On this episode of Connected Nation, we talk with broadband leaders across the country including the founder of SHLB and those leading Puerto Rico’s Broadband Program.
Topics ranged from solving the ‘people problem’ the broadband industry is having right now to changing how federal officials approach awarding billions of dollars in funding. And it all happened at a little event dubbed “Broadband and Brews.”
U.S. Broadband Summit website - https://www.usbroadbandsummit.com/
Jessica Denson, Host (00:00:08):
This is Connected Nation, an award-winning podcast focused on all things broadband from closing the digital divide to improving your internet speeds. We talk technology topics that impact all of us, our families, and our neighborhoods.
On this episode, we talk with broadband leaders across the country, including the founder of SHLB, and those leading Puerto Rico's broadband program topics range from solving the people problem the broadband industry is having right now to changing how federal officials approach awarding billions of dollars in funding. And it all happened at a little event dubbed Broadband and Brew.
I'm Jessica Denson and this is Connected Nation.
We're having a little fun tonight after the US Broadband Summit. We're at Broadband and Brew, which is put in by Sanborn and Connected Nation. And I am talking with John, with SHLB. Correct. Tell me your full name and what your role is at SHLB.
John Windhausen, Founder, SHLB Coalition (00:01:00):
Well, I'm John Wind Hausen. It's very nice of you to invite me to do this interview. I'm the Executive Director of the SHLB Coalition and the long name is Schools Health and Libraries Broadband Coalition. And I founded the organization about 13 years ago.
Jessica Denson, Host (00:01:17):
Oh, well, I buried the lead. I should have said, I'm talking to the founder. So tell me what led you to found such an important organization that deals with schools and libraries and that type of thing?
John Windhausen, Founder, SHLB Coalition (00:01:30):
Well, I've been working on telecom and broadband policy my whole career. I started out at the FCC and then on Capitol Hill, worked on the Telecom Act of 1996, and all along we were trying to make affordable telecom and broadband services available to everybody. So when the Gates Foundation approached me in 2009 about putting a group together, I was all in because I thought, this is great, because traditionally the big companies divide the world between business and residential, and they leave out the needs of the anchor institutions. So there was a niche there that we've stepped into fill to be the voice and so glad we did because schools, libraries, healthcare providers, provide so much essential service to their community. And more and more today it's based on broadband technology. So distance learning, you need to reach kids, provide them internet access at home so they can do their homework. Telemedicine, patients need to be able to access their doctors over a broadband link. So really we're another kind of digital divide organization. We need to solve that digital divide, but it needs to be everybody engaged in this effort and SHLB just plays one role, but we're an essential piece of that puzzle.
Jessica Denson, Host (00:02:48):
So expand upon that role, what exactly does SHLB do for those organizations? Are you a voice for them? Is it a partnership type thing? How is the organization set up?
John Windhausen, Founder, SHLB Coalition (00:02:58):
Well, we're a voice, that's a good word to use. We're an advocacy organization, public interest organization. We're not a grassroots organization, so we don't provide services in the field to individual schools and libraries, but we do aggregate their voices and their needs and convey those needs to the policymakers. So for instance, when Congress passed the IJA couple of years ago and created the bead program, that big behemoth, $42.5 billion, it is a behemoth broadband program that statutory language mentions anchor institutions 29 times, and that's because of our work. So we built into the fabric of that legislation that yes, anchor institutions are supposed to be able to get access to gigabit level of service, and a lot of most schools have gigabit today, but most libraries do not. Most healthcare clinics do not. A lot of community colleges do not. So we are trying to promote policies that are going to steer that investment to make sure that they're not left behind as these networks are being built.
Jessica Denson, Host (00:04:04):
I've been all over the US talking to people about broadband access and the conversation really changed when the pandemic came. People understood, oh, I can't go to the hospital. I need access, or My kid can't learn from home if I don't have access, or the only place I used to go is the library and I don't have access. So explain how the conversation has changed around having to ask for that, what the anchor institutions need. Is there more of an understanding now than there was before?
John Windhausen, Founder, SHLB Coalition (00:04:36):
Much more. Yeah. It's really brought home how essential broadband access is, whether you're at the school, at the library, or at home or in the park, basically broadband should be available to everybody. It should be ubiquitous, it should be affordable, and it should be high speed. And we don't have that today, and we were suffering because of that. So this is not a nice way to say this, but we need to be acting now so that we're ready when the next pandemic comes, we'll be better prepared. But the other thing that was really striking to me during the covid days when teachers had to be preparing online lesson materials for kids who were at home, but oftentimes 30 or 40% of the school children didn't have access at home, not only did it mean that they couldn't do their homework assignments, but the teachers had to stop providing online lessons to everybody because it was inequitable.
And so that harmed all students then suffered because of the lack of broadband access to that 30 or 40% of home. So we'd need to clear that up. One of the best things that we're doing, and I know Connected Nation is a part of this too, is trying to enable schools and libraries, not just to be consumers of broadband service, but also providers broadband service, putting antennas on the rooftops of the buildings and sending out wireless broadband signals to those low-income homes. That could be a great enormous benefit and connecting a lot of homes that wouldn't otherwise have a connection.
Jessica Denson, Host (00:06:11):
I think when you talk about lack of access, schools is an easy thing to talk about because you talk about the kids, the millions of children that are left out, but libraries, libraries really play an important role, especially in smaller communities or urban communities where they're low income. Can you talk a little bit about that, why it's important that these libraries are connected?
John Windhausen, Founder, SHLB Coalition (00:06:32):
Oh, it's absolutely important, and libraries, you're right, are key providers of digital literacy training. And if you think about that, that sort of goes along with a very basic function of a library and what they do, they treat their individual patrons on a patron by patron by patron basis. That's what they do. They provide that guidance for people. Everybody who comes in the door gets equal treatment at the library. And so it used to be finding books and reference materials, but more and more people are coming to the library to find out, how do I use this technology? How do I get on the internet? How do I access the apps and the programming material that they need for their healthcare or to find a job or start a new business? And that's what libraries specialize in. That's their sweet spot. So they are so well positioned.
What they really need are more resources and they need to be able to hire more people to do this work because the structure and the mission of the libraries is already there. They just need more people to be able to carry that out. And that's why we have been such strong supporters of the Digital Equity Act that also passed Congress as a part of that IJA. And that money hasn't started to flow yet, but it will be starting to flow next year and then the year after that. And libraries in a great position to benefit from those federal dollars, match them up with their state and local dollars, and they can really be an essential piece of solving that digital divide on an individual by individual basis.
