Let the Challenges Begin! USF/ICC Order under Attack as Parties Turn to Courts

NTCA Files Petition for Judicial Review

As many of us are still trying to read and digest the 750-page USF/ICC Order, at least 3 parties have moved forward with court challenges—perhaps hoping that the judicial branch will alleviate some of the threats to various stakeholders as the December 29 start-date for the rules looms dangerously close. Earlier this week, small Virginia provider Core Communications and the Pennsylvania Public Utility Commission filed lawsuits in their respective states.  On Friday December 9, NTCA announced that it has filed a petition for judicial review of the USF/ICC Order with the U.S. Court of Appeals for the Fourth Circuit (in Richmond, VA, where Core filed its lawsuit).

NTCA’s press statement by senior vice president of policy Mike Romano explains, “To be clear, we appreciate the FCC’s attempt to loosen, if not untie altogether, the Gordian knots that have existed around the USF and ICC program for years. The order represents a historic step forward, and a significant achievement for the… stakeholders who worked to shape the reforms.” The court filing gets right down to business, however: “Portions of the FCC’s decision in the FCC Order are arbitrary, capricious, an abuse of discretion, contrary to statute and to the Fifth Amendment of the United States Constitution, in excess of or contrary to statutory authority, a departure from reasoned decision-making, and otherwise unlawful."

The press statement further explains that NTCA is specifically concerned with provisions in the order that “put at risk the ability of small, rural, community-based providers to access capital and invest in broadband-capable networks in their hometowns and surrounding countryside.” Specifically, NTCA points to the bill-and-keep access methodology that will ultimately price all switched access and reciprocal compensation at 0; the $250 cap on per line USF support; and provisions “blurring the lines between regulated and nonregulated operations.” According to NTCA, “These provisions will harm rural communities, and will not help to advance the availability and affordability of services for all rural consumers.”

Let’s talk about bill-and-keep for a moment.

Throughout the numerous comment cycles, rural stakeholders warned that bill-and-keep or access rates of 0 would be extremely harmful. The rural associations settled on an end-rate of $0.0007 in the Consensus Framework, but this rate was still considered by many to be too low. Despite the warnings and pleadings, the FCC still decided on bill-and-keep, which it claims in the Order “has significant policy advantages over other proposals in the record. A bill-and-keep methodology will ensure that consumers pay only for services that they choose and receive, eliminating the existing opaque implicit subsidy system under which consumers pay to support other carriers’ network costs…A bill-and-keep methodology also imposes fewer regulatory burdens and reduces arbitrage and competitive distortions inherent in the current system, eliminating carriers’ ability to shift network costs to competitors and customers.”  The FCC continues by arguing that bill-and-keep is less burdensome, and “reduces the significant regulatory costs and uncertainty associated with” a specific rate, like $0.0007.

Price cap carriers have a 6-year transition to bill-and-keep, and rate-of-return RLECs have a longer 9 year transition, illustrated below:

Rural carriers have shown concern that bill-and-keep is more favorable for carriers that exchange relatively equal traffic volume, and that this methodology will prevent small companies from recovering costs. The FCC rejects the argument that bill-and-keep is only appropriate for balanced traffic exchange. Furthermore, the FCC responds in the Order, “To the extent carriers in costly-to-serve areas are unable to recover their costs from their end users while maintaining service and rates that are reasonably comparable to those in urban areas, universal service support, rather than intercarrier compensation, should make up the difference.”

Except…. Per-line USF is capped per month at $250 (an amount which some fear could be arbitrarily lowered in the future, making even carriers who are “safe” today subject to drastic cuts), which appears to be NTCA’s other major concern in their petition to review filing. If you remember the pie chart from JSI Capital Advisor’s first article on USF reform which shows such a large slice of support going to RLECs ($2b of the $4.5b total), it begins to look like meager crumbs when you consider all of the elements in both USF and ICC support that are being reduced, capped, or otherwise manipulated by the new rules.

It will be very interesting to watch how NTCA’s petition for review, as well as the lawsuits filed by Core and the Pennsylvania PUC, progress in the coming months. Do you think the courts will make a reasonable decision? Are there any other major issues in the FCC’s Order that should be reviewed by the courts?

Read NTCA’s press statement here.


