focus on figuring out how to spur fiber deployment so that America can achieve a 100Mbps future that's symmetric, actual, and competitive. Because without fiber, the potential of our 100Mbps future will be limited to asymmetric and uneven, advertised but not realized, and communities stuck in perpetual monopolies.

So now I pose the question back to Chairman Genachowski, "What does '100 Squared' really mean to you?"

After being so fed up with the broadband stimulus it sometimes hurts, I've decided it's time to start taking some action to rectify what I and many others see as a failing program.

As a first step in this process I've created a petition demanding that NTIA and RUS give the public our broadband stimulus data.

More specifically the petition demands two actions:

1. That NTIA/RUS make public the scores of all projects they've awarded funding.

2. That NTIA/RUS give back the scores privately to all applicants.

The former of these is so we can make sure the selection process is working. The latter is so that first round applicants can know how they can improve for the second round.

If NTIA and RUS have a legitimate excuse as to why they're keeping this data behind closed doors, I'm all ears to hear it as I want to see them succeed as much as anyone.

But in lieu of that the simple reality is that this is our data. We paid for it with our tax dollars, so we have the right to this data.

If you support the need for doing this, please add your name to this petition.

By uniting our voices of discontent we can make our argument stronger and push together to make change happen.

One year ago today, Congress passed the ARRA, appropriating $7.2 billion to NTIA and RUS to stimulate broadband deployment across America.

So how have they done so far? What have they gotten done in a year's time?

Let's pull out the grading card to gauge the stimulus at its mid-term.

The grading criteria will be how well they've done against the following questions:

- How many jobs has the stimulus created?
- How much deployment has been stimulated?
- How quickly has the stimulus worked?
- Are they picking the best projects?
- How have they handled applicants?
- How transparent has the process been?
- How well have they learned from the first round?

Note that I'm grading NTIA and RUS collectively as at least on the surface they've performed similarly.

Jobs - D
The stimulus has not created any deployment jobs to date. In fact one could argue that it actually destroyed jobs as many projects put the brakes on waiting to see if they could get free government money. The stimulus has created some work, but it's primarily been for consultants and lawyers helping applicants navigate the burdensome application process. While the stimulus should start creating jobs this year, it's uncertain when as no one's gotten any money yet.

Deployment - F
The stimulus has not sparked any deployment in 2009, and as mentioned previously it may have actually had a detrimental impact on the pace of deployment.

Speed - F
The whole point of a stimulus is to create movement quickly. We're now one year from the day Congress appropriated $7.2 billion, and not one federal dollar has gone into deployment.

Best Projects - C
While most of the winners announced to date pass the smell test, I question the relative merit of funding fiber to 400 skiing chalets or putting any money into DSL technology, both of which are among the winners so far. This is especially true as I know of a lot of higher quality projects that got rejected on technicalities and others that even though they've made it to due diligence still don't yet know their final fate.

Handling of Applicants - D
I'm really tempted to give them an F here. Most applicants heard nothing from either agency for months after applying, and then were rejected by form letter with no feedback on why they were disqualified. Early on in the process the agencies claimed they were going to work to make sure that good projects weren't disqualified based on technicalities, but then they did exactly that. A bunch of applicants still haven't gotten rejection letters and the window to submit for the second round has already opened, which is insane. The only thing keeping them from failing was that they webcast their public workshops and at least included some kind of an application database even if it's flawed in many ways.

Transparency - F
In what is supposed to be a new era of open government, this is one of the greatest disappointments. Both agencies went silent for months during this process. We have no idea if or how their review processes are working. They're not sharing any of their scoring, even for those projects they're funding. There are projects that got funded that haven't made their executive summaries public, so taxpayers know next to nothing about them. And even still today when you go to either of their respective websites or broadbandusa.gov it isn't immediately apparent who they've funded. While there are many valid excuses for the shortcomings of the review process itself due to the massive number of applications, I don't see how anyone can justify the total opaqueness that the broadband stimulus has been operating under so far.

Learned Lessons - C
Giving credit where credit's due, the second round NOFAs from both agencies are much improved. There's greater clarity and a lot of dead weight got cut out. But have they really learned their lessons? Are they really ready to handle what's going to be an even larger deluge of applications in the second round? Are they going to start being more transparent? Are they going to start treating applicants with the respect they deserve? Already you've got NTIA admitting that they're not even considering the possibility of extending the submission deadline for round two despite the fact that not all round one applicants have received their rejection notices yet. That doesn't bode well, which is why I can't give them better than a passing grade, for now.

