FTTH Council Proposes Unspent CAF Money Fund ‘Gigabit Communities’ in Small and Rural Areas

The goal of the program would be to develop a “critical mass” of gigabit communities to bolster the business case for ultra-high speed deployment around the country, said FTTH Council Americas President Heather Gold on a conference call announcing the proposal. Entrants would be eligible for up to $10 million each, with 15 grants given out each year over five years, she said. The FTTH Council has been in talks with FCC officials since around the time then-Chairman Julius Genachowski unveiled his gigabit city challenge, Gold said. Genachowski told the U.S. Conference of Mayors in January that each state should have at least one community with gigabit broadband speeds by 2015 (CD Jan 22 p1). The FTTH Council’s petition would “spur the gigabit city challenge to become more of a reality,” Gold said.

Gigabit networks “can transform the mindset and capabilities of communities,” said the council’s petition. But high up-front costs for network development and the lag in bringing in enough revenue makes it difficult for cities to build them, it said. The council’s proposal for a “Gigabit Communities Race-to-the-Top Program,” would complement the FCC’s E-rate modernization efforts (CD July 22 p1) and build on the “long-range vision” of the National Broadband plan, the group said.

"Facilities and service providers, working with local governments, community anchor institutions, and their associated neighborhoods, would apply for Catalyst Funds through proposals to deploy gigabit networks in Tier II and Tier III markets and to provide voice, other telecommunications, and broadband services at reasonable prices to anchor institutions and surrounding neighborhoods,” proposed the council. It defined Tier II and III markets as rural areas, or communities with a population of less than 200,000. “The Council envisions an annual national competition for Catalyst Funds by which the Commission would select up to fifteen meritorious proposals annually and provide each of them with up to $10,000,000 in Catalyst Funds. Accordingly, each year up to $150 million in Catalyst Funds would be awarded, and as many as seventy-five projects would be funded over the five-year life of the Program for a total of up to $750 million."

This program is the “logical complement to what [the FCC] did last week with the new initiative to upgrade the E-rate program to gigabit speeds,” and also follows on the rural telehealth order last year, said Thomas Cohen of Kelley Drye, who represents the council. If price-cap carriers reject their CAF funding, “we think at that point it becomes a logical step to, say, take a piece of that money for this program,” Cohen said. That would be a way to provide support in many of the same areas as contemplated through CAF, he said. The FCC’s CAF program currently funds unserved areas -- those that lack broadband with 4 Mbps down/1 Mbps up. “That was nice when you did that two years ago, but now given the realities of the marketplace, it’s time to take a step back, reappraise what you are doing, and say this is a better path forward,” Cohen said.

"Fiber to the home connectivity is really essential infrastructure for cities,” said former Kansas City, Kan., Mayor Joe Reardon. Google Fiber is proving as indispensable as curbs and sewers in creating positive economic development in Kansas City, Reardon said. “Offering that seed capital to cities throughout the country” would let the deployment occur more broadly so more citizens can see benefits, he said. Mike Burke, KC Digital Drive co-chairman, said that “just the announcement of the high-speed fiber network energized our tech and entrepreneurial communities in a way that they had not been energized before.” Now “is the time for creative thinking about how to upgrade bandwidth in rural America and the petition is a great way to start that discussion,” said Gig.U Executive Director Blair Levin. “It’s also great to think about addressing problems though a competitive framework.”