Daniel Aghion Subscribe to Newsletter Tell a Friend Print this Page 01/12/2010 Q & A with Civitium Greg Richardson, Managing Partner and Bailey White, Sr. Partner This Q & A is the first of an ongoing series of interviews with field practitioners closely associated with project recipients of broadband stimulus award funding. The purpose of this series is to facilitate the sharing of successful best practices. Q: Thank you for making time for this interview. Congratulations first of all on the North Georgia Network Broadband  Stimulus Award. Could you please introduce yourselves and Civitium? A: I am Greg Richardson, founder and managing partner for Civitium and I am Bailey White, senior partner at Civitium. Civitium provides consulting advice throughout the broadband infrastructure implementation lifecycle, from initial planning and conception to design and engineering into oversight and management of deployment and advice during operation. Q: Greg, you founded the organization in 2004-2005. Can you give us a little history and background? Greg: Sure. As you mentioned, we've been around almost six years now, since 2004, and initially our focus was much narrower than it is today. We focused almost exclusively on a local governments client base, and our competency was really in wireless technologies with a focus in that period of 2004 to 2007 on municipal WiFi. We had a good bit of success through that era, and we got known for work with major cities and learned from the inside of the market a lot for the good and the bad in terms of what works and what does not work. We also developed strong experience with advising our clients on  building public-private partnerships, situations where municipalities were engaging with private providers, usually ISPs to improve broadband. We amassed a great deal of knowledge about the delicacies of such partnerships, with the balance and tug of war between private and public stakeholders. As that market changed dramatically in 2007, we found ourselves with the need and opportunity to diversify, and I think we are now very different from what we were back then. Q: Could you tell me which of you two or possibly both has been closely associated with the North Georgia Network program, the recipient of the largest award among the first recipients of broadband stimulus funding just announced on December 17th by Vice President Joe Biden, and describe the project? Bailey: Greg took the lead on the North Georgia project. The North Georgia Network was a project that was started in 2007-2008 by a group of economic development authorities focusing first on a county, then banding together for a regional initiative. In this case, the initiative was to try to bring into the North Georgia corridor more and better paying jobs, attract more employers to deal with relatively high unemployment. Q: Was that in any way associated with the Georgia Broadband Authority, the Georgia Technology Alliance, or any other such organization? Bailey: We first got to meet with NGN at a conference that the One Georgia Authority put together, called Georgia Connection. One Georgia Authority should be credited with getting NGN going. They ended up providing funding for the planning and initial work that was so crucial to NGN's success. At that point, we were like everyone else, trying to find the magic formula as consultant for our client base in search of funds and we had a lot of experience to help with this but were to a large extent still shooting in the dark, because there was very little precedent for this kind of program, at least with that scale. We were able to help NGN after getting the initial One Georgia Authority planning grant that allowed the project to get a running start. In early and mid-2008, before the stimulus program was announced, we had already done a substantial amount of planning on the feasibility phase: assessing the needs of the region, the positions of the different stakeholders, the demand through the region, the inventory of existing assets. The stimulus plan was announced at a very convenient time when we were making key decisions on how the project would proceed. So NGN made the decision to pursue stimulus funding as a means to achieve their goals. Q: Would you say that the project would have gone on without the stimulus funding, and if so, did the stimulus act as an accelerator rather than a trigger? Greg: That's a great way to describe it. I think the motivation of the different parties would have survived without the stimulus. The scale of their ambitions for the type of network and the type of infrastructure, how effective that could be in terms of regional initiative, that would have been pulled back. Those communities, like many others around the country, are dealing with declining property values, declining tax revenues, layoffs, etc. So the idea that the communities would have invested in a major broadband network seems pretty remote in the midst of a recession. I think you said it well, the stimulus came in as an accelerator.   Q: I think in a way that is misunderstood. There were a series of projects throughout the country, One Georgia among the more advanced, at the research and planning stages, that would have occurred without stimulus. What the stimulus really meant was a tremendous acceleration opportunity for those projects.   Greg: Remember that there was only a six-week window to actually apply. So to be among the early winners, you really had to have most of your application literally ready before that window opened. You had to have finalized the planning around the technologies and around the business model to be able to respond in an effective manner in those short six weeks.   Q: So at that time, you already had an investment in that project, and more importantly, you had broad support of the various stakeholders. That made a compelling case for the Federal Government to invest in the program.   Bailey: I think that what helped NGN a lot is that the project really relies on the private sector. The electric utilities have the resources in this particular case to be able to provide the staff and line expertise and to keep the program up and running. To try to do the same thing as a pure non-profit can be a challenge.   Q: Would you mind describing the process, the ups and downs, and the lessons learned that may be applied to other projects?   