THE BLOG
07/30/2009 05:12 am ET | Updated May 25, 2011

Texas and Tennessee Have Fun With Broadband Mapping Money

With up to $350 million in federal stimulus funds allocated for broadband mapping, an organization called Connected Nation is racking up the frequent flying miles in an effort to capture the lion's share of the money. The question that government officials will answer over the next couple of days is whether those millions of dollars will go to a group dedicated to protecting the interests of the telephone and cable companies -- groups which want to control how their information is collected and displayed so that the private interest takes precedence over the public interest.

Connected Nation, headquartered in Washington, D.C., is a non-profit organization that represents the interests of the telephone and cable industries (executives of which dominate its board) in broadband mapping by obtaining contracts from states to do the work while also protecting the "confidentiality" of deployment information that may be deemed "proprietary" by the companies supplying the information Connected Nation charges up to millions of dollars for mapping and, in some occasions, to organize local teams to assess demand.

From Austin to Boise, Honolulu, Oklahoma City and even up to Wasilla, Alaska, and many points in between, Connected Nation has pitched its services to state governments, with impressive results in either setting up the contracting process to obtain contracts, or obtaining contracts outright.

At the same time, those results provide cautionary tales for Federal policymakers who would delegate mapping projects to state governments. One story involves the intracacies of the bidding process. The other involves how to do away with a bidding process. In one case, Connected Nation was the winner. In the other, its chances of winning are extremely favorable.

Texas Mapping Plan Shifts Gears

The eyes of the mapping community are now focused deep in the heart of Texas, and therein lays the first cautionary tale about entrusting broadband mapping to the states. On April 27, the Texas Department of Agriculture (TDA) along with the state Public Utilities Commission issued a four-page request for information (RFI) looking for broadband mapping capabilities. The RFI had a three-week deadline, with responses due May 15.

For comparison, it's useful to examine a similar RFI issued by the state of Connecticut.
That document was issued June 12, 2009. Respondents had four weeks to respond with questions and 12 weeks actually to respond to the request, with a final date of Sept. 12, 2009, for a state much smaller than Texas. The responses from the RFI would determine whether a separate Request for Proposal (RFP) would be issued.

The Texas RFI had some general requirements for which type of organizations should be eligible to apply: "Eligibility. Responses will be accepted from contractors with proven experience in delivering statewide broadband mapping, and that can specifically address the iniatives and capabilities set forth in the BDIA. Customer references and a list of completed projects will be required. Additionally, companies with business interest in broadband service delivery and contractors with expertise in broadband service delivery are encouraged to submit information on the topics requested."

In addition, the RFI also included a section asking for an "Overview of the Company." Respondents were asked to "Provide a description of the company, including general experience and history in performing broadband mapping services or experience with broadband service delivery, date founded, number and location of offices, total number of professionals and employees in the company, description of specialty practice areas and company philosophy. Describe structure of company ownership (e.g., publicly held corporation, partnership, etc.) any parents, affiliates or subsidiaries of the company."

The RFI generated 21 responses, including two non-profits, Connected Nation and One Economy, and a number of commercial mapping companies. However, when the RFP came out those interested in competing for the program got a rude surprise. First, the deadline for responses was extremely short. The RFP was issued June 9; the closing date was June 19 -- a mere 10 working days. Agriculture Department spokesman Bryan Black said that because of the original RFI, it was "not a big surprise" that the RFP would be issued, and so a longer response time wasn't needed.

Second, the eligibility sections changed. Instead of the original terms of the RFI, which was open to any organization, the RFP restricted bidders to non-profit organizations, a fact not noted on the agency's news release which referred to "proposals from telecommunications companies to map the state of Texas for broadband availability."

Non-Profits Only Need Apply

In the RFP, the agency changed the eligibility sections from one embracing commercial ventures to conform to the agency's interpretation of the Broadband Data Improvement Act (BDIA), which passed last year. The legislative history is a bit convoluted, but it's necessary to see how a bill introduced April 24, 2007 by Sen. Dick Durbin (D-IL) will be the gift that keeps on giving for Connected Nation.