Cultivating Broadband: Group Works to Connect Kentucky

In a recent opinion piece on the ever-provocative Huffington Post, writer Timothy Karr declared “America's Internet—Now as Good as Angola's!” Hyperbole? Of course. But according to the U.S. Department of Commerce's “Exploring the Digital Divide” report, released last month, some states are just not living up to their connectivity potential. Alabama, Arkansas, Kentucky, Mississippi, and New Mexico have the dubious distinction of being the five worst states for broadband adoption—with percentages of 55%, 52%, 58%, 51%, and 58%, respectively. Overall, the average broadband penetration rate for the entire U.S. is about 65%. But in the bluegrass state, the public-private partnership ConnectKentucky has been working since 2002 to address the state's need for broadband—taking a county-level holistic approach to promote “a statewide technology acceleration program.” The vision for ConnectKentucky started out in response to the Kentucky Innovation Act of 2000; it has since become a national model for broadband deployment and the basis for the Broadband Data Improvement Act, which was funded as part of the American Recovery and Reinvestment Act of 2009.

According to ConnectKentucky's Executive Director René True, the Commerce Department report is an accurate portrayal of what is occurring in Kentucky. The lower rates are mostly due to the state’s rural nature and relatively low per capita income. As a result, True believes that ConnectKentucky needs to work on “a project-by-project basis,” in order to tap into the potential of wireless broadband and design networks that fit individual community and county needs.

It would be an understatement to say that ConnectKentucky has its hands in nearly every rural town and county in the state; in fact, in many of those areas, ConnectKentucky has led wireless broadband initiatives by mapping broadband gaps, assisting with wireless network design, drafting requests for proposals, and overseeing broadband network build-outs. True explained that ConnectKentucky is an organization that targets unserved and underserved areas, then works to bring broadband to those communities.

Rather than a one-size-fits-all approach, ConnectKentucky is able to suit broadband services to the needs of individual areas. In some cases, that means going with AT&T (NYSE:T) or Windstream (NasdaqGS:WIN) for network build out, but often the group works with providers who are already in place in those areas, such as Altius Communications, Q-Wireless, KY Wi-Max, and Foundation Communications. According to True, “Connect Kentucky has been involved with some of the smallest broadband communications players serving rural Kentucky.” In fact, he said, “from a pure deployment of services to rural unserved areas, ConnectKentucky is much more likely to be talking with small local companies rather than bigger multi-state companies.”

One such initiative includes “Coal to Broadband”—an innovative project that is funded by a grant from the Appalachian Regional Commission (ARC) and matching multi-county coal severance funds. ConnectKentucky oversees the initiative by providing technical assistance and project management, from conducting research and public awareness campaigns to assisting with network design proposals. This September the group announced it had selected wireless broadband provider Altius Communications for Coal to Broadband's ConnectBELP network build out; the fixed wireless microwave network will connect Breathitt, Estill, Lee, and Powell counties in eastern Kentucky. “The sparse population and rugged topography of the four counties make it difficult for residents to receive broadband services were it not for a public/private partnership,” True said. He also noted that “original funding amounts from ARC and Kentucky Department for Local Development coal severance grants totaled $630,600.”

In other counties of the state, ConnectKentucky has worked to secure broadband for a seven-county region of the state in the ConnectGRADD project. At the outset Daviess, Hancock, Henderson, McLean, Ohio, Union, and Webster counties had next to no broadband access, particularly in the most rural areas. The rolling hills and sparse population made the regions unappealing to larger providers and traditional wired broadband, but it was a perfect proving-ground for wireless broadband. The seven constituent county governments asked ConnectKentucky to assist them in finding vendors who would build a network reaching nearly 100% of households and businesses. The completed network coverage included nearly 100% of existing industrial parks, more than 93% of residences, and offers free wireless hotspots for public use. According to True, “The ConnectGRADD project is serving over 1,800 customers, starting from a zero base.”

Danville-based KY Wi-Max was the local broadband provider of choice for ConnectKentucky's project in Washington County, and True recently said that Glasgow-based South Central Rural Telephone Cooperative plans to team with Windstream to build broadband networks affecting small portions of Warren County.

In addition to a county-by-county approach, ConnectKentucky also assists in bringing broadband to individual towns. Such was the case in Prestonburg and Williamstown, where local cable providers didn't reach outside town limits and residents were left without broadband services. With a fixed wireless broadband system now in place, not only do rural residents surrounding Williamstown enjoy broadband connectivity, but Grant County now has a 94% broadband footprint, up from 58%.

