Incumbent questions Guam broadband stimulus win -- and new funding application

GTA TeleGuam, the incumbent carrier in Guam, issued a protest yesterday about the $8 million broadband stimulus award granted to a competitor, charging that the funds could be used to build a network duplicating existing network infrastructure. But the company’s real concern seems to be a new stimulus application by the same competitor for an even larger network with a greater likelihood of duplicating existing facilities—and an $89 million price tag.

“Guam is extremely competitive and telecom-rich,” GTA TeleGuam Chief Executive Officer Dan Moffat told Connected Planet. “It’s not underserved. It’s served by us and four other players. Our fundamental premise is that public money is being shoveled out the door.”

The initial $8 million award that GT TeleGuam is questioning went to Island Telephone and Engineering (IT & E), a carrier that offers service in Guam and the neighboring Commonwealth of the Northern Marianas (CNMI). Both Guam and CNMI are under U.S. control. The award to IT&E, a company with Philippine ownership, was for middle-mile broadband facilities in both areas and for a submarine cable connecting the two. According to the press release issued at the time of the award, the project is expected to directly connect more than 400 community anchor institutions, including community colleges, K-12 schools, libraries, healthcare facilities, and public-safety organizations.

The executive summary for the project does not reveal what percentage of the project is in each territory. But, according to Moffat, additional broadband facilities in Guam are not needed.

“More than 80% of the people in Guam can receive 6 to 10 Mbps,” Moffat said. “And 100% can receive 2-4 meg on 3G.” As for anchor institutions, Moffat said, “Eighty per cent have fiber in the building or fiber to the curb and 100% can be served by metro Ethernet.”

A spokeswoman for the National Telecommunications and Information Agency (NTIA), which awarded the grant to IT&E, wrote in an email to Connected Planet: “These grants were carefully designed to invest money where it’s truly needed. . . The fact that an existing provider offers some level of broadband service somewhere within the project’s proposed service area does not disqualify the project from funding. . . The goal is to ensure that funding goes to projects that will enhance broadband service throughout areas with demonstrated need and best expand broadband access and adoption, help bridge the technological divide and strengthen communities through new economic opportunities.”

With regard to this specific award, the spokeswoman said, “Our review concluded that neither of the service providers commenting on IT&E’s application provided sufficient information to overcome the applicant’s assertions that the proposed project was eligible for funding.”

IT&E’s new application to the NTIA requests approximately $90 million and proposes to build a “self-healing fiber optic middle-mile broadband backbone with an LTE wireless overlay for some last mile service, serving community anchor institutions in underserved and economically disadvantaged areas of Guam and the CNMI.” The executive summary does not detail the data rates that the proposed facilities would support—although it does list Raytheon as a “contracting partner.” Raytheon, a large government supplier, is perhaps not a surprising partner choice, considering that Guam is expected to receive an influx of 8000 military personnel that are to be relocated there by 2014.

According to the project summary, the project would “impact” a total of 1,476 jobs, including “induced,” direct and indirect jobs. Moffat charged that any jobs created for IT&E would take away jobs from GTA TeleGuam.

Connected Planet’s call and email to the contact listed on IT&E’s broadband stimulus applications were not returned.