Jessica Denson, Host (00:08:05):
Okay. Let's talk about that. The third piece, the healthcare system and for rural areas where places may not have specialists or hospitals may be closing down or I've heard that is an issue, and I've also heard that just even doctors monitoring devices that patients wear, it's really important to have that access. Is there an area that SHLB is really focusing in on or are you hearing it's just a wide bird that's needed with telehealth and in the healthcare industry?
John Windhausen, Founder, SHLB Coalition (00:08:37):
Well, to be honest, I am not an expert in the healthcare field. I just know about the need for broadband connectivity. And others are telling me that the broadband needs to be at a certain level at these clinics to be able to engage in remote patient monitoring and diabetes care. But it's very essential to have a high quality connection that doesn't get interrupted by shared use or degradation of that signal. I mean, if you're monitoring somebody's heartbeat, you need to have that constantly on. You can't avoid to have interruptions to that service. But I remember talking to some of our healthcare networks that are SHLB members, and they said during the pandemic, it wasn't that telemedicine jumped 20% or 50%, they said telemedicine was jumping like 200% or 300%.
Jessica Denson, Host (00:09:32):
It was crazy.
John Windhausen, Founder, SHLB Coalition (00:09:32):
Yeah, it was crazy. Yes. And now post Covid, some of that has relaxed, but a lot of it has not. The demand is still very, very high, much, much higher than it was three or four years ago because now it's become kind of the thing to be able to correspond and meet with your doctor online. I just set up an appointment with my doctor just literally two hours ago, and they were offering me dates and times where I could come into the office and other dates when they only do online appointments. That is a sea change in how we're delivering healthcare, and it makes more sense for the patients, so you don't have to drive an hour or two to meet your doctor. The doctors can see more patients every day. So in the long run, it's changing the economics of the business of providing high quality healthcare,
Jessica Denson, Host (00:10:20):
Just even for ease of care. As someone who uses, I use telehealth a lot now, just be able to have access to my doctor without having to take off work without childcare, that type of thing. So last question, closing question. Why was it so important to you to be a part of SHLB and to start the organization? What is it in you that really caress in that way?
John Windhausen, Founder, SHLB Coalition (00:10:47):
Well, I've had a public interest heart right from the get go. I mean, that's why I went to law school in the first place was to practice public interest law. And so I feel so fortunate that I've been able to have a career. I never was all that comfortable with the idea of just having a career that made a lot of money and worked for big companies to help them profit. My goal for myself and my vision was to provide access to technology and put it in the hands of people as a way to democratize the technology and make it more widely available because I'm really concerned, still concerned about the power of these multinational corporations trying to dictate the technology. Now, we are not, we want them to invest, but we have a national broadband plan that was adopted in 2010, and it called for a lot of reforms by the year 2020, and we didn't get there.
So now is the time when we need to change the dynamic and say, look, the private sector has done as much as it can do, and we appreciate that they've invested a lot, but to really get to the remaining 20% of people who don't have broadband and the anchor institutions, we really need to try other approaches. I feel fortunate that I'm able to play a role in trying to make the United States a more connected nation and solve the digital divide for millions of people. So I feel very proud and honored to be able to serve that way.
Jessica Denson, Host (00:12:21):
Well, your legacy is very much intact because all I've ever heard is good things about SHLB and keep up the good work, and thank you so much for
John Windhausen, Founder, SHLB Coalition (00:12:29):
Your time. Well, you're very kind. It's my pleasure. Thanks for inviting me to talk to you.
Jessica Denson, Host (00:12:32):
So I'm at the Broadband and Brews event, and I have run into someone I know from Connected Nation Days, Tom Stevenson, who has now gone to the other side. Am
Tom Stephenson, Millennium Broadband (00:12:41):
I right? Yeah, working back in the private sector. Yes.
Jessica Denson, Host (00:12:45):
Tell our audience who you're working for
Tom Stephenson, Millennium Broadband (00:12:47):
Now. I'm working for Millennium. They're a material sales company, basically fiber optics. So my job is to work with our clients on the broadband funding, the funding side of it. And so I work with our clients. I line up good grant writers, so they want a lot of money.
Jessica Denson, Host (00:13:09):
And you know what you're doing. You used to be a broadband solutions manager with Connect
Tom Stephenson, Millennium Broadband (00:13:11):
Nation, correct? Yes, I did. So I've got a lot of experience from Connected Nation working with communities, so I'm well known in the field, so I'm doing quite well. And you're
Jessica Denson, Host (00:13:22):
In Michigan still, are
Tom Stephenson, Millennium Broadband (00:13:23):
You? I'm all over the country now. Oh, you are? I'm working all over the country. So connected nation's well known across the country. So saying from Connected Nation helps out a lot.
Jessica Denson, Host (00:13:36):
So I mentioned that because a Michigander, and we always would talk about how beautiful Michigan is. Did I say Michigander? Right? You looked,
Tom Stephenson, Millennium Broadband (00:13:43):
You said it right? You said it right.
Jessica Denson, Host (00:13:45):
So Millennium, you guys work in a different way. Explain what the role is with Millennium in the space of broadband. You're not a provider,
Tom Stephenson, Millennium Broadband (00:13:55):
Right? So no, we're not an actual service provider, but we provide the materials. So looking at all the grand funding and trying to get build out in rural America, our owner, Kyle James, James, Kyle, excuse me, he decided that we needed to help some of these smaller providers who's going to build out into rural areas. So we're helping with not only getting grant funding,
Jessica Denson, Host (00:14:17):
You'll have to edit that,
Tom Stephenson, Millennium Broadband (00:14:21):
So not only the grant funding, but also look at the engineering side of it and help 'em build out the networks more efficiently. And then also we have AIMF or MIF fund, which is we help with the gap, the funding. So if the provider needs a letter of credit or something like that, which we know now is rather difficult for the smaller providers, but those are the ones that build out the rural areas. There is a need. So
Jessica Denson, Host (00:14:50):
Because there's so much demand, is there a need for building the, are we lacking in equipment and people who know how to do this and that
Tom Stephenson, Millennium Broadband (00:15:00):
Type of thing? Yes, we are. So there's a big shortage. So one of the things we do also for the smaller providers, we also, those that are going from fixed wireless to fiber optics, we also have a leasing company, so we sell the equipment for a lease to buy. So creating those opportunities for these smaller providers is basically what I'm doing. And like I said, I'm helping them go after a lot of grant funding. I'm lined up with a lot of good grant writers with high success rates that we don't charge for, but we're just wanting to see, make sure that folks do well in this environment that we we're currently in. And
Jessica Denson, Host (00:15:36):
It's a lot of money on the table right now, billions and billions of
Tom Stephenson, Millennium Broadband (00:15:38):
Dollars. Yes, I'm working with the company, and that's one of the things I track. So currently I'm estimating it at roughly between now and 2030, about 120 billion in investment. And then that's not, some of it's including private investment, so that number's actually going to go up, but we need it for broadband.