Each of these wireless broadband initiatives echo the competitive growth rates our own Richelle Elberg predicted back in November. She wrote that, in the next few years, “we think the wireless substitution factor and higher overall penetration [will] force wired broadband connections into a slow decline. Admittedly wireless isn’t a perfect solution for all broadband applications, but on the other hand, it’s likely to get better and it’s mobile.” For certain rural areas, of course, wireless broadband is the most cost-effective and the most practical in terms of infrastructure build out—and one can't help but note how partnerships between local providers, national providers, city governments and other municipalities are becoming the norm in areas like rural Kentucky.

But does build out always equal adoption? It seems every broadband penetration study notes that those who aren't connected don't necessarily want to be, nor do they feel that broadband is useful to them. In these cases, True said changing the adoption rate is going to require showing the relevancy of broadband, providing it affordably and increasing technology literacy. “It’s going to require real grass-roots, community-level efforts,” he said.

For ConnectKentucky, such grass-roots efforts are manifest through public relations campaigns and community involvement projects. True noted ConnectKentucky's Computers 4 Kids program, which “brings together public and private partners to help disadvantaged children and their families join the Information Age.” He said that the program has “successfully placed over 3300 computers and other technology with disadvantaged kids and families, not-for-profit after school programs, community centers, libraries, and schools.” These computers and the (hopefully) accompanying broadband availability is crucial to areas of Appalachia, True said. “Without broadband availability, rural communities will fall further behind economically, educationally, and from a total quality of life view.”

As an example of a community-specific technology development program, True also mentioned the work accomplished through ConnectKentucky's Connect Equestrian View initiative. Focused on the Equestrian View neighborhood—a low-income area of eastern Kentucky—this project not only brings hardware like computers and printers to disadvantaged families, but also “subsidizes up to six months of broadband access, technology training and other technology resources to increase access, adoption, and use of technology by residents,” according to True. The project is a partnership with the Kentucky Housing Authority, Lexington Housing Authority, and Lexmark.

While ConnectKentucky's community involvement doesn't necessarily provide a monetary return-on-investment or follow a typical business strategy, it does work on closing the broadband gap in its own way—by addressing unserved and underserved areas and, at least for a time, providing opportunities for residents to see broadband's potential. For True, this is central to ConnectKentucky's overall mission to foster broadband growth in the state through an abundance of partnerships, all with varying but complementary goals. True calls broadband “the killer app” for rural areas and hopefully, for ConnectKentucky and all its partners, their efforts will be enough to one day deem Kentucky “broadband's most improved.


One Month Later...How Did the 4G Network Perform versus Cable?

Definitely a Contender...For Some

One month ago I gushed about the fact that I had become a cable ‘cord-cutter’ and how pleased I was with my Verizon 4G LTE experience. With one billing cycle now under my belt I’m prepared to admit that I may have been premature in my over-the-top enthusiasm (pun intended)…but that said, I remain happy with the service and have no intention of going back to Comcast (despite four pleading phone calls from the company since I cancelled service). What I must admit to, however, is that for a household with even one “TV-Head”, it’s going to get expensive.

I logged my daily Internet habits throughout the billing cycle; you can see the daily and cumulative usage and cost in the chart below. With 20-20 hindsight, I have to say that the biggest thing I didn’t consider before making the switch was the fact that throughout November and December I have had/will have numerous houseguests.  Among these houseguests in November were my sixteen year old son who likes to play online games ad nauseum, and my television-addicted significant other. I also have yet a third person staying with me now who goes online at least some every day. The good news is that these roommates will help pay for what turned into a $180 bill…

Here’s how it happened. For the first week or so, still a bachelorette, my daily usage was between 0.3 and 0.4 Gigabits on weekdays, and far less on weekends. I realized that I didn’t HAVE to stream NPR over the computer and started listening to the radio. I also noticed that Skype video calls eat up a lot of data, so I cut back a bit on those calls in favor of the “free” Verizon to Verizon mobile calls (I know what my family members look like anyway!). Most days I don’t watch much TV, but on Saturday, 11/12, I purchased a new Blue Ray player with streaming capabilities and downloaded the software that allows me to surf directly to Netflix or Hulu on my TV. (Very, very cool!). That download and the two shows I then watched ate up about 2.5 Gigs.

