Broadband Technology Opportunities Program (BTOP) to Spark Next Telecom Boom

The Obama administration’s stimulus spending will pump billions of dollars into US telecommunications markets. As much of the target of that spending is rural markets, 4G wireless technologies and the associated vendors and service providers will prosper, ushering in The Next Telecom Boom.

The Broadband Technology Opportunity Program (BTOP), created by the American Recovery and Reinvestment Act of 2009 (aka “Stimulus Act”), provides almost $5 billion in grants from the National Telecommunications and Information Administration (NTIA). The goals of the program are five fold:

  • Provide broadband in un-served parts of the US
  • Provide broadband in underserved parts of the US
  • Provide broadband to support education and healthcare
  • Provide broadband to support public safety
  • Provide broadband to support job creation

Parties eligible for the grants include public, private, and non-profit entities. Public-private partnerships are encouraged. Communities need to act now if they want to participate in the funding.

The application process is comprised of three elements:

  • The Application: This is the applicant’s business plan. Like any business plan it documents how the money will be spent and what social good will be derived from taxpayer dollars in terms of the goals of the BTOP.
  • The Engineering Plan: Provides the review panel exactly what technologies will be deployed to meet broadband guidelines and how that will be achieved in the engineering of the network.
  • The Cost Estimate: Catalogs what broadband platforms will be purchased with the money and the costs of deploying the broadband network. All applicants should be aware of “unjustified enrichment” provisions in the program and be advised that all awards will be posted on a Government website.  There is a $10 million allocation for the NTIA Inspector General to conduct audits of awards.

NTIA will announce final rules for applying for grants mid-to-late June 2009. Applicants may have only 30 days to submit applications with awards being announced some 90 to 180 days there after. A second round of applications will be taken in the Fall of 2009 and a third round occurring in the Spring of 2010. All awards must be made by Sept. 30, 2010. Projects must be “substantially complete” within two years of the award.

In terms of “telecom time”, there is not much time to execute. The short time frame dictates the eligibility of technologies. Deploying new fiber in fiber to the home or fiber to the pedestal can be ruled out if all plans, permits, and horizontal boring gear are not currently in place. That is, the project would have to be absolutely “shovel ready”. Upgrading DSL or cable modem plant is feasible in this time frame if, repeat if, the service provider has a skeleton network in place. Any service provider applying for grant funds will require adequate “middle mile” assets (usually backhaul elements independent of local competition) available to support their “last mile” access networks with speeds of 3 Mbps or greater to comply with the NTIA guidelines.

Speed should be the keyword for any grant applicant. That is, the speed the broadband technology can offer the subscriber in order to meet technology guidelines, the speed of network planning and permitting, and the speed of deployment in order to meet the build-out requirements (two years from time of award, also not much in “telecom time”). This leaves the debate to wireless solutions that can:

  • Offer the speed of network planning
  • Offer the speed of applying for the grant
  • Offer the download speeds mandated by NTIA

WiMAX and the Speed Test

WiMAX requires less time in network planning than wired technologies. Aside from roof and tower rights, fewer rights of way and other real estate issues have to be negotiated. Assuming the applicant uses the “lightly licensed” 3.65 GHz spectrum, applying online for the spectrum license from the Federal Communications Commission requires about five minutes with about a four-week wait for near automatic application approval.

Speed of planning and deployment of wireless backhaul to support WiMAX may be speedier than protracted negotiations with an incumbent service provider who may not be happy to see a competitor in their market. Meeting a speed test of 3 megabits per second (Mbps) down to the subscriber and approximately a 1 Mbps uplink from the subscriber is achievable with WiMAX using the 3.65 GHz spectrum at line of sight distances of at least five miles.

The BTOP program coincides with a May 01, 2011 deadline for build-out requirements for Educational Broadband Services (EBS, 2.5 GHz). Holders of these licenses would be advised to take advantage of the BTOP program to finance a 2.5 GHz WiMAX network, meet the requirement to provide “substantial service” on their spectrum, and save their licenses.

WiMAX also offers a fast speed of deployment. Installing a WiMAX base station might require less than one day. Testing the network will take a few additional days. Assuming a maximum range of five miles, this equals a coverage zone of almost 80 square miles from one base station in one day. No wired technology can be rolled out this fast. Using WiMAX helps the applicant meet build-out requirements and achieve a faster return on investment (ROI) than fiber to the home/pedestal.

WiMAX and the Next Telecom Boom

WiMAX will be the Wi-Fi of the not so distant future thanks to the BTOP program. BTOP and other programs are the spark necessary to launch the next telecom boom enabling a wide range of innovations made possible by ubiquitous broadband internet access. These innovations will not be limited to technology epicenters like Silicon Valley or Mumbai but can occur anywhere BTOP financed a network.

For the applicant, the BTOP funding is essentially an 18-month window of opportunity. For many applicants, WiMAX should be the preferred technology in order to meet the list of “speed tests” necessary to get funded and enjoy a successful deployment.

Editor’s Note: Frank Ohrtman, the author of several books on WiMAX, VoIP, WiFi, and WiFi-VoIP, teaches courses on the technology and business of WiMAX for Eogogics. He, and other Eogogics experts, are also available for consultation to those considering taking advantage of the BTOP opportunities.