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Wednesday, November 19, 2014

Now who'll get C2?

Back in July, I looked at who might get Category Two (C2) funding.  My analysis said that it would take $2.3 billion to cover 80% schools.  If the Commission gets the $1.5 billion cap increase in place for 2015, and we get the $1 billion that the Chairman plans to leverage out of the existing fund, we're looking at something like $4.9 billion.  I'm guessing that C1 funding demand will be maybe $2.4 billion (based on an earlier estimate of $1.8 billion in broadband, with growth of 10%, plus $400 million to cover phasing-out voice).  So that leaves $2.5 billion for C2.

That's a little more than enough to cover every 80% applicant.  They won't all use their entire $150/student budget, so it looks like the 70%ers will be able to wet their beaks, too.  By FY 2016-2017, we could reach 50% applicants.  By FY 2017-2018, all applicants could receive C2 funding.

Of course that assumes that spending on broadband doesn't spike.  My prediction there: increasing demand will outrace falling prices, and we will see a net increase in demand.  But I'm betting that the demand increase for broadband will be 10-20%, unless applicants start installing unnecessary 1-Gbps circuits just because the FCC says they need it (based on President Obama saying it was a good goal, apparently based on SETDA's recommendation,  which was based on...well...if we need a maximum 100 Mbps/1,000 students today (a number we dreamed up on p. 23), then we'll need...well...more in 2017-2018).  My growth estimate is based on the same kind of analysis used to arrive at the 1-Gbps/1,000-students goal; it just feels right.

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