[Satellite News 02-22-10] U.S. Broadband stimulus funds of $100 million for satellite projects, specifically set aside in a U.S. Rural Utilities Services (RUS) and U.S. National Telecommunications and Information Administration (NTIA) notice of funds available issued in January, fell short of the expectations of some industry executives, according to statements released by satellite industry representatives.
    In a joint statement issued in November as part of a broadband connectivity credit proposal to the RUS and NTIA, executives from Hughes Network Systems, WildBlue Communications, EchoStar Satellite Services and ViaSat requested much more funding set aside for satellite than was offered by the agencies to deliver the services outlined in the stimulus plan. In the comments, the executives made the case for an end-user focused subsidy program very similar to the new "Satellite Projects" category that RUS came out with in its most recent funds available notice.
    “We propose that $500 million be set aside to fund this program. Combining elements of the existing ‘broadband infrastructure’ and ‘sustainable broadband adoption’ categories, this new application category would provide a maximum subsidy of $1,000 per new end user, covering up to 80 percent of the incremental infrastructure cost of reaching such end user (including customer premises equipment and installation costs) and a sustainable adoption component covering up to 80 percent of the cost of providing service at a lower price and/or higher quality and of associated innovative adoption programs,” the proposal said.
    Satellite industry executives suggested opening up the broadband connectivity credit to qualified satellite, wireless or wireline applicants based on a user self-certification process that would allow end users to identify themselves as underserved. According to the testimony, many of the satellite industry’s ideas were based on experience from the first broadband stimulus-funding window.
    “In our view, the first round NOFA and application process were [sic] oriented for local terrestrial models and applicants. Regional or national projects, e.g., satellite, did not easily fit within the eligibility requirements, and the proposed projects either fell short of meeting the highest scoring criteria or were not priorities for state recommendations regardless of merit.”
    Satellite executives also pointed out that the broadband stimulus’ “One Loan Per Market Rule” put satellite in an unfair position, specifically due to the RUS and NTIA’s strict rules against overlapping service areas. “This ‘one-loan-per-market’ rule was apparently carried over from the RUS’s pre-existing broadband program. During the initial round of funding, RUS acknowledged the issue but did not issue a clarification,” the executives wrote. “If preserved at all, the one-loan-per-market rule should apply solely to terrestrial providers and/or single-state projects. Without a clarification, potential customers of satellite broadband could be unfairly precluded from obtaining the benefits of Broadband Stimulus programs funded by RUS.”
    Despite the arguments, the RUS and NTIA responded to the proposal to create a level playing field by creating a much smaller version of the “Satellite Projects” category program.
    “RUS did not indicate how it decided on the $100 million amount, but they did say this amount could be increased to include any and all funds not obligated for last mile and middle mile projects,” Hughes Senior Vice President and General Counsel Dean Manson, told Satellite News.
    Manson, who co-wrote the proposal with Wildblue Vice President Robert Koppel, EchoStar President Dean Olmstead and ViaSat Senior Vice President Thomas Moore, said that the agencies’ decision, while short of the proposal, would still go a long way in connecting new customers to satellite service. “In round numbers, if the subsidy amount per new rural subscriber turns out to be $1,000, then a $100 million program could bring broadband to approximately 100,000 rural premises who today have no broadband service. We think that is a good start, and if the program is as successful as we hope it will be, this could form the basis for other programs aimed at cost-effectively bringing broadband to even more of the estimated 10 million households who today have no access to terrestrial service.”