The Stimulus and the Future of Due Diligence

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The economic crisis certainly suggests a way of doing things that is not business as usual. That's great in theory -- we are up against it, after all -- but problems arise when the emergency measures run headlong into the old way of doing things. Old habits-which are exercised by those who exert control and like doing so-die hard.


The Washington Post reports that there is concern that the Federal Communications Commission's obligations under the stimulus law won't be fulfilled until the money has been handed out. More specifically, the commission is charged with defining broadband speeds and determining where it is most needed. The problem: The plan is due next February, while the money will be distributed well before that.

The story provides a great deal of detail. The nub of the issue is that the regulatory authorities and standards bodies evolved in a different age. The methods they developed to do their jobs-to regulate telecommunications or establish the minute details of new platforms-were designed to be exhaustive and, therefore, took a long time. The two priorities -- saving the economy with an a caffeine rush of cash and taking the time to do things as close to perfectly as possible-seem mutually exclusive.

Last month, Russ Sharer, vice president of marketing for Occam Networks, implied during an interview that the procedures for awarding the money were very much a work in progress. Asked why there are three periods during which money will be given away, Share said:

I think it has to do with the realization that they can only process grants so quickly. They also want to see what kind of projects people are working on, and not working on, as they go through the funding cycles. If I had to allocate [a tremendous amount of money] and had not done that before, it is kind of a big thing to gear up for [especially] if I had to do it all at once.

Later, he suggested that the government is not acting as if it knows everything:

What they are saying is that we do not have all the rules yet but want to encourage people to put together business plans, start aligning the funds.

It's easy to assume that the voluminous procedures set up by the government and technical standards-setting bodies are overkill. They aren't. The reams of documents and myriad meetings, which most people would find as stimulating as a sensory deprivation tank, serve good purposes. They are in essence the government and standards bodies doing their due diligence. Done correctly, they lower the risk of a problematic spec or misleading clause to sneak into long and complex final documents.Doing things correctly -- reducing the risk of a problem to as close to zero as possible -- takes time.

Without such oversight, mistakes will be made. For instance, it is widely assumed that lack of true broadband is a rural problem, and that folks in urban settings are covered. That isn't the case, according to the Free Press. The organization used the kickoff of the FCC's national broadband strategy to release statistics that underscore how underserved a good deal of the urban population is. In this context, the point is that the FCC procedure-its timing notwithstanding-will play an important role in determining who needs a boost and who doesn't.

It also is important to consider the landscape in which all of this is occurring. There is a lot of money at stake now. Beyond that, the way in which the rules are written and the processes the government puts in place will have impact well into the future. BNET says that the lobbyists are hard at work. The claim is that larger carriers, including Verizon, Comcast and AT&T are working through the organization Connected Nation to squelch local efforts to build and manage municipal broadband networks. The research the FCC is doing would be a very big help in assessing whether what the carriers are advocating is in the public interest.

Craig Settles, a well-known analyst in the municipal broadband sector, seems to think Congress so far has done a good job. In a commentary at FierceBroadbandWireless, he counsels interested parties to keep an eye on the incumbents and offers what he feels is the best way to move forward. His focus is on preserving the options that best serve small and mid-size communities.

How the broadband stimulus funding hashes out will be fascinating on a number of levels. The most important, of course, is simply who gets the money and what types of projects they build. On a more subtle level, it will be important to watch how these largely impromptu procedures interact with deeply ingrained regulatory, legal and political/lobbying infrastructures. The results will be a harbinger of things to come as the pace of technical change accelerates.