Jessica Denson, Host (00:15:59):
I recently looked up like a million compared to a billion and a million seconds is like 12 days. A billion seconds is 32 years. So that just tells you how much money that
Tom Stephenson, Millennium Broadband (00:16:11):
Is. Oh, it's a lot of money. It's a lot of money. But I do think that looking at the incurred environment with the cost and everything else, we're still going to need another little push at the end. So we're going to get most of the mission done, but I don't think all of it,
Jessica Denson, Host (00:16:25):
I've heard that again and again, people don't realize how expensive and how difficult some of the areas that we need to reach
Tom Stephenson, Millennium Broadband (00:16:32):
To be. Yes, it is very expensive. And when I'm working in states like Montana and Oregon, Washington, Idaho, even though they've received 700, 800 million, they know for a fact that to reach all their population, that's not going to quite do the job, not at the speeds and the type of technology that we need.
Jessica Denson, Host (00:16:53):
So did you attend some of the US broadband Summit meetings today?
Tom Stephenson, Millennium Broadband (00:16:57):
Oh, yes, I did. A lot of 'em. They're very, very informational. I recognized a lot of folks on those councils, so yes.
Jessica Denson, Host (00:17:04):
Yeah. Anything interesting that you thought came out of it?
Tom Stephenson, Millennium Broadband (00:17:07):
Well, I'm looking at, with our clients, we're looking at the actual cost per location and the amount of funding that's going to require, that's one of the things I picked up on is that working in the urban areas is one thing, but working in the rural areas is an entirely different subject. So I can see this effort continuing on personally myself after working in this field for 12 years. An additional maybe the 30, 35. So we're going to be busy for a long time.
Jessica Denson, Host (00:17:38):
And what ultimately, last question, I promise. What ultimately would you and Millennium like to see happen?
Tom Stephenson, Millennium Broadband (00:17:45):
Our boss would like to see all our kids hooked up to wifi. We like to see everybody access to telemedicine. And so that really sank home. We're for, he's a Wisconsin company, and I worked in northern Michigan, and we felt the pain during covid and all the kids that couldn't go to school, all the people that didn't have access to healthcare. So that's probably the biggest thing that we're looking to do. I mean, it's not only personal for me, but also personal for our company CEO.
Jessica Denson, Host (00:18:17):
Well, I love talking to you, Tom. We miss you at Connected Nation, but I'm glad to see you're still out there. Oh
Tom Stephenson, Millennium Broadband (00:18:23):
Jessica Denson, Host (00:18:24):
Fighting the good
Tom Stephenson, Millennium Broadband (00:18:24):
Fight. Yes, I am. Thank you. Thank you. Appreciate it.
Jessica Denson, Host (00:18:27):
I'm at the broadband and Bruise event, a little meet and greet that's happening after the US Broadband Summit. It is Wednesday, November 15th, and I am standing with Phil Makris. He is a lawyer and he's had a unique role in what's going on in the broadband space right now. Welcome, Phil.
Philip Macres, Klein Law Group (00:18:42):
Hey, thanks. It's great to be here and great to be part of your discussion. Yeah,
Jessica Denson, Host (00:18:46):
I'm excited to talk to you about what you've done. We chatted a little bit earlier. Share with our audience first, some of your background and what brought you to this point.
Philip Macres, Klein Law Group (00:18:58):
That sounds great. That sounds great. I'm an attorney. I'm here in dc. I'm with the Klein Law Group, and I've been practicing telecommunications law for quite a long time since I graduated law school. I worked for a period of time with swidler, which has turned into Bingham. McCutchen is now Morgan Lewis.
But I left there and I met a boutique firm, Klein Law Group. And I've been recently been really helping out broadband providers, ISPs, relative to their broadband grants, applications, regulatory issues that they're dealing with, whether it be through RDOF, rural Digital Opportunity Fund at the FCC treasuries, ARPA funds, whether it be capital projects, state local fiscal recovery funds, along with USDA's program, with reconnect Community Connect. And then here the biggest program, which is N tia's Bead Program, middle Mile programs as well.
Jessica Denson, Host (00:19:53):
And that alone is 65 billion.
Philip Macres, Klein Law Group (00:19:55):
Huge, huge amount, huge amounts. And
Jessica Denson, Host (00:19:58):
With these, are you finding with a lot of, especially if you deal with any smaller providers, that this is a very complicated process to apply for these funds and they really need help?
Philip Macres, Klein Law Group (00:20:07):
Oh, absolutely. Absolutely. The NTIA program, they have the best intentions in mind, but they really just, it was a pile on of all the requirements that they did it. And I first noticed some of the serious problems that they had was during the Middle Mile program. So the Middle Mile program, it started when they issued the Notif os, which was back in May of 2020 or so. The Middle Mile program, the deadline was at the end of September. Some people had an extension, but that was the deadline. And the BEAD program has been percolating and they're evolving and they've been their requirements. But we saw the baseline requirements associated with, Hey, how you doing?
Jessica Denson, Host (00:20:54):
We're being interrupted. Who are you, sir? I purposely did that. I purposely did.
Philip Macres, Klein Law Group (00:20:58):
Yeah. Good to see you, Kevin. Alright, so yes, going back to what I was saying is that yes, we know the baseline requirements through the notice of funding opportunities through both of the programs, middle Mile and the BEAD program, the Middle Mile program. So the application started, I was looking at that for a smaller provider. We were looking at an opportunity, which could have been about a $60 million build, but we looked at what the letter of credit requirement was and the match requirement was, and it was a match of 30%, a letter of credit of 25%. And basically for that, you're looking at a $30 million you had to have upfront for your letter of credit and your match. That's huge. And the letter of credit requires that it'd be cash collateralized. So you have to have the money in the bank. I mean, there literally has to be cash in the bank, it's in escrow. Explain
Jessica Denson, Host (00:21:49):
To the average person how difficult that can be for a small provider to have that amount of money.