That's the thing, though. Just because the stimulus is failing now on almost all fronts doesn't mean that it can't recover and post solid even spectacular marks. Ultimately the grade that matters most is that the best projects are funded and on that they're not failing. They're also learning from at least some of their mistakes. So I for one am still hopeful that the broadband stimulus will be more than just another government folly.

And that hope is what adds the plus to NTIA/RUS's D average.

Overall mid-term grade for the stimulus: D+

Notes: A teacher-parent conference may be needed to discuss how to improve performance.

Today I want to attempt to lay out a high-level framework for how our national broadband plan could spur broadband deployment on an ongoing basis.

It starts with the idea of establishing broadband standards. These standards will be the metrics by which we can determine if a community is fully served, if its users have access to enough bandwidth at an affordable enough price to do what they want/need to do.

These standards will have to be multi-faceted so they can address the needs of different types of facilities and users. They will have to evolve over time to meet growing demands. And they will also have to factor in the status of competition in a community.

To have an example to work with, let's say the standard to determine if a residential community is fully served is if they have access to at least two providers offering at least 10Mbps total bandwidth, with this standard increasing 50% every year. (I personally hope we can set more aspirational standards than this, but it gives us a start.)

Tied to these standards then will be a classic carrot-and-stick offering.

If a provider is offering speeds at the standard level or higher, then they get access to government incentives. For example, we could have a sliding scale of tax breaks based on the speed and price of the bandwidth providers offer. At the top level of highest speed at the lowest cost we could even get rid of federal taxes all together on revenue generated by selling this bandwidth.

On the flip side, if a community doesn't meet the standards for being fully served, then it becomes eligible for government subsidies to spur deployment. These would include everything from federal guarantees, to low interest loans, to grants. These subsidies would be available to anyone ready, willing, and able to build out their community's communications infrastructure.

These subsidies would also be another incentive to incumbent providers as if they bring their networks up to standards they'd be able to avoid the threat of government-subsidized competition.

We could then layer on another trigger whereby a community could be considered fully served if there's only a single provider, but that provider's delivering high enough bandwidth at a low enough cost even in the absence of facilities-based competition.

Special consideration in this framework should be given to high capacity, low cost open networks that allow multiple service providers to compete over the same infrastructure. In particular in rural areas where grant funding is needed to make the business case work for a single network to be built, those recipients of federal grants should be required to build open networks so that rural users can still realize the benefits of competition.

Of course, for this framework to have any teeth it'll need to have some level of capital available to provide federal subsidies. As it stands right now Congress has been sending signals that there's no new money coming for broadband. But let's think outside the box a little bit.

Universal Service Fund reform is a topic that's heating up. But so far most of the chatter has been about minor changes, like simply shifting USF from telephone to broadband. I'd like to suggest that instead we take this as an opportunity to create a new funding stream to support this framework to spur deployment.

The changes I suggest are relatively simple.

First we change the contribution structure. A flat 5% tax on all communications services, including mobile phone and ideally TV too. With a roughly $300 billion total communications market in the US annually, that frees up about $15 billion a year.

Before anyone starts screaming about this being a new tax, let's put this in practical terms. If a family has a $100 a month total communications bill, they'll only have to pay $5 a month into this new USF. If a family has a $300 a month bill, they're only paying $15 a month. These are not unreasonable numbers for any family to handle even in these hard economic times, especially when many are already paying a few bucks a month into the old USF.

Second, we take $7 billion a year and apply it to supporting a gradual transition of the old USF from telephone to broadband. This will allow existing recipients a few years to get their act together and start serving their customers with broadband if they want to keep receiving their government subsidy.

Third, we take the rest of the money and make it available as subsidies through the framework above. Some of this money would be put to grants to fund middle mile buildouts and to make the business case work for serving the most remote areas. Some of this money would go into a federal guarantee program that will make it easier for smaller providers to raise funds in the capital markets. And some will be provided in the form of direct government loans in situations where providers can't raise their own funds with the government guarantee.