The "Connect The Nation Act" would establish a State Broadband Data and Development Grant program. Under the Durbin bill, grants could only go to an "eligible entity," defined as "a non-profit organization that is selected by a State to work in partnership with State agencies and private sector partners in identifying and tracking the availability and adoption of broadband services within each State." There is, of course, no valid reason why non-profits only could work with states, leaving out private companies - except that the bill was written with substantial input from Connected Nation - which happens to be a nonprofit.

There are many private companies which could do mapping - and they claim they do it better than Connected Nation - but they would be shut out if the Texas interpretation is correct.

Durbin's bill never got anywhere, but some language from it was incorporated into the Broadband Data Improvement Act, which did pass last year. The stimulus law which contained up to $350 million for broadband mapping technically funds the BDIA. As a result, it is quite possible that non-profits, of which Connected Nation is the most prominent, will have the inside track to the broadband mapping funds.

Shortly before the closing date, the Agriculture Department issued a "Clarification of entities eligible to respond to the RFP." The Department said, "it is the opinion of TDA that BDIA definitions of an 'eligible entity' will govern any BDIA grants awarded by the National Telecommunications and Information Administration or Commerce," for the sole organization selected to do the mapping.

As it was, Texas ended up with six respondents to its RFP: BroadMap L3C ; Connected Nation, Inc.; Longway Broadband Services; One Economy Corporation; The Rural Mobile Broadband Alliance; and the TSTCI Foundation, Inc.

Of that group, BroadMap and Longway are commercial companies. The Rural Mobile Broadband Alliance started in April, primarily as an education and advocacy group to make sure rural areas had access to stimulus funds, according to Austin-based organizer Luisa Handem. Handem was critical of the Texas proposal, saying, it "looked as if they (Connected Nation) wrote the proposal." The group has more than 100 members, including engineering firms. TSTCI is the trade association of telephone cooperatives in Texas, although it also includes commercial companies. One Economy is known primarily for its online work and for helping to install broadband services. Ken Eisner, managing dir. of OE Ventures, said One Economy had submitted a big as part of a consortium with data-analysis firms, Broadband Census.com and the New America Foundation, which will use its Measurement Lab and Google Earth technology.

The decision to exclude for-profit companies did not sit well with some of the companies which responded to the RFI. Afterimage GIS CEO Paul Shanayda said he would sum up his reaction "as disappointed. We had hoped there would be a chance to respond and show our abilities, but it will have to wait for another opportunity, hopefully." Daniel Perrone, CEI of Broadmap L3C, said, "states and their constituents should be given the ability to select the company that offers the best broadband mapping solution overall."

Perrone said it appeared to him that only two of the parties responding to the Texas RFI would be eligible, added: "BroadMap believes it would be more beneficial for states to have these opportunities treated openly and fairly, on equal-footing, regardless of company designation providing each state with the best possible solution and information needed to expand serviceability to the unserved and underserved, truly supporting the American Recovery and Reinvestment Act the way it was intended."

Vince Jordan, president of RidgeviewTel, a Colorado-based company that maps broadband and provides service in rural areas, agreed, saying: "It makes absolutely no sense for the stipulation of a company having to be non-profit in order to be awarded a mapping contract. What exactly is that stipulation trying to accomplish? Does the law assume that because the company is a non-profit it will be impartial and accurate? A for profit company focused on accurate mapping would do just as good a job, maybe better. If for profit companies are competing for this work, the competition will force them to develop better tools and better data, potentially better than a non-profit would. This is what I refer to as artificially constraining legislation. It makes no sense (nonsense)."

Jordan was sufficiently upset about the situation to send letters to key Congressional staffers arguing that Connected Nation's mapping approach among other criticisms, doesn't take into account capacity of broadband facilities and doesn't change as frequently as it should.