Philip Macres, Klein Law Group (00:21:55):
It's huge. You just don't have that kind of money sitting around constantly doing builds, and you're constantly using your money to build out to new locations, getting reimbursed by the client or the government, whoever's paying you. And there can be a delay on that. So it's not like you're sitting on this heap of cash that can be just put into a bank account and put into basically escrow with a bank to sit there while you do the build and it's just kind of bananas.
Jessica Denson, Host (00:22:26):
So you came up with a solution, correct.
Philip Macres, Klein Law Group (00:22:28):
Well, I first, I approached NTIA on the issue and I said, this is not realistic. And they looked at me and they said, well, maybe your company needs to be a little bit financially stronger to do that. And I said, it doesn't make any sense. Companies don't do this. Small companies and large companies, it doesn't make sense to have that much money put away in a letter of credit, just cash sitting idle in a bank.
Jessica Denson, Host (00:22:56):
And if I may just interject for a moment, I've talked to a lot of small providers across the countries, and they're everybody from community members who've decided to start one, to co-ops to, I think people get this thought in their mind that they're all Verizon or they're all T-Mobile and they have a little more room to maneuver, but that's not necessarily true.
Philip Macres, Klein Law Group (00:23:18):
That's correct. That's correct. If you take this just from a, it's a relative issue. If you're Verizon or say Comcast, and you win $2 billion and you're going to get 30 states and you're going to do all these great things in deployment, I pity the individual that has to walk into the CFO's office and say, Hey, we won these $2 billion in grants, by the way, I need 500 million a match and I need 500 million in a letter of credit. So you're
Jessica Denson, Host (00:23:48):
Saying even with the larger ones, it's a difficult thing
Philip Macres, Klein Law Group (00:23:51):
To do. Good luck with that conversation with the CFO. I'd love to be a fly on the wall, but you might see a shoe flying across the table at that point in time because that's just not how they do business, and that's not what the shareholders expect. They can probably figure it out, but that's not a good way of utilizing capital for these projects overall. So given these issues and given the push to back I was receiving, we went and we met with our congressman, Congressman Andy Harris, and he sent a letter to the Secretary of Commerce saying there's issues with this letter or credit requirement and that they really need to reconsider it and look at alternatives. And not much really happened after that. We sent letters to Senator Thune, and then we had webinars. We were in conferences and panel discussions and trying to educate the community, even met with the legal advisors, the Secretary of Commerce, and things really weren't evolving.
It just seems like people were looking at me and saying, yeah, I'm so sad, too bad. And that was not the answer we were going to take, but it didn't happen until the June 26th when they N-T-I-M-E, this great announcement, here's the $42.45 billion. We're so excited. We're giving all this money to all the states and we're allocating it this way. You should be excited too. And everybody's excited and I'm going, why am I excited? Why am I excited? If I can't participate? It's like, Hey, they're excited about this big prom, but I don't have the money to be able to get the ticket to even go to the dance. So at that point in time, sent out an email to a bunch of people I had been talking about that had concerns with it, that shared these concerns, and we took the next step forward. We had on the group, we had John Win Haem from SHLB. I
Jessica Denson, Host (00:25:53):
Talked to him earlier. Oh,
Philip Macres, Klein Law Group (00:25:54):
That's fantastic. We also had Connect Humanity as well. They assisted in this effort, Gigi. So I had spoken with her and I said, listen, we want you American Association of Public Broadband. And she joined the effort. And from there just snowballed. We had a bunch of people from municipalities and other stakeholders, and they realized that this was a problem because not only for ISBs, but also for municipalities, some of them getting that letter of credit was difficult. And some of 'em couldn't even do that. They had to get a change in the law. They had to have a referendum in order to have to deal with this letter of credit. So it was causing a problem across the board because of this effort that we pulled together. It came together, a letter was sent out, and that was on September 6th from all these stakeholders. We had almost 300 stakeholders.
That's fantastic. Sign onto it. And it was great. Once we did that, a number of other associations started to lift up their eyes and take attention to this issue, and they started sending letters out to the Department of Commerce and to NCIA. And at that point in time, after this letter went out, we said it was going to be really problematic to the small businesses, the minority businesses, the woman-owned businesses. They realized that this was a big problem for the program because we're trying to deploy fiber throughout the whole country. Not everybody is going to be in the right place who wants to deploy to some of these areas. So really, it's a collective effort to get everybody involved. And so NTIA, they recognize the issue and they took a very divisive action, a quick action, and jumped on it. And within less than 60 days, so we sent this letter September 6th, and by November 1st they made an announcement. And in that announcement they allowed alternatives to letter of credit. So we're very happy with those alternatives.
Jessica Denson, Host (00:28:02):
I remember that coming out as a press release just two weeks ago from the time that we're talking right now, and sent that out to all of our staff. Everybody in Connected Nation needed to know that. So important, such an important part of that. That was a whole, if you will, that needed to be closed.
Philip Macres, Klein Law Group (00:28:19):
Jessica Denson, Host (00:28:21):
Just for my audience sake, if you were standing here with Phil, you would get a sense of his idea that this was an injustice almost that needed to be fixed?
Philip Macres, Klein Law Group (00:28:31):
Yeah. He seemed
Jessica Denson, Host (00:28:31):
So animated about it,
Philip Macres, Klein Law Group (00:28:34):
Jessica Denson, Host (00:28:35):
Matters to you.
Philip Macres, Klein Law Group (00:28:38):
It just financially didn't make any sense. The numbers didn't make any sense. And they tried to look at me straight in the face and try to say that the world is flat. And I was like, no, the world is round. This is not how businesses operate. And so when they came back and we said, listen, do some performance bonds address the letter of credit. Now the letter of credit, right? It has to be AB minus or above rated bank. And well, that bank, if you go in the rural areas, usually have credit unions. And they didn't include credit unions in this. So the folks that know all these rural areas, they're not even part of this program. So that was the first alternative. They just said, listen, we can include credit unions and recognizing that AB bank, it's B maybe seem like nothing. But you know what?