The final step is that we make this a time-limited program, let's say five years as that should be enough time to solve a lot of our availability issues and it's these next five years that are the most crucial for setting the table for our digital economy for the next hundred years.

To put a finer point on what this proposal could enable, if we were to apply as little as $2 billion a year from the new USF fund to giving out government guarantees and loans, we could leverage that budget authority at least ten times, freeing up $20 billion a year in capital for deployment. Over five years that's $100 billion. Then if we gave the rest of the $6 billion a year out as grants, that would mean we'd have $130 billion over five years to build out our country's next generation broadband infrastructure.

But even better is that we might not have to spend any of it. By including incentives as well as these subsidies as threats, we're likely to see a wave of new investment by incumbent providers to bring and keep their networks up to standards.

By taking this standards-based approach to offering incentives and subsidies, combined with a new look at USF reform, we can put in place a framework that will get our country on the path towards a much bigger future through broadband.

I highly recommend anyone with the time and an interest in what's happening with the broadband stimulus program to tune in to this webcast at 11am EST today.

Jim Baller and Marty Stern will be interviewing Jessica Zufolo, RUS deputy administrator, and Angela Simpson, NTIA senior advisor. Also featured will be two panels, one of which has people who have already won, the other will have industry experts.

The discussion will focus on how round one of the stimulus has gone, and how round two will go.

These are all great, knowledgeable people, so if these issues matter to you, you've got to tune in and check this out!

Wow! Wow, wow, wow!!! That's all I've been thinking ever since reading the hot-off-the-presses announcement that Google's going to invest in building out open fiber networks to serve at least 50,000 and up to 500,000 households.

Their intent is threefold:

- To spur the development of the next generation of fiber-powered apps
- To experiment with and share the results of different models for deployment
- To prove that the open access model can work for broadband networks

The significance of each one of these can not be understated.

To have Google embrace the notion that fiber can enable a new era of high performance applications is huge. It means they're preparing to devote some of their own resources to the creation of new networked experiences, and in so doing they're going to raise the profile about the potential of fiber to a much larger audience of developers.

To have Google support fiber not just in words but in action by putting up capital to spur deployment shows a tremendous commitment to their country's future. And the fact that they're specifically looking to experiment with new models and to share the results with the public could have a profound impact on the future of fiber.

And to have Google put its money where its mouth in terms of proving the viability of open networks could ultimately shift the dynamic of how we perceive networks vs. services and applications.

These developments would be extremely important in a vacuum, but their impact is even more significant given where we stand with the broadband stimulus and national broadband plan.

To date the stimulus has been slow to get moving and limited in its imagination. To now have a new source of funds that presumably will be more open to exploring new ideas could mean that the good projects that slip through the stimulus cracks can still have a chance at making their projects a reality.

To date the national broadband plan has been on a lower-than-hoped-for trajectory with the FCC seemingly unwilling to set America on a more aspirational path. To now have a major Internet player coming out hard in support of the need for a more connected future will move this issue to the forefront and potentially force the government to step beyond their good-enough mindset and instead strive to be great. In fact, Google specifically cites the FCC's perceived lack of ambition as a driving force behind this initiative.

Not to put too much pressure on Google, but if they do this right, this initiative could be the most significant thing to ever happen to America's broadband ecosystem. It could set America on a path that the government seems unwilling and/or unable to lead us down.

So needless to say, today is a good day for Google, for fiber, and for our great nation.

Yesterday Rep. Markey (D-MA) introduced a bill dubbed the E-Rate Act 2.0. It's intended to be an evolution of the E-Rate program, which reimburses schools for their telecommunications costs. It proposes adding three pilot programs to subsidize broadband at home for low-income students, to extend support to community colleges, and to subsidize the cost of e-books.

While I think the ideas brought up in this bill are worthwhile, I'm completely dumbfounded at the assumption Markey and others are making that E-Rate 1.0 actually worked. Check out this quote from the bill's press release from Markey:

"The original E-Rate Bill that I authored has largely fulfilled its mission of linking up schools to the Web. The fact that only 14 percent of K-12 classrooms had Internet access at the time the 1996 bill was enacted, compared to more than 95 percent today, is a testament to that success."

So by Markey's estimation, E-Rate 1.0 has largely solved the bandwidth issue for schools in America. But is this actually the case? Do schools have enough bandwidth to meet their needs today? What about tomorrow? Can we declare mission accomplished?