Greg: We had about a half dozen clients that were going through round one of applications concurrently, and given the time frame, the period was very intense trying to meet the deadlines. The second thing, as we mentioned, is there was no precedent on the scale of this program. In the case of NTIA, they had never run a program that large. It was an entirely new process that NTIA had to put in place for the grants, how to grade the submissions, put the resources in place to review a couple of thousand applications. They ended up hiring outside consulting firms to help them deal with all this. I think the NTIA had a budget of something like 20 million dollars before this program started that mushroomed overnight to 140 million allocated just for oversight of this program; that gives you a sense of how large the initiative is.   Q: It was a learning experience for all involved.   Greg: The industry as well as the NTIA had to grapple with definitions: underserved, unserved, last mile, middle mile and so on. The definitions actually became a sort of by products of the applications. These definitions are critically important when you deal with such notions as drawing a boundary around your region and explaining how it qualifies as underserved. In one case that we were working on, our application was pretty much ready to go, and ten days prior to the submission, we had to reengineer the application, go back to the drawing board because we received new clarifications that made clear that the areas we had picked were not going to qualify.   Q: In the NGN project, is there any last mile component related to broadband adoption and any request for sustainable broadband adoption dollars? Greg: There are last mile components in the NGN project. During the due diligence with the NTIA, it was agreed that this project was predominantly a middle mile project. Rules required that you classify the projects as middle or last mile. So in answer to your question, there is a general notion in the industry that broadband adoption in rural and underserved area can be a problem. Having gone through all those counties in North Georgia, we really found the opposite to be the case.    Q: You are saying there is a pent-up demand?   Greg: There is certainly a pent-up demand in the institutional use area: schools, government, some of the larger businesses, that's no surprise. The thing that was more surprising is that the key electric utility partners, who essentially own and govern NGN, already provide fiber to the home of their subscribers on a very limited territory, providing subscribers with much more advanced services telephone and cable providers in the area. The adoption rate for those broadband services was quite good when available. So we did not feel we had to invest heavily in broadband adoption, and made no formal request for funding under that program. The big factor there is going to be affordability.   Q: That's where I was going. There are 3 big buckets of potential subscribers where there are some adoption barriers: elderly people that need to understand the benefits of broadband access and accept the process of learning to use the services; people with disabilities; and people who cannot afford the hardware and or the service on an ongoing basis. There are several programs various stages of advancement, including an alliance of Intel, Connected Nation, several PC manufacturers  proposing to use stimulus funds to help service providers tackle  digital literacy and affordability issues in order to accelerate adoption of their broadband services..   Greg:  I totally agree with you. There are pockets of potential users where adoption is a challenge. But when we looked at the region as an aggregate, we found that this was not really NGN's biggest challenge. Affordability is always a difficult thing to assess. I find the electric utility coop model quite interesting in that respect. The coops that govern NGN are member-owned, and NGN has a coop structure as well.  In that structure, stakeholders have different return expectations than private enterprises. Stakeholders buy services from the coops, and have a say on excess income, in other words profits should be used. Members/users will vote on whether the coop will reimburse the users at the end of the year with the profits or reduce the rates for the next year. Coops may be ideally suited to deal with the affordability issue.   Q: The rural electrification program can be used as a blue print for broadband, and the coops had a specific role in there.   Greg: Exactly. The Obama administration has used phrases like "this is a down payment" to qualify the broadband stimulus program. One can anticipate that the broadband stimulus inscribes itself into a long term plan, funded by the Universal Service Fund,  RUS, e-rate or just appropriation by the Federal government on an ongoing basis, and argue that this is the start of an REA (Rural Electrification Act) for broadband.   Q: You mentioned that some of the electric coops that are part of NGN are already providing fiber services in a limited fashion, effectively providing the last mile. Once the middle mile is deployed, will they go back for more funding towards the last mile?   Greg: I am not sure about future funding, but coming back to your point, why would coops that are already providing service would feel the need to do something like NGN? There are two main reasons: 1.      The first is that providing those services, they were approached by customers outside their electric service area to provide that same service. The coop status limits to 15% the income you can derive from outside your member base, and violations could threaten the IRS coop status. So they cannot expand outside their own zone. 2.      