For the next 10 days my friend, who got to town that weekend, and I used reasonable amounts of data—then my teenage son Nick arrived followed by the aforementioned significant other, for Thanksgiving. As it turned out, Nick’s online game didn’t seem to eat up too much data, but my boyfriend’s enthusiasm for his favorite TV shows, and the extensive library available with Netflix and Hulu, turned into nearly 10 Gigs of overage over the past 10 days or so…that’s $10/Gig, bringing the total fee for the past month to $180.

Now, that sounds like a lot, and it is, but if you consider that my last Comcast bill was $163 and all I had watched was two on-demand movies (literally, all month), and in this case there were probably 15 or more hours of television viewing, then it’s not so bad. And honestly, the TV-Head will be leaving again for a month after Christmas…I’m a big fan of Red Box so I’m betting I can get the January bill back down to less than $100.

But price isn’t the only consideration. Let’s discuss the quality of the signal and overall experience. My Internet connection is consistently fast and only for one afternoon did the Mifi device revert to the 3G network for a couple of hours. The streaming experience has been outstanding, with both Hulu and Netflix. By way of comparison, my Comcast Internet connection was notoriously inconsistent—25 Mbps one day and 1 Mbps the next. (Ironically, my colleagues at the main JSI Capital Advisors office in Manchester, NH have gone without Internet service today…their provider is—you guessed it—Comcast.)

The bottom line is that I really, really like the service and the Netflix and Hulu program offerings are extensive—more than enough even for a TV-Head like my boyfriend. Considering I was paying $145 or more previously, I’m not really going to sweat too much if I go over on data usage—although I would really like to see Verizon offer a 20 or even 30 Gigabit plan. My guess is it will eventually, as the company continues to buy up spectrum. I also love the fact that I can take my Mifi device with me and use it anywhere, and as I tend to travel frequently, that’s exactly what I’ll do.

Overall, while it’s not perfect, the cable option was FAR from perfect, and the 4G wireless broadband option is a really reasonable option for a single person who doesn’t live on the couch. But for larger households—especially those with kids—the 10 Gigabits per month probably won’t be adequate and overage charges could easily become prohibitive.


The FCC’s Egalitarian Cable Broadband Initiative: What does it Mean for RLECs?

The “Biggest Effort Ever” to Address Broadband Adoption

A wave of $9.95 per month broadband plans initiated by the Comcast-NBCU merger and seconded by a new FCC program announced on November 9, 2011 will potentially sweep millions of low-income families online. Comcast’s “Internet Essentials” program and the FCC’s “Connect 2 Compete” initiative are intended to increase broadband adoption through significantly below-market prices coupled with affordable computers and digital literacy training. This is surely a benefit to the millions of families who cannot afford $40-150 per month DSL, FTTH, 4G or high-speed cable, but is it a competitive threat to small companies?

This all started with a little merger earlier this year between cable goliath Comcast and media behemoth NBC Universal. The high-profile and reasonably controversial merger was approved by the FCC with a variety of “conditions and enforceable commitments,” according to a January 18 Wall Street Journal article. One of Comcast’s “voluntary commitments” is to expand broadband to low-income families at reduced rates. The text of the commitment explains: “Comcast will make available to approximately 2.5 million low income households (i) high-speed Internet access for less than $10 per month; (ii) personal computers, netbooks, or other computer equipment at a purchase price below $150; and (iii) an array of digital-literacy education opportunities.”

Enter Internet Essentials. Since it is a voluntary commitment, Comcast isn’t forced to provide $9.95 per month broadband, but one gets the impression that they had better just do it with a smile on their face lest they face scrutiny from the FCC for noncompliance. However, one also has to wonder if Comcast would be implementing such a program if not for merger commitment.

Internet Essentials basically follows the merger commitment language mentioned above to the letter. Eligible participants can purchase broadband for $9.95 per month plus tax, with no price increase, activation fee or equipment rental fee. Second, these families can purchase a computer for $149.99 plus tax at the time of enrollment. Finally, eligible families can receive free Internet training, “available online, in print and in person,” according to the Internet Essentials website.

Households must meet the following criteria to be eligible for the program: live in a Comcast service area, have at least one child enrolled in the National School Lunch Program, have no current Comcast account (or an active account within the last 90 days), and finally “not have an overdue Comcast bill or unreturned equipment,” which will hopefully not disqualify too many people right off the bat. Internet Essentials began at the start of the 2011-12 school year; and enrollment will be open for the next three full school years. Families who enroll can stay at the $9.95 per month rate “as long as at least one child in their household continues to receive free lunches under the National School Lunch Program.”