I'm here to say today that the answer to all of these questions is a resounding NO!

And I'm not alone. Check out this quote from a 2008 report from the State Educational Technology Directors Association:

"Based upon our observations, most schools in the country are at T1 (1.54 Mbps) connection speeds... Broadband connection speeds in schools are already behind average households, and in the next few years as bandwidth needs expand, schools will need to significantly upgrade their high-speed broadband capabilities to try to keep pace with what children are accustomed to at home. Even in schools that are
sufficiently connected with broadband, bandwidth demand is quickly exceeding capacity as they utilize advanced technology tools. Simply having connectivity is not enough: without measurable upgrades in bandwidths to allow for greater speeds - or even to
maintain current speeds as demand grows, teachers and students will be severely limited in the technology applications they can utilize."

Notice the difference between this analysis and Markey's. Not only is SETDA saying that most schools don't have enough bandwidth today, but even those with sufficient capacity now don't necessarily have a clear path for upgrading to keep up with demand over time.

Measuring E-Rate's success based on how many classrooms are connected to the Internet is the wrong way to look at things. The real question is have we provided enough bandwidth for classrooms to be able to actually use the Internet? And to that the answer is unequivocally no.

For any school in America to have nothing more than a T-1 line to serve its entire student body should be considered a national embarrassment.

Let's put this in more concrete terms. Say you have one computer lab with thirty computers in a school. If thirty students try to surf the Internet at the same time with nothing more than a T-1 to share, that means they'll have about 50Kbps each to work with. That's less than dialup.

The other failure of e-rate is to do anything to bring down the cost of bandwidth. Instead E-Rate is designed to subsidize access to whatever infrastructure is currently available on whatever terms are currently offered. That means you've got some schools paying more for a T-1 than others are paying to get 100Mbps over fiber.

The biggest reason for this is that E-Rate as it's currently setup can only be used to reimburse for the cost of service, not the cost of deploying new infrastructure.

And yet nothing in Markey's E-Rate 2.0 proposal does anything to address these two fundamental flaws with E-Rate 1.0.

How can we consider expanding or reforming E-Rate without doing anything to guarantee that schools have the bandwidth they need at a price they can afford?

Before we worry about expanding E-Rate into new areas, we need to readdress what isn't working at the core of the program. Because without access to sufficient bandwidth at reasonable prices, nothing that we want to see with regards to broadband-enabled education will ever come to pass.

We need to realize that there's still a clear and present crisis in classrooms across the country when it comes to being able to access the Internet at speeds that enable teachers and students to actually use the Internet.

And we need an E-Rate program that addresses this crisis head-on. The future of our children, their education, and ultimately our country's competitiveness depends on it.

With the second NOFA out, now is the time everyone must decide whether it's worth applying for stimulus dollars.

While at first blush the answer may seem obvious as how can anyone turn down the opportunity at free money, when you dig a bit below the surface it becomes less clear.

For one, it takes a lot of time, energy, and money to put together a competitive stimulus application. And this applies to not just filling out the application but also putting together the project and building the coalition to support it.

Secondly, there are no guarantees that any application will get funded. There just isn't enough money to go around, and the second round is likely to attract many more applications than the first round.

Third, there are a number of questions regarding whether the review and selection process is working. So applicants from the first round have questions about whether or not having the best application means anything relative to who gets funded.

Fourth, whoever applies needs to be prepared for a whole lot of heartache and uncertainty as they wait for the process to play out. I know of a ton of qualified applicants to the first round who literally heard nothing from NTIA or RUS from the moment they applied until they received a form rejection letter. Hopefully this will change in the second round, but I wouldn't hold my breath.

Yet despite these caveats, there are also many reasons to apply. For example, the terms under which you can get money have improved (higher grant ratios), eligibility has expanded (higher bar for underserved), and the rules are clearer than they were in the first round (RUS for last mile, NTIA for middle mile).

Plus there's the unfortunate reality that this might be the last first, last, and best opportunity to get free money from the federal government to spur broadband deployment in your community. So despite the many trials and tribulations associated with the stimulus, it's going to be hard to justify not applying.

Now let's dive a bit deeper into the mindsets of the two primary categories of applicants for the second round: those that applied for the first round but got rejected, and those that are applying for the first time.