The second reason, more importantly, is that the process of getting big bandwidth in that region was problematic: one, it is very expensive to get back to Atlanta for access to unlimited bandwidth and the other thing is diversity of routes: both coops have only one pipe going back to Atlanta or Charlotte, and no option for their customers to reroute in case of problem. Q: Thereby not being able to support mission critical business application requirements? Greg: Particularly in light of the economic development motivations for NGN. When you have to compete with other areas to attract new businesses, quality and reliability of service becomes essential in those proposals! There is an actual example where the region lost a prospect for lack of route diversity. That's a very direct example of how the infrastructure can help attract and maintain a healthy business base. Since the award was announced, we in fact got a call from an industrial park developer who wanted to know precisely where the fiber was going. Q: I assume Civitium will have some role in the project implementation phase. What do you anticipate are going to be the primary challenges to implement the NGN project? Greg: I think of one that is always at the top of my list. To make this work, ISPs have to be very responsible, run like a business, and have to make sustainable profits. But you have to balance that with the constraints that come with taking public money. That is a very delicate thing to do. The Feds and the states and other public organizations that fund these programs will want certain things that are in the interest of the customers of the network. NGN may have to decide what is in the best business interest of the network. For example, there may be requirements for open access, and that may not make good business sense. That's one example, but there are many other elements that can make that balancing act difficult to achieve.   Q: So far, we have talked a lot about the NGN project, I would like to talk about Civitium. As we mentioned, the company has evolved through the years. How different is it today, and how different is the process? Greg: When we first started, I think the company embodied a lot of the present administration positions. Therefore, I think all of the groups that were involved in the early broadband development have a very good intuition about what the Feds are looking for now.  A whole language and semantics have been developed around the issue. Where we're really different, though, is in the technology. Whereas we really focused a lot on mesh infrastructure originally, we're now doing work with various radio boards at the state level, we're looking at LTE and other broadband technologies, and we're working in the 700 MHz band, with clients with pre-LTE equipment that is self upgradable. We are doing fiber to the home designs and planning big regional fiber networks like NGN, and we are doing a lot of work in WiMax and pre-LTE equipment as well. WiFi is still a piece of the offering, but it is just one tool. What we've emerged as is a very mature company with a secret recipe, that combines business, technology and some bit of policy. Our customers are different as well. Historically, it was largely government. Now we have CLECs, ILECs, state authorities, EMCs, just a wide variety of customers. Q: Based on these early successes, are you contemplating advising for the second round on other broadband stimulus application projects? Greg: We're certainly open. We have been fortunate to have some really great clients, but we're certainly open to work with others. Q: What advice would you give to applicants for round two, to the extent that it is similar to round one, which is not guaranteed? Greg: My advice would be start early. Do not wait for the NOFA. If you wait for the NOFA to begin consideration of a plan, you'll be too late. It is advice for all kinds of grants. In this particular area, it is good to think outside the box. To me, there has never been more opportunities to set up some creative partnerships and use creative approaches to try to address the broadband challenges we face. Q: You mentioned a secret recipe that Civitium has put together. How secret is it, and if not too secret, what are the main ingredients? Bailey: That's a good question. I guess the secret appears throughout the entire relationship process, it is not just one thing. The secret really is that we have a lot of people that put their nose to the grindstone and really delve into the details. It's really just the thoughtfulness and persistence that we think embodies the firm. Q: Any other thought you would like to leave with our readers in conclusion? Bailey: One thing we did not mention and I think is quite important for the readers to consider is how they tie together engineering and financial work. Those two pieces are obviously very different, and the two groups almost never speak. Your engineering people are going to design and plan the implementation, your business people are in the meantime analyzing the subscriber base and running the numbers. We find that both sides experience changes through the planning process, over and over again. Given the compressed time line of the first round, and probably the second will be similar, decisions have to be made quickly across the lines, and it is almost impossible to keep the two sides in sync if the process is not already there to keep them in sync. We created an integrated broadband planning package that we are using now, and we are really delighted with it. It uses a financial modeling tool called Quantrix, and a lot of really big firms and banks use them. It is a very powerful tool, and we now have that integrated into the CAD and GIS systems that our engineering team uses. We can immediately sync between all the nuts and bolts from the engineering side with all the financial plans and documentation required by the Feds. This process is needed during planning, but also when running the business. Q: That brings up a last question: did the plan change from your initial application filing through the vetting process by the government? Has it evolved at all? Greg:  I will tell you that it did not. And it may be the reason why it was one of the first 18 projects to be awarded. When we went through diligence, with a team of consultants from Booz Allen representing the NTIA, they did a terrific job. We spent several weeks answering their detailed questions, and a lot of those questions would address an engineering issue that would also affect the financials. Our ability to keep those two in sync made the process much smoother. To give you an example, I mentioned earlier that project that was reengineered ten days before the deadline. I was doing the financials for that program, and when the engineers came to tell me they had to redesign the whole plan, that affected my calculations. The synchronization between the two sides made the changes almost easy! Q: Well, thank you again for making the time, and congratulations! back Related Items: • Matsuura Kikai Seisakusho Co. • W2i Announces 3rd Annual Best Practices Awards Winners • Wi-Fi Coming to Japan's Bullet Trains Next Year • Q&A with Brian Meffford, CEO, Connected Nation • 4th Digital Inclusion Roundtable: Summary • Webinar: How to Boost Broadband Adoption? Comments No records were found. Post new comment: Only registered users can add comments. Please Log-in

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