Fast Net News, DSL Prime, DOCSIS Report

1. Think like an engineer, not like a lawyer or a theoretical economist. Look at the facts on the ground and the homes to be reached. Identify the least expensive way to do that, then do it. There are about 4M homes that can get cable TV but not data that can be upgraded for less than $500/home to 10 and 50 megabit. That's $1.5B of the $7.2B to reach 3M homes, nearly half of the probable unserved. Some of the remaining territories can be reached with DSL or wireless at costs well under $1,000/home. Give those priority.

2. Get serious about not wasting money. Many of the projects coming in are asking are asking two to five times what they should cost

   and there is no clear process for fixing them. Simple cost accounting guidelines would quickly identify $hundreds of millions of waste and would require less than 10% of the administrative budget to put in place. Honor the President's promise to release all the information needed to see the money is being wisely spent. I've identified AT&T projects for upgrading DSL for over $10,000/home that should cost less than $1,000/home approved by the CPUC. Commissioners Chung and Peevey are currently stonewalling my information requests in the hope the scandal would disappear. Mapping that should cost $10-$25M is currently budgeted at $240M. That's criminal.

3. Congress required RUS and NTIA not to subsidize what carriers would pay for anyway. In particular, home equipment and installation will almost never need a subsidy because the companies are delighted to cover that cost in return for a paying customer. Broadband customers are very profitable – 40% to 70% margins, hundred of dollars a year per average home. So any sensible company would cover the cost of installing what's necessary for a paying customer. Routers and backhaul upgrades are similar, although the total is smaller.

4. Use the existing “special access” rules to bring down the cost of middle mile backhaul rather than spending $billions on a minimally effective overbuild of existing fiber. At the FCC workshops, rural backhaul costs were identified as reaching $100-$200/megabit compared to the $5-15 a megabit in most cities. Brutal backhaul costs because of limited competition is often the hardest problem for rural carriers to solve. There's already enough public record on “open access” for the FCC to move almost immediately, and it's by far the single most valuable thing the FCC can do for broadband.

Above all, work from the facts instead of lobbyist lies. Make sure every proposal lists the number of homes reached that are currently unserved and the number of jobs directly created. If the proposal asks $15,000 per unserved home connected or $150,000 per job directly created, that's a pretty obviously a problem. There is no evidence middle class people telling the poor, elderly, and learning disabled broadband will change their lives will lead to significant “sustained broadband adoption” so don't fund anything beyond experimental programs for “demand stimulus” without some proof. Connect Kentucky outreach by their own figures was worse than useless, but their own figures have no statistical significance.

There are some extraordinary people working to spend this money well, including nearly every leader of the program. There are many companies making sensible proposals worth supporting. There are also slews of patronage hacks and poverty pimps. The crooks are outnumbered by ordinary businessmen looking to receive as much government money as possible. It's no surprise a company wants to make a profit; it's the obligation of the program to make sure the public gets our money's worth, not the companies.