Internet Essentials was such a groundbreaking idea that the FCC decided to initiate a copycat program (called Connect 2 Compete) on a wider scale, backed by a venerable army of “Who’s Who in Broadband and Tech.” Connect 2 Compete includes the same three principles as Internet Essentials: $9.95 per month broadband, low cost computer and digital literacy training. Just like Internet Essentials, the program is available for households with at least one child receiving free lunches, no broadband service for the last 90 days, and no outstanding bills or equipment rental fees. Connect 2 Compete will start in the spring on a trial basis and then expand nationwide in fall 2012. The companies involved in Connect 2 Compete include the cable industry and NCTA (providing the broadband service), Microsoft and Redemtech (providing refurbished computers with Windows and MS Office), and Best Buy (providing digital literacy training via the Geek Squad). Other participants include Morgan Stanley (microloans), United Way Worldwide, Boys and Girls Club, Goodwill, Connected Nation, NAACP, and several others who together form “an unprecedented coalition of nonprofit and grassroots organization.” According to FCC Chairman Julius Genachowski, “These commitments total up to $4b in value and can benefit millions of Americans.”

Connect 2 Compete has already been met with praise, skepticism and criticism. Both Internet Essentials and Connect 2 Compete are spearheaded by the cable industry and will therefore primarily only impact low-income consumers in urban areas—not that this is bad, since broadband adoption in low-income urban areas a very serious concern. However, what about low-income households that do not include a child on the school lunch program, like elderly, disabled and single-person homes? Perhaps the FCC will tweak the eligibility requirements to include a broader demographic once the program is underway.

When he announced Connect 2 Compete last month, Genachowski cited America’s shameful 68% broadband adoption rate compared to South Korea and Singapore’s 90% adoption rate. Genachowski emphasized that education, jobs and health care are becoming more and more dependent on broadband, and “Broadband is now a basic requirement to participate in the twenty-fist century economy.” It also appears as though the FCC intends for Connect 2 Compete to be an urban counterpart to the high-cost Connect America Fund, even though Connect 2 Compete is focused on adoption while the Connect America Fund is focused on deployment. Deployment isn’t as much of a problem in urban areas; but adoption is certainly an issue in rural areas just as much as in urban areas, so it will be interesting to see if Connect 2 Compete eventually comes to RLEC territory in some form or another.

At least one non-cable, rural-focused broadband provider is apparently jumping on the $9.95 per month broadband bandwagon. CenturyLink recently announced its like-minded program, Internet Basics, which provides 1.5 Mbps (download; same as Comcast) broadband, $150 netbooks and training for more than 100 communities across the country. The key difference with Internet Basics is that households are eligible if they also qualify for the telephone Lifeline program. According to a November 21 blog post by CenturyLink vp of public policy and federal legislative affairs John F. Jones, “The true potential of adoption programs like CenturyLink’s and the ones envisioned by Chairman Genachowski will be realized at the local market level, where communications providers and their employees work hand-in-hand with community leaders and civic groups to properly identify needs, resources, and opportunities to advance not only broadband availability, but also understand and overcome the barriers to adoption and faced by those not online today.”

For RLECs, these low-income broadband adoption programs are definitely something to watch. Connect 2 Compete might actually have a double meaning, where it could boost the competitive position of cablecos that compete with telcos for low-income consumers. But, will small companies see any financial benefit from offering extremely low-cost broadband? They might if they face significant cable competition and serve large populations of potentially eligible households. Another point to consider is that today’s $9.95 customers just might become tomorrow’s $49.95 customers, especially if they utilize the broadband connection to find a new job or improve the family’s financial situation. A November 10 Wall Street Journal article about Sprint’s perspective on the Lifeline program caught my attention, stating that “In any given period, Sprint has said, more than 50% of its net new customers have come to the carrier via the free service,” called Assurance Wireless.

Economic, market and regulatory forces are definitely putting pressure on broadband providers to offer extremely low-rates coupled with cheap hardware and digital training to low-income Americans. Can we expect a large-scale rural initiative similar to Connect 2 Compete? What are RLECs currently doing to help increase broadband adoption and digital literacy for their low-income customers? Does Connect 2 Compete increase the competitive threat posed by cable companies?