For those that applied in the first round but got rejected, realize that you should have an advantage over first-timers. Assuming your first application was serious, then you should have something to build off of rather than having to start from scratch.

Also, it's likely that your first application was rejected based on a technicality. While NTIA and RUS haven't said so publicly, I've heard from a number of sources that the majority of those that were rejected were for minor issues. While this frustrates me as I'd thought NTIA and RUS were going to work with applicants to make sure good projects weren't left behind, at the same time it should encourage first round applicants to reexamine and reapply as you may have been inches away from getting money.

At the same time, I think it's a mistake to just take your first round application, tweak it to fit the new rules, and resubmit it. Instead I suggest that you take a critical look at your application and identify ways to take it to the next level. How can you include more detail about what you're doing? How can you build a stronger coalition to support your project? How can you tell a better story?

As a final note, while I haven't heard anyone say this officially yet, the sense I get is that if you haven't gotten your notice that you've made it to due diligence in the round one, then you're almost certainly out of the running, even if you haven't received your rejection notice. It's time to accept this reality and move on.

To new applicants, my first point is that if you haven't already starting pulling your project together, then you likely won't have enough time to get a proper application submitted as they can be hugely complex and you're going to be facing stiff competition.

Secondly, you need to consider very seriously whether or not your projects will even be eligible under the rules. Just because your community needs federal support doesn't mean your application will qualify. And even if you think it will qualify, make sure you double and triple check as I know of some projects that weren't considered simply because they missed that one small part of their project didn't qualify.

Thirdly, and perhaps most importantly, you have to have a plan B for your project. You don't want to put a lot of energy into compiling an application then if the money doesn't come in have everything fall apart. Instead it's important to look at the stimulus as a catalyst to get a plan in motion that can survive on its own. You need to at least start considering contingencies so your community can still get wired even if the feds don't provide any help.

Fourth, you've got to be prepared to be overworked and stressed out over the next month. This shouldn't dissuade you from applying, I'm just trying to help properly set expectations.

And fifth, it's important to reiterate the likelihood that you won't get funded. My over-under on the number of applications that will be submitted for the second round is 10,000. That's four times the first round. While there is more money available, at best your odds are the same in the second round as the first, and they could be much worse. Because of this you need to make sure that you don't mortgage your future applying for a chance in the present. What I mean by this is if the cost of applying has the potential to threaten your financial future if you don't win, then these resources might be better spent on something with a more certain outcome.

That's really what the stimulus comes down to regardless of whether you applied in the first round or not: the stimulus is a gamble. It's like placing a bet on your future where the wager is the time, money, and energy put into applying and the stress you have to endure while waiting.

At the same time, I am still optimistic that despite the many criticisms of the process, at the end of the day NTIA and RUS both truly do want to pick the best projects, projects they can be proud of, that they know will produce real results for Americans.

Because of this, I want to put out a call to action. I want everyone who has a good, worthwhile project to not just apply but to submit the best possible applications they can. Unfortunately the stimulus is rife with bad actors submitted bogus applications. So let's all work together to flood NTIA and RUS with so many good applications that we can drown out the bad ones. We need to make sure that when Strickling and Adelstein say that they've got too many good applications to choose from that they actually mean it.

And most importantly, we need to leverage this opportunity to continue building momentum in communities across our great nation to get them planning their broadband future.

Last week I attended day one of the State of the Net conference, which featured a rousing debate on net neutrality led by Susan Crawford, who spent last year advising President Obama on all things broadband.

While much of the discussion was polarized and driven by talking points, there were a few moments of clarity that suggest that the divide over what to do about net neutrality appears narrower than ever.

Before getting into where the two sides are meeting, let's first acknowledge a couple of great points that were made by either side to strengthen their own case.

First off, on the anti-net neutrality side, one idea Christopher Yoo brought up was that there are a ton of things that the Internet isn't good at today that could be made better through innovation in the network:

Multicast: sending out one stream and reach a large audience.
Mobility: taking your connection with you wherever you go.
Security: making your data safer.
Cloud Computing: accessing apps run on servers rather than on your computer, which requires very low latency so when you move your mouse it moves on the screen.
Interactive Video: two-way video communications or video you can manipulate on the fly.
Change: the ability to adapt to new applications.

He continued on to suggest that there are a number of innovations in applications and technology that will require a different approach to networking than the current Internet paradigm of dumb pipes.