Jordan wrote: "It is RidgeviewTel's feeling that Connected Nation's approach and product is severely flawed, and we would like to add our voices to the chorus of concern being broached by a wide variety of individuals and associations, including the state of Kentucky where Connected Nation started. There are many others who are speaking up and attempting to get Congress' attention on this matter."

Joseph Longway, president of Longway Broadband Services in Mount Juliet, Tenn., said that even after he replied to the RFI that he headed a sole proprietorship, Texas officials sent him "numerous emails on how to do the RFP" when they knew that he wasn't eligible to compete. "It makes no sense," Longway said, "It's just ridiculous." For the most part, the bidding for mapping will be left to Connected Nation, Longway said. Even some organizations like Connect Arkansas, which is not affiliated with Connected Nation, might be ineligible because of how they are organized under state law as private nonprofits, not public 501 (c) (3) organizations.

Connected Nation Waltzes to Tennessee Contract

There is a more direct way to obtain state funds, short of having to go through the whole cumbersome bidding process. Our second cautionary tale of state mapping comes from Tennessee.

On April 23, 2008 the state gave final approval to a three-year, $6.675 million contract (excerpts here) with Connected Tennessee (CT). The contract, first agreed to in 2007, was labeled as a "non-competitive negotiation," which was justified because, the contract noted, that Connected Nation (the original grantee) had a successful program in Kentucky and that costs for Tennessee were "at similar or lower amounts" than the Kentucky programs.

There is some disagreement, however, about how successful the Kentucky program, the birthplace of Connected Nation, actually is. Jonathan Miller, the Kentucky Secretary of Finance, was blunt in his evaluation, saying in an interview, "We smell something pretty bad" with the mapping program, and the state is trying to "develop plans try to cope with it." Greg Haskamp, Miller's point person for broadband issues, said the problem is that the state can't get access to the underlying information on which Connect Kentucky based its maps because of the non-disclosure agreements (NDAs) the organization signed. Haskamp said, "We're in a predicament. Their (Connect Kentucky) maps claim certain coverage. We just don't know. We have concerns never been independent audit of the maps."

The Tennessee contract sheds some light on what the state has for its priorities, based in part on the services to be provided under the contract and on the amount of money for each service. Based on the amount of money being spent, the mapping is fairly far down. At the top of the list is that Connected Tennessee "shall provide a custom branding strategy for Tennessee's Trail to Innovation." Once the state approves a design, CT's top duties were to

a. Create press releases that reflect the goals of the initiative
b. Obtain placement of communications/promotions content in relevant media outlets
c. Develop and place customized ads in key periodicals
d. Publish and distribute reports on the progress of the initiative to the State and other appropriate stakeholders

Also on the list of things to do are creating a statewide steering committee from universities, health organizations and tech companies; establish eCommunity leadership teams, develop through those teams goals for increased tech adoption; provide consultation to the teams and provide regional updates on the expansion of technology programs. They also have to give away 1,000 computers each year.

Most Money Goes to 'Branding' Activities

Listed after all of those - produce a map of broadband services areas, creating "a reliable illustration of where broadband does and does not exist." The first map is due within three months and is updated quarterly. Listed after the mapping is a requirement that CT survey consumers and businesses on the level of technology use.

The contract breaks down into $2.225 million per year. Of that total, $1.325 million is dedicated to the "custom branding strategy," including the steering committee and leadership teams. Another $400,000 is allocated for computer distribution. There are also two consumer survey reports worth $150,000 and two business survey reports, worth another $150,000. The broadband maps are budgeted for $200,000 -- $50,000 per map.

Longway, the president of the Tennessee broadband company, testified before the state broadband task force and before state legislative committees against a Connect Tennessee contract. Longway told us he thought that mapping should be done by a Tennessee company, not an outside group, and criticized the state for signing a non-competitive contract. Longway, who has also worked with Arkansas state officials on broadband planning, said he was once asked point-blank by an influential legislator whether he supported Connected Tennessee. Longway said he replied, "No, they're awful."