Griswold IA Cooperative Looks Forward to $12.7m Broadband Loan

Much-Needed Funds will Help “Ramp up Speed and Bandwidth”

On November 14, JSI Capital Advisors reported that Agriculture Secretary Tom Vilsack announced the recipients of over $400m in USDA Rural Utilities Service broadband funding. 22 rural telecom providers in 15 states will receive broadband loans ranging from $3.7m to $32m “to build, expand and improve broadband in their rural service territories” (The Monitor: Vilsack Announces Additional Telco Funding to Expand Rural Broadband).

One company slated to receive funding immediately jumped out to me—Griswold Cooperative Telephone Company (Griswold, Iowa), which will receive $12,747,000 “to complete a system-wide FTTP network, enhancing broadband service to all subscribers.” I grew up about 20 miles away from Griswold, so I was naturally curious to check in with general manager Robert Drogo and learn more about his company’s plans to expand FTTH near my homeland in Southwest Iowa.

Drogo explained that the Griswold board of directors started discussing their options two years ago, and in order to be successful “we knew we had to look at fiber.” In addition to improving Internet speeds and capacity, the fiber will also support other capabilities like IPTV for all customers (which Griswold currently offers just in the towns it serves). Over the past 18 months, Griswold has been deploying middle-mile fiber and preparing for the end-goal of FTTH, “should we be fortunate enough to get the loan.” Griswold’s $12.7m good fortune will be used to take the company from its current 60% fiber deployment to FTTH for its entire customer base—1,700 lines in the communities of Griswold, Lewis, Elliot and Grant.

The company’s current DSL speeds go up to 3/1 Mbps tops, but with IPTV also running on the lines to the in-town customers, the bandwidth is getting crowded. Once the fiber is fully deployed, Drogo estimates that customers will experience 5/1 Mbps at the low end and 10/3 Mbps at the high end. He also commented that “now speed isn’t an option,” and it is absolutely necessary for the company to keep reaching for higher limits—hence the importance of the RUS loan.

Many RLECs surely hope that deploying high-speed FTTH will attract new businesses to their service areas, and a few new medium- or large-sized businesses would obviously be a real catch for a rural community like Griswold (located about mid-way between Des Moines and Omaha). Drogo wasn’t sure if the project would help attract any significant new businesses to the area. However, he explained, “I don’t see a big draw on the top end, but [the FTTH] will definitely be a benefit to home based, small and agricultural businesses.” As I grew up in this area, I can certainly see the appeal of being able to run a business from home—the hour plus drive to Omaha or Des Moines can get quite monotonous (especially every day for a job), and volatile Iowa winters definitely add an element of uncertainty to a long commute. Griswold’s FTTH may facilitate more teleworkers and home-based start-ups, and it will surely benefit the area’s important agricultural economy.

Companies eager to deploy FTTH are often quick to claim that the investment will bring new business to struggling rural economies, but it really might be just as important to focus on bolstering the community’s current small businesses. Hopefully Griswold’s broadband loan will help ensure that the local businesses (current and future) will have the tools to move forward at a pace that matches economic and business development in urban areas.

The fiber expansion should help Griswold become more competitive on the video front as well. IPTV will become available for the rural consumers, who currently can only receive pay TV from satellite providers. Of course, the FTTH will also give the rural consumers an opportunity to “cut the cord” on traditional video if they desire, since the FTTH connections will be able to handle plenty of Netflix. Drogo speculates that Mediacomm may come to the community in several years, but by that time Griswold could have a significant competitive advantage on video services. Drogo does not see wireless broadband as an immediate competitive threat, but he anticipates that 4G will eventually be available in the area—although that could also be years down the road too. Even so, it is likely that wireless broadband will complement, and not substitute, Griswold’s FTTH service offerings.

Griswold will probably not see the $12.7m RUS loan money for at least 18 months, but the company has been approved for interim investments such as ordering the fiber. Drogo believes that the $12.7m will be enough to complete the entire FTTH build out. He added that this amount is “very conservative” and was calculated to account for various regulatory, legislative and resource uncertainties. Drogo is “not concerned” about the bad publicity that has been hanging over USDA and BTOP broadband loans like a dark cloud in the past few months. For the most part, RLECs have been putting their broadband loans to good use and have not been caught up with any of the various failures or mismanagement catastrophes that some other  loan recipients have encountered.

With this $12.7m broadband loan, it sounds like Griswold Cooperative Telephone Company will be in a position to achieve its strategic goals and bring benefits to the community. The FTTH deployment could solidify the company's competitive advantage if it is completed before cable and 4G competitors start knocking on the door.

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