This way of looking at things clearly highlights some of the advantages of having networks that evolve beyond just dumb pipes. And the thing is, the real point isn't that the idea of the Internet as a stupid network is necessarily wrong, but rather that we shouldn't let this mindset limit in any way the possibility that innovation in developing smart networks will ultimately be a key component of the modern Internet.

This then ties into Yoo's closing point related to the ideas above, namely that it's ambiguous which way it's going to fall regarding which model for the Internet will win out, one where the networks are smart or stupid, so we shouldn't make a premature decision of trying to pick one over the other. Instead it's better to let the innovation happen and then regulate where needed.

On the pro net neutrality side, Markham Erickson of the Open Internet Coalition made a point that caused me to rethink my opinion about reactive vs. proactive net neutrality regulation. He's actually someone who supports the notion that networks being able to offer prioritized service may potentially be a net positive, but he cautions that if we allow operators to profit as much as they are able from offering this prioritized access that it'll mean Wall St. will start expecting the higher returns generated from investing in prioritized networks. He then asks the question of can we afford to let these expectations settle in?

It's a really interesting question and one worth considering. By not putting any rules on how network operators can sell prioritized access, they'll naturally move to maximize the profit they can generate off of this new service. Over time this could lead investors to push for all new investment to go into building out prioritized access rather than open bandwidth since it will realize a greater return.

This is the other significant point that was made by the pro-net neutrality side, namely that the issue of net neutrality itself is a product of underinvestment in network capacity and the resultant need to find ways to manage traffic to a greater degree to prevent congestion. This then leads into the dual questions of how do we avoid the situation where network operators are able to profit off of scarcity, and how do we encourage them to keep investing in capacity, especially for open bandwidth?

With all these thoughts in mind, I think I was able to identify the crux of the net neutrality debate. I did so by asking the following question of the panelists:

"If I were a policymaker in this room right now I'd be pretty frustrated as it seems like I have only two choices and whichever one I make will destroy the Internet as we know it. Is there not the possibility of a third way, a solution for encouraging innovation at the edge and in the network?"

The gap between the responses I got was remarkably narrow.

On the anti net neutrality side the answer from Hal Singer of Empiris was that we should allow network operators to strike deals for prioritized access with application and content providers, but that we need to make sure those terms are available to all comers.

On the pro net neutrality side the answer from Michael Livermore of the Institute for Policy Integrity was that we need some mechanism to protect content and application providers.

Notice how they're basically saying the same thing? The crux of the net neutrality debate isn't about open vs. closed or dumb vs. smart networks, it's about making sure that everyone has access to the advanced capabilities of smart networks.

The great thing about this is that we now have a clearly defined problem to find a solution for. But that doesn't mean the challenge is over.

Figuring out how government can insure fair access to prioritized service is extremely complex.

For example, fair access does not mean everyone necessarily gets the same price as there needs to be some accounting for economies of scale. The more I buy the cheaper bandwidth should get. But is it fair if Sony gets way cheaper access than the startup down the street? How big can that gap get and still be fair?

Another serious issue is how do we make sure we don't create a system that incentivizes investment in private prioritized service vs. open bandwidth. Just as we shouldn't outlaw prioritized service in favor of open bandwidth, we also need to protect the possibilities of the open Internet. But how do you define a solution for this? Do you mandate some percentage of investment in infrastructure going towards building up open bandwidth capacity? How do you identify if and when the market needs any intervention at all?

We also have to figure out how much we need in terms of government-mandated standards to establish the rules of the market vs. having some mechanism to respond to market failures. I ultimately think that any good net neutrality policy requires both, but the question is how much of each do we need and how much is too much vs. not enough overall in terms of government intervention.

But regardless of how we ultimately solve net neutrality, the point of this post is to highlight that we seem to have narrowed in on the crux of the matter at hand, namely how are we going to promote fair access to all application and content providers to the prioritized services of network operators.

With this in mind, I'd suggest that we all try to stop demonizing the other side as trying to destroy the Internet as we know it. Instead let's focus all that terrific energy on figuring out a solution for this clearly defined problem.

And then we can focus more of our energy on what really matters, figuring out how we can get the power of broadband to all Americans, and how we can transform America into a network-optimized country and sustain our leadership position in the global digital economy.