The Land Grab Moment

We're in a land rush moment, the likes of which haven't been seen in a hundred years or more. This time, I'm talking about broadband.

If I can take you back in your history books to 1889, here is a description of the Oklahoma Land Rush courtesy of eyewitnesstohistory.com,

"At precisely twelve noon on September 16, 1893, a cannon's boom unleashed the largest land rush America ever saw. Carried by all kinds of transportation – horses, wagons, trains, bicycles, or on foot – an estimated 100,000 raced to claim plots of land in an area of land in northern Oklahoma Territory known as the Cherokee Strip. There had been a number of previous land rushes in the territory – but this was the big one."

This story has been romanticized over the years by such well-known actors as Tom Cruise (Far and Away) or Glenn Ford (Cimarron), but it wasn't a Hollywood moment. This event caused massive disruption and pain to many.?

From disruptions to incumbent Native Americans to the challenges of "claim jumpers," the elation of the "win" was followed by years of effort and toil. Yet despite the odds, nearly 50,000 people came in droves to try to claim a portion of two million acres in the Oklahoma territories to create a future for themselves and their families.

We are living in this moment again, but telecom companies are leading the movement this time. Broadband providers are taking unprecedented amounts of territory and dollars, given a spate of federal funding that easily exceeds $100B.

These funds, directed over the course of the past several years and with more years to go, are designed to serve roughly 15 million households across the country without 25/3 Mbps service (per the last FCC map).

How Much Money Is In Play?

While we all talk about the NTIA's Broadband Equity, Access, and Deployment (BEAD) program, we have to keep in mind all the dollars being spent. Here's a small list of programs targeting deployment for those keeping track:

From the FCC:

• Rural Digital Opportunity Fund ($9B with ~$6B awarded)

From the U.S. Treasury:

• American Rescue Plan Coronavirus Relief (~$350B available with at least $7B to $8B going to Broadband)
• Capital Projects Fund ($10B)

From the U.S. Department of Agriculture:

• ReConnect Program, Rounds III and IV (~$3B)
• ReConnect Program, Round V (TBD – later this year)

From the NTIA:

• Middle Mile Infrastructure ($1B)
• Tribal Connectivity Program ($2B with another $1B window open)
• BEAD (~$41.5B after accounting for planning funds and NTIA administration)

That's a lot of money, and it ignores other programs that can help drive deployment, such as the Universal Service Fund, Affordable Connectivity Program, or Emergency Connectivity Fund for schools and libraries.

The states have varying capabilities

The states will distribute the big tranche of money to come from BEAD. However, not every state was equally ready, and we see it in their ability to respond and disperse funding.?

The bellwether has been the U.S. Treasury Capital Projects Fund, which goes directly to the states. To receive funds, states had to submit a plan to Treasury. Treasury would then review and award the funds. Reviewing the announcement of funding, I saw an interesting trend about how fast states are ready to deploy, as shown below:

We can see here how some states, such as LA, NH, VA, and WV, were quite ready to receive the funds. These same states are at the forefront of the BEAD process. In fact, LA is already running its "challenge" process as directed by the NTIA to open up the first 20% of monies and a targeted disbursement in Q1 2024 to providers through a competitive process.

Unfortunately, not all states were at the same point, and this dynamic can continue. While the initial announcement of funds started in June 2022, it has taken more than a year for other states to get their funding. This suggests the land grab moment isn't a one to two year moment but could take longer depending on where you operate.

What Does the Land Grab Moment Mean to Providers?

If you're a rural broadband provider, your primary means of growth is to expand your territory while grabbing a share of customers. With this much money coming, many are pursuing these funds and setting the stage for another land grab moment, the likes of which we haven't seen since 1889!

Companies that realize this and take action deliberately over the next several years have the best chance of getting the best "claim" and positioning for the future.

Here are a few suggestions for those leaders to help them prepare:

1. Decide if and where you want to expand NOW

• Build your current expansion plans.
• Break them into sizeable chunks that can be submitted for different programs or executed on your own or with private funding.
• Don't let the funding "wag the dog" – let your vision drive how you finance

2. Challenge locations aggressively in your region

• Through the FCC's Broadband Data Collection (BDC), there is a process to challenge whether locations in your area are served or not. The latest BDC will affect the initial 20% tranche for the states, but there still are ways to challenge.
• As context, states are just now submitting their initial proposals to the NTIA to release their first 20% of broadband funds – those proposals outline the challenge and de-duplication process they will use to ensure money only goes where needed. Review this process and be prepared to participate – this will avoid creating footholds in your territory for competitors that would overbuild a served area.
• Given the BEAD has another 80% of funding to come in as soon as a year, you have time to impact the FCC's BDC maps before the next round. While this isn't a rule yet, there is no reasonable way the state won't take updates to the map, as well as ongoing awards from other programs, into consideration as they deploy that round.

3. Cement your business with lower churn through even better customer service

• Rural broadband providers are often one of the most effective customer service providers in their region, with local support and fast response times.
• Large telcos have an often challenged customer service perception, and new entrants occasionally encounter difficulties scaling into new areas.
• As a result, leaders should double down on this important factor - while technology matters, service is still the most critical factor for customers.

4. Line up your applications NOW, even while the rules are being written

• As the states prepare their "Volume II" proposals for BEAD, they will outline their subgrantee process (or how they will dole out money to providers in their state).
• Since these proposals are currently or will be, made public for review, you can use this information to start working on your applications and any necessary certifications.?
• While the final rules may change, they are unlikely to change widely. Thus, moving forward, as if the rules are done, you only have to make adjustments, not wholesale changes. Some of the requirements take time to line up, such as cybersecurity plans, compliance with prevailing wage laws, supply chain security and reliability, and financing and letters of credit.

5. If your state is likely to take longer, consider some hard choices about deployment

• A key question is, should you wait longer for the state funding to come (which will be competitive), or will you plough ahead and push your own agenda?
• If so, you’ll need to line up your financing partners and ensure your build is part of a larger strategy to build out service to your customers – this will allow you to reduce the unserved or underserved portion of your region

When you account for the funding already in play and then overlay the potential BEAD timelines, we are looking at a four to five-year window to set the stage for your business longer term. Be ready for the Land Grab moment of our time!

If you'd like to hear more about the regulatory and strategic outlook for the rural broadband industry, I invite you to join me at the Ribbon Technology Forum in Plano, TX, on November 8 and 9. I'll be talking on this topic with my good friend, Dee Herman of Herman and Whiteaker.

We'll talk about USF, ACAM, BEAD, and competition, as well as how you can position your business for the long haul.

If you plan to attend, I'd love to talk to you while there, so please reach out directly or DM me through LinkedIn.

If you would like to attend, you can register here.?

How are you preparing for this moment?

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