In 2023, Wells Fargo has been reduced below AB minus by the Weiss rating, and so has in Bank of America and so have in other banks. And it's unfortunate, but Weiss Rating has an algorithm. It spits out this algorithm and it spits out a grade. So the banks that are out there, that pool of banks is reducing, is becoming smaller just because of this Weiss rating. So fortunately, the credit unions, they give them credit unions, that's an alternative. They also allowed performance bonds in lieu of a letter of credit, but the performance bond has to be for the full amount of the grant, whereas the letter of credit's only 25% of the grant amount. So if you had an $8 million grant, you'd have a $2 million. A letter of credit performance bond would have to be $8 million. Right. They also allowed a staggered reduction of the letter of credit and performance bond based upon your completion of milestones.
So that's good too. So that allows you to reduce your letter of credit and performance bond over time as you complete. And then the last option that they made available is limiting the letter of credit or the performance bond to 10% of the grant. So that's huge, right? Subject to reimbursement, no more than six months at a time. So it has to be, reimbursement requests have to be less than six months, which makes perfect sense. I don't think they want to see one big request for an reimbursement for over six months and have to deal with that. So that was the big thing as a kicker, the NTIA said, listen, we're open to providing more guidance if we see there's more issues here. And state broadband offices, if they see alternatives that they need, they can apply for waivers and we'll be receptive to considering those options. So they showed some flexibility. They're not going to be really dug in relative to some of these requirements. So state broadband offices, they kind of have the nod there to maybe ask if they think they have an approach that might be a good approach for their state in their program.
Jessica Denson, Host (00:31:48):
And so how do you feel about it ultimately? Do you think it really has, it's going to open it up to a lot more providers, a lot more groups. What do you feel ultimately you've accomplished with that
Philip Macres, Klein Law Group (00:32:00):
Or that? Oh, it's huge. It just opens up the opportunity for all these providers to participate in this program that otherwise just saw this program as just too high of a price to pay in order to get involved. I mean, because when you have to have that letter of credit, that's a lot of money you have to have in the bank.
Jessica Denson, Host (00:32:20):
So before, a lot of organizations are just like, well, I can't even claim, I can't even try, because they couldn't do that. But now that's opened the door for them,
Philip Macres, Klein Law Group (00:32:30):
Correct? Correct. You could have a line of credit with your bank, but if you just say you had a line of credit for say, 5 million, and then all of a sudden you have to take that money and put it into a letter of credit, you're using up all your line of credit for letter of credit, and then you're paying interest on your line of credit for a letter of credit, and you're paying the fees annually for the letter of credit. The numbers get crazy, but they, there's a lot it. It's very expensive.
Jessica Denson, Host (00:32:55):
So are the clients you're working with, I know you probably can't tell me exactly anything, but in general an overview, are they starting to now move forward that move that forward?
Philip Macres, Klein Law Group (00:33:06):
Well, knowing that it is financially doable, we can start looking at the proposals and the opportunities and the programs in the states that we're looking at and designing what we're going to do for next steps relative to the construction, the labor requirements, the cybersecurity requirements. There's a whole slew of requirements for every state. But if you know you can't participate, why are you going to spend all that time and effort, money gearing up for a program that you never could participate in, but now you can't?
Jessica Denson, Host (00:33:42):
Do you have any words of advice you would offer anybody who's any group that's trying to get involved in this now?
Philip Macres, Klein Law Group (00:33:49):
Yes. To not stay on the sidelines and be passive, engage, get involved, reach out to me or reach out to the groups that are working on this. Because at the end of the day, I only had a small group, and I can't tell you the association, some of them just, this wasn't a high on their list. And people may think that this has worked itself out, but sometimes these things won't work themselves out. So you have to get involved and you have to talk and you have to make some noise. And once the spotlight's put on it, hopefully you can get change. And that's helpful to everybody because you're going to save your company tons of money. And what did it cost? We had to circle the wagons. We had to get this out there, but my hats off to NTIA. They had to turn this program around real shortly, but they did some things that were kind of a little bit too much of a stretch for folks, and they pulled it back a little bit and they make it more doable for the stakeholders that are interested, and that's for small and large.
Everyone benefits from this, and we'll see maybe more modifications and guidance from NTIA. And like I said, they show that they will be flexible relative to what the request is. And so I'm excited for this one step on this front. And there continues to be other issues that we're working with, like working on. Other issues we're trying to do is the implementation of this designing the performance bond, what it's going to look like for what it looks like for a 10%, having a 10% letter of credit or line of credit or a letter of credit, 10% letter of credit is fine, but the 10 performance bond relative to a grant, and that hasn't really been designed yet. And we're working with the surety companies to see how would a 10% performance bond look like at the end of the day? Because typically a performance bond is for the whole build, or at least the grant amount, more than 50% of the construction. So they're in the midst of designing it. Other things that we're working on relative to the tax treatment of these grants right now, when you get a grant, you get the grant money, but you also get tax on it. Does that make sense? Yeah, no,
Jessica Denson, Host (00:36:12):
Philip Macres, Klein Law Group (00:36:12):
Makes no sense. So we're giving ISPs money to go build in these rural unserved areas,
And then we're taxing and then we're taxing them. Okay. So that's a big initiative. Senator Warner has S 3 41 that's out there, but it's basically found its way in the back burner. And we're trying to put spotlight on that to allow ISPs and everybody to have more flexibility and to see how they want, how it should be treated. Somebody wants to get a tax and has accelerated depreciation or other issues. We want them to have the flexibility. So that's just another initiative among other things. And I'm helping out RDO winners too. So there's a lot of issues on the RDO F side. They still have the letter of credit there, and we're working through that, but you just can't stand down and just look at it when the numbers don't make sense. Sometimes you have to put some attention to it and let the regulators understand what the issues are.
And hopefully they'll come around, they'll recognize that here, we want to help you resolve the problem so you can focus on a build and bring your broadband and high-speed broadband to these rural unserved areas versus sitting there spending your money trying to figure out how you're going to fund this letter or credit and do all this paperwork. We just want to build, we want to bring broadband, not have to scratch our head saying, okay, how do we manage this thing, this next regulatory requirement? So where we can do the fixes, we try to do 'em one step at a time.
Jessica Denson, Host (00:37:45):
Well, I feel like that we need to have some follow-up interviews on this issue down the road. So thank you so much, Phil, for explaining that to us all.
Philip Macres, Klein Law Group (00:37:52):
Hey, thanks. I know that was quite a long No, it was fantastic dialogue, but narrative. But heck, it's a long story. Good story, good result first now, and
Jessica Denson, Host (00:38:03):
I can tell you really care about it.
