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Enhancing Broadband Connectivity for Rural Communities in North Carolina

Explore the impact of the North Carolina Golden LEAF Rural Broadband Initiative on economic development and community empowerment through enhanced broadband access. Learn about MCNC's efforts, challenges faced, and the importance of middle-mile infrastructure.

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Enhancing Broadband Connectivity for Rural Communities in North Carolina

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  1. MCNC & The North Carolina Golden LEAF Rural Broadband Initiative Joe Freddoso President and CEO MCNC June 4, 2010 Speed

  2. Agenda • MCNC is about Community • Framing the North Carolina Broadband House • Broadband Recovery Funds • MCNC Proposals • Round 1 • Round 2

  3. Why have a state network? • The bandwidth • Growth in demand in intrastate traffic • Critical applications hosted in-State • High bandwidth research use • Aggregate demand for access • The Community • Benchmark • Innovate • Learn

  4. MCNC • 1980 – Non-profit Research Institute • Attract research $’s and Jobs • 1984 – Concert Network • Education networking • 1999 – Sale of Cronos • Benefits to the State • MCNC Endowment • 2010 Operator of NCREN • The Education Network • 3 million users • eLearning Commission

  5. MCNC Operates NCREN North Carolina Research and Education Network Red – IRU’d Fiber Blue and Carolina Blue – Leased Bandwidth

  6. Example of Community • North Carolina Governor Bev Perdue

  7. Example of backbone value Dr. Bob Blouin – Dean UNC –Chapel Hill School of Pharmacy

  8. Framing the Broadband House • One stated goal of the 1996 Telecommunications Act is to ensure that consumers “in rural, insular, and high-cost areas, should have access to telecommunications and information services . . . at rates that are reasonably comparable to rates charged for similar services in urban areas” (U.S. Congress 1996, §254 (b) (3)). • Communities with new access to broadband experienced 6.4 percent higher employment growth - on average than before they had broadband. Where Jobs Come From, The Role of Innovation, Investment, and Infrastructure in Economic and Job Growth. By Jessica Milano, February 2010.

  9. Framing the Broadband House Broadband access is not a panacea but it is: • Equity of Education across K20 • Modern healthcare • Economic development • Civic participation • A flexible infrastructure that can be leveraged by citizens for the benefit of health, education, prosperity and civic engagement • Less expensive to deploy than past generations

  10. Why the Middle Mile? “Middle-mile infrastructure is essential for bringing broadband to communities that were previously isolated or had only rudimentary connections. By lowering the cost of last-mile connections, investments in the middle mile allow Internet service providers to enter the market and build connections to homes and business…” White House National Economic Council, 12/2009

  11. Federal Stimulus • ARRA provides $7.2B to enhance broadband access • $4.5 B to Commerce BTOP • $2.7 B to Agriculture RUS • Why did MCNC apply? • Build on an existing asset – not build from scratch • Leasing bandwidth in rural areas no longer feasible • Equity of education • No dark fiber made available • Underserved consumers • A chance to contribute outside the norm

  12. Economic Distress in North Carolina Economic Condition Both Income and Unemployment Criteria Not Economically Distressed Economically Distressed Data Source: BEA and BLS According to 42 U.S.C. 3161, Economically Distressed Areas (EDAs) are areas where the unemployment is 1% or more above the national average or the per capita income is 80% or less than the national average. The EDA map is updated quarterly. Last Updated 02/05/10. http://hepgis.fhwa.dot.gov/hepgis_v2/GeneralInfo/Map.aspx Data Sources include: (1) 2007 Per Capita Income, Bureau of Economic  Analysis, (2) 24-Month Average Unemployment Rates Jan. 2008 - Dec. 2009, Bureau of Labor Statistics   MCNC Route BTOP Round One Possible MCNC Route BTOP Round Two U.S. Department of Transportation Federal Highway Administration

  13. Round 1 – MCNC Application • $28.2M request, $11.7M match • Uses no State Funds • $7.7M From MCNC Endowment • $4M From Bandwidth Wholesaler PalmettoNet • 37 Rural Counties – 24 fully or partially underserved • Private partner reaches last mile consumers • Round 1 Results: MCNC Won

  14. Round 1 Cost Avoidance * Round 1 Award – Covered $28.7M of the capital

  15. Middle Mile Build

  16. Round 2: Proposal • $111M for 1100+ Miles of fiber • $33M to meet 30% match • Golden LEAF Foundation an early partner • 4 Underserved areas remain • Northeast • North Central • Northwest • South Central • Direct fiber to community anchor institutions • Community Colleges and Libraries • $2M to sustain (O&M and Refresh) • Already committed

  17. Round 2: Community Anchor Institutions

  18. Challenges • Commercial viability lacking • Fiber is not as valuable to private sector • Direct Fiber to Community Anchor Institutions • Sustainability of public part of the network • MCNC existing customer base • Reporting requirements of Federal Government • ROI not as simple as round 1 • MCNC endowment not a source for round 2 • 30% match

  19. Round 2 Service providers - $4M in value expected • Northeast and North Central • CenturyLink short term lease • Northwest • ERC broadband – Denied round 1 (No match) • Blue Ridge Electric – Fiber Swap • Graham and Jackson County – Eastern Band of the Cherokee and Drake Industries $500K • South Central • Zayo Bandwidth and DukeNet - $3M in value combined

  20. Local involvement • Cannot contribute match • Letter of support • Help to identify Community Anchor Institutions • Direct connect to fiber • Priority types • Community Colleges • Libraries • Main Public Safety Centers

  21. Final Message The project is important in high unemployment areas for the immediate economic impact of jobs created by the project, and the future high speed infrastructure the program would establish as the foundation of high speed internet growth in North Carolina. MCNC has created an application that has great impact to North Carolina, fulfills the goals of BTOP, and takes advantage of this once-in-a-generation opportunity to make an historic expansion of North Carolina’s fiber infrastructure. MCNC has effectively run NCREN for more than 25 years and is an experienced handler of private and federal grant awards. MCNC has made every effort to enlist public and private partners in each geographic area of the 69-county project. Governor Bev Perdue, May 4, 2010

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