Addressing "Sustainability" of NTIA Broadband Stimulus Projects

The problem many applicants must face in crafting projects under the National Telecommunications & Information Administration portion of the American Recovery & Reinvestment Act ("stimulus bill") are the conflicting objectives.

The "broadband stimulus" portion of the ARRA is supposed to create jobs. Broadband is almost a secondary objective. The projects are supposed to have "measurable" goals. But economists aren't sure whether new broadband facilities actually create--or destroy--jobs.

All funds awarded under the NTIA program must be spent in two years, so are temporary, but the ARRA ideally expects "sustainability" of the projects once federal funding ends.

Nobody yet knows what "under-served" means, so many projects might actually be proposed in areas where there are two wired services providers as well as two satellite providers, plus three mobile broadband providers. Lots of people are "under-served" not because of lack of access to facilities but for some other reason: lack of interest, lack of knowledge, equipment or money.

Most people think the Rural Utilities Service portion of the program will address rural areas. But an argument can be made for rural programs under the NTIA rules that actually have a route to "sustainability" and "job creation" on a permanent basis.

That route is funding rural call center operations. NTIA funds can be used to create facilities, either "at home" or perhaps at new call center facilities, with monies used to train rural residents.

The sustainability of the jobs and connectivity once the NTIA funding runs out are provided by the call center operations. Since NTIA projects have a stated preference for education and job creation, proposals should be submitted by community colleges and state job training agencies, in conjunction with service providers that can provide the connectivity and equipment.

The objective would be to deliver a turnkey "call center" capability ready to be used by any firm requiring such capabilities.  It's a thought.

http://www.npr.org/templates/story/story.php?storyId=100739283

Long Tail Yes, But Perhaps Not What You Were Expecting

In recent years much has been made of the implications of the "long tail" theorem, the notion that digital technology, digital goods and the Internet make possible a vast shift of commerce from the few large firms in any category to many hundreds to thousands of other firms.

Search market share indicates that the basic underlying theorem, the Pareto Principle, commonly understood as the "80/20" rule, does indeed operate.

But not in the ways some might predict. There is a search long tail, with four providers at the head of the curve, and then several score other smaller providers forming the tail.

Unfortunately, it does not appear that market share is much different from what might predict for physical goods. In search, as elsewhere in life, 20 percent of providers have 80 percent of the market share. In this case, a few percent of providers have 99 percent share.

http://www.altsearchengines.com/2009/03/27/the-top-30-alternative-search-engines-by-market-share/

TV Still Dominates "Three Screen" Viewing

TV Continues to represent 99 percent of viewing on all screens, according to the Council for Research Excellence. Contrary to some recent popular media coverage suggesting that more Americans are rediscovering "free TV" using the Internet, computer video tends to be quite small with an average time of just two minutes (a little more than 0.5 percent) a day.

Despite the proliferation of computers, video-capable mobile phones and similar devices, TV in the home still commands the greatest amount of viewing, even among those ages 18 to 24, the Council says. This appears to refute a common belief that Internet video and mobile phone video exposure among that group (as well as the 25 to 34 cohort) were significant in 2008.

Consumers in the 45 to 54 age group average the most daily screen time (just over 9.5 hours). The study also found the average for all other age groups to be "strikingly similar" at roughly 8.5 hours

Even in major metropolitan areas where commute times can be long and drive-time radio remains popular, computer use has replaced radio as the second most frequent media activity. Radio is now the third most popular media format while and print media ranks fourth.

Live TV led all video usage by a large margin, followed by DVDs, with DVRs third.

http://www.researchexcellence.com/news/032609_vcm.php

Social Networking Overtakes Email

Internet activity patterns are changing, according to Nielsen Online. In the past, email has been the "killer app" for Internet users. More recently, search replaced email.

These days, email has been eclipsed by search and social networking.

Two thirds of the world’s Internet population visit a social network or blogging site and the sector now accounts for almost 10 percent of all Internet activity time. "Member communities" have overtaken personal email to become the world’s fourth most popular online acivity after search, portals and PC software applications, Nielsen says.

The total amount spent online globally increased by 18 percent between December 2007 and December 2008. In the same period, however, the amount of time spent on member community sites rose by 63 percent to 45 billion minutes,  and on Facebook by a massive 566 percent, says Nielsen, growing from 3.1 billion minutes to 20.5 billion minutes.

"The staggering increase in the amount of time people are spending on these sites is changing the way people spend their time online and has ramifications for how people behave, share and interact within their normal daily lives," says Nielsen.

Consumer engagement within social networks has the potential to change the way consumers are targeted, not just through the digital medium, but through all forms of traditional media, Nielsen adds.

According to Nielsen Online, more people in the United States, Australia, Brazil, France, Germany, Italy, Spain, Switzerland and the United Kingdom are using social networks and blogs than email. Where 85.9 percent of respondents say they use search, 65.1 percent say they use email.

In addition, time spent on social networks and blogging sites is growing at over three times the rate of overall Internet growth.

http://www.nielsen-online.com/pr/pr_090309.pdf

Expect Upwards of $29 Billion in Fraud, Waste from Energy Dept. "Stimulus" Spending

When was the last time an infrastructure project--any infrastructure project--really was better because spending was rushed?

Based on rates of fraud already encountered by the Department of Energy, one might expect a 17.5 percent rate of fraud and waste, at minimum, for funds disbursed as part of the "stimulus" spending authorized by the American Recovery and Reinvestment Act.

According to Energy Department Inspector General Gregory Friedman, the $165 billion in stimulus cash to be distributed by the Department so dwarfs the annual Department budget of $27 billion that the resources of the agency for getting the money spent while avoiding fraud and abuse will be sorely tested.

In the last four fiscal years the Department of Energy investigations into misspent federal funds have resulted in about 150 criminal convictions, and fines and recoveries of more than $190 million. This represents a little over 17.5 percent of budget money, and suggests the Energy Department can expect more than $29 billion in waste and fraud just within its slice of the stimulus pie.

Friedman's memo acknowledges that low income home weatherization is the program most at risk for fraud, so if you intend to be working on projects of that nature, expect a lot of extra paperwork and figure your bid overhead accordingly.

http://chicagoconstructionlaw.blogspot.com/

Less Churn is Sorta Good, Sorta Bad

At home entertainment is up, while almost anything outside the home is down, a survey sponsored by the Cable & Telecommunications Association for Marketing suggests.

Industry executives--both telco and cable--have been saying that with housing starts down and housing activity down, so are home moves.

Ironically, that has made it harder to attract new customers, as moving automatically creates a "change event" that opens the door for new providers.

The CTAM survey also suggests there is less appetite for trying new providers. So all those customers who aren't moving, also are less likely to churn. Lower churn is good. But some amount of churn also represents a sales opportunity.

Service providers in the small and medium business space note a roughly similar trend: people are less inclined to take on some amount of additional risk by switching current providers.

Another Take on "Cocooning"

One reason video entertainment services fare relatively well in a recession is that the perceived value of in-home entertainment increases.

http://anxietyindex.com/2009/03/when-spending-money-equals-saving-money/