Philip Macres, Klein Law Group (00:38:05):
I do. I do. I have some great clients. And just watching this happen and looking at something like this that just seemed like an injustice that would've not been addressed. But for us all coming together as a group and our group coalition and just filing that letter and getting in front of NTIA and putting a spotlight on it, so very
Jessica Denson, Host (00:38:29):
Happy. Well, thank you so much. So
Philip Macres, Klein Law Group (00:38:30):
Thank you. Okay.
Jessica Denson, Host (00:38:32):
And so now I am talking with James Norton is with ALMAN Consultants.
James Norton, Talman Consultants (00:38:37):
How are you? I'm
Jessica Denson, Host (00:38:38):
James Norton, Talman Consultants (00:38:39):
Good. Thanks for having me.
Jessica Denson, Host (00:38:40):
Thanks for coming. For joining us. We're at this little meet and greet, broadband and Brews with Sanborn and Connected Nation, and it's a pretty good little mix of people. A lot of fun. Did you go to the US Broadband Summit today?
James Norton, Talman Consultants (00:38:55):
Yes, I did.
Jessica Denson, Host (00:38:56):
You learn anything good?
James Norton, Talman Consultants (00:38:58):
I did. We have a massive gap in employment opportunities. We don't have people coming through the ranks, and that was one of the big realizations that everybody in the room saw it. And we have a lot of money to deploy and we need people to deploy. So we have a people problem right now.
Jessica Denson, Host (00:39:17):
So before, let's get back, come back. Let's put a pin in that and come
James Norton, Talman Consultants (00:39:20):
Back to Yeah, pin it back. Yeah, I jumped right into that.
Jessica Denson, Host (00:39:22):
That's all right. That's the one you care about. I get it. Talk a little bit about what Tom and consultants does.
James Norton, Talman Consultants (00:39:29):
Tom and consultants is an engineering consulting firm focused primarily on fiber deployment, small cell and underground deployment and aerial all throughout the country and our headquarters in Chicago. So anything under the sun fiber, we're in it.
Jessica Denson, Host (00:39:44):
You're actually in the ground building it and making it happen. The infrastructure,
James Norton, Talman Consultants (00:39:49):
We work with the contractors from the ISPs and different wireless companies and that kind of thing. And we do the engineering and we acquire the permits. So we are well aware of the aerial issues and the shot clock and all that kind of stuff that gives everybody consternation.
Jessica Denson, Host (00:40:09):
So you were already like, I want to talk about the people problem, Jessica. Yes. So let's talk about the people problem. Sure. You were telling me earlier when we were chatting that you yourself were building it and working in the field, building broadband, and now you're part of the lead of your company. Yes. But there's this gap,
James Norton, Talman Consultants (00:40:28):
Jessica Denson, Host (00:40:29):
That we may not see just yet, but in five years. Explain that.
James Norton, Talman Consultants (00:40:33):
Yeah. So right now you have a lot of folks that have been in the industry 30, 40, 50 years doing it. We've kind of learned by doing a lot of that. I call it the wild west of telecom in the first 20 years of the century. But folks are getting older and telecom's a fast-paced industry. And when folks are done, they're done. So my concern is as folks are done, how are we going to replenish that workforce and that massive mind gap of information? And I just see it across the board from municipalities moving on, from people retiring that review plan sets and understand the people doing the work and that trust level on that level. But also in the field, you don't know what you don't know. And when you're building broadband underground, no matter where it is in the west coast, centrals Plains, east Coast, whatever, low lying areas, there's so many challenges engineering wise that folks need to understand how to build it. And now we're going to deploy a massive amount of capital. How many experts do we have?
Jessica Denson, Host (00:41:40):
So is building broadband infrastructure somewhat like an iron worker where they really need to train with somebody who's done it?
James Norton, Talman Consultants (00:41:49):
Absolutely. I learned by doing, and the one idea that I've had is we don't have any universities that have a telecom engineering department to learn how to, from the, how does it work, what does the equipment we don't have that you learn by doing. At Talman, we have our own training program for how to map utilities and to show the gas line, the electric line, the sewer, the water, and those are things that can affect people's livelihoods. If you hit a gas line, gas goes, boom, that's bad. So that's what I'm saying. There's actual real world issues that could happen if you don't understand the risk going forward. And industry right now, we're fine, everyone knows what we're doing, but as you see this growth, how is this going to be supported as we grow as a industry?
Jessica Denson, Host (00:42:46):
Was there some talk about solutions or what needs to happen now?
James Norton, Talman Consultants (00:42:48):
Oh yeah, absolutely. It's very brainstormed. Is that a word? I don't
Jessica Denson, Host (00:42:53):
Know. Yeah, brainstorm is, yeah,
James Norton, Talman Consultants (00:42:54):
I think you see it. I've talked at multiple shows with different people, high level people, and it's like we're all in the same headspace. We see the issue, but how do we solve it? Is it government funded for a solution with the local states, universities, municipalities, co-ops, ISPs, what have you. There's a lot of ideas you can throw out there, but we need people, a lot of people, and where do we find them? I don't know.
Jessica Denson, Host (00:43:24):
So there's probably a lot of people don't even know that they can consider this as a career.
James Norton, Talman Consultants (00:43:29):
Jessica Denson, Host (00:43:30):
Right. And do you think since you worked in the field, do you feel like it can be a very good career?
James Norton, Talman Consultants (00:43:35):
Absolutely. I talked to folks a lot. I traveled throughout the country and if someone wants to talk to me about engineering, I'm like, I would absolutely go into engineering or telecom or the trades for telecom and just doing the nuts and bolts of it. There's opportunities for the rest of your life and it'll pay well and you'll learn a skill and you'll have it forever. And there's no way to train except by learning right now.
Jessica Denson, Host (00:44:01):
And what about the technology? Do you see, right now we talk about building fiber, we talk about there's a lot of underground stuff, there's underwater stuff. What do you see as the future of this?
James Norton, Talman Consultants (00:44:14):
Well, obviously with solving the latency issue and making sure we can real time talk, I mean, obviously with healthcare you could save a lot of time and effort with having your virtual doctor office visits and having the vitals right there on the screen for the practitioner and that kind of thing. But I mean, just safety in general just wired. To me, it's like the big charge of this entire program is to get the folks that don't have internet into their home that raises the bar of information learning. And think about it, if you have access to internet, you have access to every book in the world. So isn't that how you learn by reading and comprehension? So that's kind of where I see where we have to solve this problem during the next go round of funding because that's our, as telecom people, we have to solve it. But we have a lot of work to get there.
Jessica Denson, Host (00:45:09):
So before I interviewed Phil, the two of you were talking and he was talking about having kind of like a NASCAR infrastructure laying pick crew. I didn't quite understand it. Well, you said that's a great idea. What is the idea that y'all were talking
James Norton, Talman Consultants (00:45:22):
About? I think I trying to recollect that, but yeah. So basically I think he's saying is a fast track of a permitting understanding. So many projects going on, the municipalities reviewers of drawings to get an approval are inundated by this work already. And we haven't really haven't even allocated bead funding yet. So that was just arpa, whatever. But so we're like, how can there be a fast track for folks that are competent, almost like a stress test of a company, if it's an ISP or a contractor engineering firm, you name it. They understand the risk. They're looking at it from a constructability perspective. If you're getting government funding, you need to understand what you're building because you own it until you finish it. And if you don't finish it, you're not getting the money. So you don't want to have these projects go. And then the constituents waiting for the fiber not to have it in three years. Got to, we should have a 0% failure rate, which we know that's not going to happen. That's not realistic, but how do we make that the goal?
Jessica Denson, Host (00:46:32):
So more like a little dream team that goes around.
James Norton, Talman Consultants (00:46:34):
Yeah, build the dream team out. There's not enough people to do it across the country anyway, so why don't we build out a model high level of what's the best practices and then run with that across the states.
Jessica Denson, Host (00:46:48):
Yeah, I saw you peek up at that. You're just looking for solutions for the people
James Norton, Talman Consultants (00:46:53):
Problem. Yeah, high level. Because at the end of the day, taxpayers are paying for this, so let's get everybody connected and raise all boats.
Jessica Denson, Host (00:47:04):
So what would you like to see happen or what would you like our audience to know about talman consultants?
James Norton, Talman Consultants (00:47:10):
That's a great question. We're an engineering consulting firm, always firm. Firm. We work with a lot of companies. We've heard a lot of 'em. We're solutions focused. We look for the solution first and work with our clients to say, this is what we've learned from by doing. And we look at solving the problem first and then bringing it back. And I think that's a different model than most every think about. You usually just take the job, do it, but we like to look at it a different way to make it more efficient and work with not only the client, but the municipality, the stakeholders, and the community. Because at the end of the day, a successful project is built, restored, and everybody has what they need and everybody's happy. And all the neighbors, I call 'em NIMBYs, are happy then, you know, did a good job.
Jessica Denson, Host (00:48:00):
Well, the waitress just brought your beer, so I better let you go. Well, I
James Norton, Talman Consultants (00:48:02):
Appreciate that. Thank you. Thank you so much for talking to me today. Well, thank you. Pleasure talking with
Jessica Denson, Host (00:48:06):
You. I'm at the Broadband and Brews event that's being held by Connected Nation in Sanborn, and I am with Camila Ade drum. I'm trying to roll my Rs. It's not going to happen. So why don't you say your last name for me?
Camila Calderon, Puerto Rico Broadband Program (00:48:17):
Yes. My name is Camila Calderon. Yeah.
Jessica Denson, Host (00:48:19):
And you are the outreach manager for the Puerto Rico Broadband program,
Camila Calderon, Puerto Rico Broadband Program (00:48:22):
Jessica Denson, Host (00:48:23):
Yes, I am. So tell us a little bit about what the broadband program is and your role.
Camila Calderon, Puerto Rico Broadband Program (00:48:28):
Okay. Well, the Puerto Rico program program, our goal is to have high speed internet around the whole island, and especially to deliver internet and connectivity to the unserved and underserved areas around the island. We know that Puerto Rico has a lot of parts like that because we're a little bit more attached to some of the natural disaster that happened. So there's a lot of areas, supportive opportunity as a country to have that better connectivity, just to help to have better telehealth, telemedicine, teles stories, and overall communication. Our biggest covered population are older adults. So in the process of getting connectivity, not only, we're bringing also infrastructure to give connectivity around the island, but we're also having the necessary education for everybody to be able to use it at their own benefit.
Jessica Denson, Host (00:49:27):
So you touched on it briefly there about the natural disasters. So Puerto Rico probably has some unique needs that are different than the mainland us. Correct? Can you talk a little bit about that? Yeah.
Camila Calderon, Puerto Rico Broadband Program (00:49:39):
More important than equity, touching the situation of national disasters. Puerto Rico has a very different topography. We have a lot of mountains. We have surrounded by water, very beautiful beaches. So you can go anytime you're going to have a great time, I need to come beaches. But we have a lot of the topography, we have a lot of mountain areas where there's a lot of people, but it's a very rural areas. And sometimes connectivity in those zones is a little bit tough. And when national disasters hit, then maybe those areas are going to be maybe there's towers, there's there fall and everything. So the resilience part of our plans are very, very high, because we want to to have a better infrastructure in those areas, to give connectivity to those areas. So yes, topography, it's,
Jessica Denson, Host (00:50:35):
It's a big piece of
Camila Calderon, Puerto Rico Broadband Program (00:50:35):
It. It's a big piece of it. And the decision, it helps or it's a big factor in decision making of those infrastructure projects.
Jessica Denson, Host (00:50:44):
So I mean, I want to understand the fact that I want people that are listening to understand that how scary it could be for somebody to not have access, to be able to talk to their family who might be there, whether they're on the mainland US or vice versa. When there is something like that, it's a frightening thing, right?
Camila Calderon, Puerto Rico Broadband Program (00:51:06):
Yeah. That's why connectivity is so important because it's really now one basic, it's a basic need like water and electricity, staying connected. It's really, really important. And around the island more, not only for, like we were talking about in National Burg for everything and from the young kids to be able to study, but for older adults to be able to see their doctors and everything. So it's really, really important to stay connected at any stage, at any age and every current population.
And having the right education for also people with disabilities is really important for us. And that's some of the things that we're taking into consideration on our digital equity plan and our five-year plan to make sure that we're taking the big necessities to cover these populations. And one thing that we're also making is that we develop a digital equity subcommittee where we have members of all these covered populations and every decision that we're making or every part of the plans that we plan to do, we consult with them and make sure that we're being considered and they're being attended on those decisions. So that's
Jessica Denson, Host (00:52:14):
Really, that's fantastic. You're really including their voices in the planning and what's finding out what they really need. Exactly. Yeah. So before we were chatting, you were talking about the affordable connectivity program. Do you find that's really important for Puerto Ricans?
Camila Calderon, Puerto Rico Broadband Program (00:52:29):
Yes. I think the affordable Connectivity program, I think, well, the team and the whole program, things that it's really important for us to emphasize that this is available for everybody to think, verify if they apply. But in Puerto Rico as a whole, most of the population qualify to be able to have these affordable connectivity program because there's so many factors where you can qualify that there's a big part of the population would definitely apply. And it's super important because we've had many listening sessions where we consulted with the population and for different parts, and they say, I don't have connectivity because I can afford it, or I need to be connected because if not, my grandkids won't visit me. Or I have my phone that that's the internet I have. But the idea is to have internet fiber to the home, which is more important than just relying on your phone and having this subsidy.
It's important because it couldn't help you have that internet at your house. And there's a lot of people that didn't know about it. And that's right now the only thing that's available as super fast for people to have and to receive. So that's why it's really important for us to partner with some of the ISPs or with companies or give out all this promotion out there, get that information out there. And now that we received also that grant, because more people should know that they can apply for this. Even my grandmother the other day, we were like, Hey, I think you can apply because you were the wife of a veteran. And it's important for her to have, if she fails, so she can say just, Hey, Alexa called Camila. We were talking about it. So it's important. And also for emergency related situations. So it's really important. Right now we have around 600,000 households that are currently enrolled in ACP, but we definitely want to get that higher. It's really important for us to people together there. We would love to have that number higher, and we're working towards that.
Jessica Denson, Host (00:54:30):
Yeah, that's something we're seeing across the country, that there's ACP, but people don't know about it or aren't aware of it, that they can actually be part of it. So those numbers, those are pretty good. But yeah, we can do better.
Camila Calderon, Puerto Rico Broadband Program (00:54:41):
Definitely. When we started with the Puerto Rico government program, those numbers were lower. So as of when we started talking about this more openly and on the media, on social media and communities listening sessions, we've noticed that the numbers are grown. But now, right now that we know we can partner and with the help also with Connected Asia, we probably are going to get those numbers even higher. Yeah.
Jessica Denson, Host (00:55:08):
You touched on how beautiful Puerto Rico is that I should come. Yes. I definitely should come cover some of this there. I think
Camila Calderon, Puerto Rico Broadband Program (00:55:14):
So. I think so. Think you'll enjoy. There's a lot of content that you're going to be able to have.
Jessica Denson, Host (00:55:19):
I think so too. I'm talking to you, CEO, Tom Re, Hey, I'm teased a little bit, but Puerto Rico is a big tourist attraction. So having that access is critical for the tourism industry there too, don't you think?
Camila Calderon, Puerto Rico Broadband Program (00:55:33):
Yes. It's important. And that's why with some of the areas where some of those projects, the Puerto Rico BroadB program has many programs that it wants to develop, and the wifi, the free wifi in different zones is a big one, because that will help definitely with tourism, having some connectivity in some of the central areas of each town is going to be really important because that's where a lot of things happen. And tourists go there all the time. So it's going to be an important part of helping tourism too, with the connectivity.
Jessica Denson, Host (00:56:11):
Now, what ultimately do you hope comes out of the next five years of this planning?
Camila Calderon, Puerto Rico Broadband Program (00:56:18):
Well, I hope we have a better connected Puerto Rico. We hope to really have not only connectivity, but also a workforce available to give continuity to the infrastructure that's going to be developed. Because some of the projects also, we are working on developing workforce to have more education in the island and developing workers that would help give continuity to all the infrastructure projects. So I hope for the next years we'll develop more workforce. We have more work opportunities, we have more connectivity, education, and education for all ages. I think it's going to be, the connectivity will be very important for everybody. And of course, how you say when you visit, tourism will be better and you'll be connected everywhere.
Jessica Denson, Host (00:57:06):
Hopefully I want to be connected the whole time. So full disclosure, the broadband program is working some with Connected Nation. Correct. Can you talk a little bit about how that partnership is working?
Camila Calderon, Puerto Rico Broadband Program (00:57:16):
Yes. We're working on getting all those aspects about the ACP programs out there. Well, first of all, they helped on all that part of getting all those KPIs that were needed for us to develop some of our plans. We're very grateful for our connected nature for giving all those information and all those surveys out so we can basically help get that data for us to develop some of our plans. But right now, they're mainly helping us also with the SACP programs and how we can move and promote those signups more and more people to get and reach the SCP
Jessica Denson, Host (00:57:55):
Programs. So I do know that Puerto Rico is a Spanish speaking island. Correct. So I don't want to be remiss and not give you the opportunity to deliver a message in Spanish. What do you want people to know about the broadband program in Puerto Rico?
Camila Calderon, Puerto Rico Broadband Program (00:58:13):
Do you want me to say in Spanish? Yeah,
Jessica Denson, Host (00:58:14):
Camila Calderon, Puerto Rico Broadband Program (00:58:14):
Jessica Denson, Host (00:59:11):
All. I'm going to let your Spanish version be the final word.
Camila Calderon, Puerto Rico Broadband Program (00:59:13):
Do, do you know what I said?
Jessica Denson, Host (00:59:15):
I know it said I heard a porte, right?
Camila Calderon, Puerto Rico Broadband Program (00:59:19):
Jessica Denson, Host (00:59:19):
But I feel like internet, those you understand? Yeah. I feel like you explained it to us in English, so I thought it was important to give you a chance to tell your Spanish language listeners as well. It's only fair. So thank you so much, Camilla. I really appreciate you, and I look forward to seeing what you all do.
Camila Calderon, Puerto Rico Broadband Program
Yeah. Thank you for having me, and hope to see you around in Puerto Rico.
Jessica Denson, Host
So I'm planning to come to Puerto Rico now. (laughter)
Jessica Denson, Host
I'll be at the US Broadband Summit for the next few days and we'll continue to bring you stories from the field.
Until next time, I'm Jessica Denson. Thanks for listening to Connect Nation. If you like our show and want to know more about us, head to connected nation.org or look for the latest episodes on iTunes, iHeartRadio, Google Podcast, Pandora, or Spotify.