Scott, Here is the best advice I can give you. Rules are not published and nobody knows what will be the criteria for qualification or for actually winning the grants, and I'm not sure NTIA will really know either, even after they publish rules. I think the first allocation of funds will be somewhat a science project to see what type of applicants and applications are receieved.
What you need to do is.... 1) identify the areas that you'd like to serve with grant money, if you got some. Don't overly plan, it will take to much time. Use some forward thinking :-) 2) Come up with a plan of how much additional cash you'd need beyond grant funds, to acheive the plan, if you won a grant for those areas. 3) Don't expect anyone to give you a magic formula before the NOFA and rules are released from NTIA/RUS, because it will be useless and inaccurate. 4) Don't expect anyone to give you a magic formula after teh NOFA and rules a released from NTIA/RUS, because by then there won't be anymore time left, and everyone will be scrambling to get their grants in with the SHORT deadline. The Legislative Committee is closely monitoring the progress regarding notices and comments released by NTIA/RUS as they are released. WISPA's Membership will be notified of this information and where to read details when it is released. In the meantime, you'll need to gamble, and bet on what you think will be the future rules. WISPs will be fighting against the grain so to speak, because our typical profile will not match the typical profile of the targeted awardee. But the good news is that NTIA/RUS are simplathetic to WISPs, and if they gave a grant to every pre-existing WISP, it really wouldn't be all that much money comparatively, to what is available. The biggest barrier is the reality that its most feasible for NTIA/RUS to award large grants, just because the sheer volume of it. However, I know for a fact, they are trying to come up with ways to include WISPs, within reality. Maybe we'll get lucky, and they'll allow smaller projects, that are well written, and justified. My advise is to do all the business case plannign a head of time, so you are rteady to hit the ground running, when the NOFA is released. Remember, they have not stated that there will be any reward for deploying cheaper. But it is a listed goal, to seek plans that incourage additional investments. Again, that is a barrier, for WISPs that have already invested all their personal resources and capitol, and to attrack additional investors that will bring in operating cash, without the WISP giving their business away. Just remember the largest reason small WISPs have not received grants is that they never applied. Tom DeReggi RapidDSL & Wireless, Inc IntAirNet- Fixed Wireless Broadband ----- Original Message ----- From: "Scottie Arnett" <sarn...@info-ed.com> To: "WISPA General List" <wireless@wispa.org> Sent: Monday, May 25, 2009 12:27 AM Subject: Re: [WISPA] Broadband Stimulus Allocations? >Even here, I eventually expect >competition to enter my market. It would be nice to know the "secret >sauce" so I can be better prepared for that day. What has WISPA came up with to help WISP's get in on the broadband stimulus package? Throw me some bait? As I promised before, my membership fees(after tax season) are sitting here... give me something to bite. Not being an A**, but I belonged to one place(not WISPA), but didn't get much out of it. I did receive an invitation from Double Radius to help me get in on this. Just wanting to know if WISPA got anything going on, before I jump on that opportunity? One of my regular suppliers that I trust. Scottie ---------- Original Message ---------------------------------- From: RickG <rgunder...@gmail.com> Reply-To: WISPA General List <wireless@wispa.org> Date: Sun, 24 May 2009 13:00:41 -0400 >I find the "secret sauce" of converting a customer a very interesting >subject as well. For the most part nearly every WISP I have run had a >monopoly. The ones that didnt had a niche of some kind. My first >owner/operator venture was not good because it was in a highly >competitive market and I could not overcome the "go with the big >company" mentality. My customers said I gave great service but even >they succumbed to price. Therefore, I sold that and went back to the >monopoly world (read boondocks). Even here, I eventually expect >competition to enter my market. It would be nice to know the "secret >sauce" so I can be better prepared for that day. > >-RickG > >On Sun, May 24, 2009 at 9:33 AM, Charles Wu <c...@cticonnect.com> wrote: >>>All I can say is if you are "holding back" on doing more installs because >>>you can't afford it, you need to find some financing and get installing. >>>Once that customer is installed with something else (DSL, >Cable, >>>competitor), it's 10x harder to get them to switch to you. You have to >>>get the customers NOW. >> >> Now that's a more interesting discussion >> >> What's the business plan for customer acquisition? Do you still keep >> building out into unserved areas (e.g., "first to market")? >> >> At this point, I would guess that most areas have competition - so then >> is the business model based upon arbitraging attrition and moves? >> >> e.g., the average American moves every 7 years - so that means 12% of the >> population is available "yearly" as a "new customer" >> >> So, say you have 5,000 customers in a market of 100,000 >> >> You'll churn 1% / month (50) - but there's a market of "new adds" of >> 1,000 customers every month due to just organic moving activity...so >> assuming 20% market share, market equilibrium would be 20,000 subscribers >> >> Not necessarily a bad thing =) >> >> That said, I'd be curious to talk about "secret sauce" methods to convert >> customers from the competition >> >> -Charles >> >> >> >> Charles Wu wrote: >> >> Hi Scott, >> >> >> >> Regarding debt...I've found that there's a "scale inflection point" in >> running a WISP (or any business for the matter) that needs to be >> reached -- the main purpose for taking on debt (because due to interest, >> you end up paying more in the longer term instead of buying cash), is to >> accelerate growth so one can progress beyond this point >> >> >> >> e.g., if you can organically fund 30 new installs a month with cash, if >> you take on debt, you could leverage yourself and now do 100 installs / >> month >> >> >> >> Now, from a business perspective -- in looking at the WISP >> >> >> >> As a stand-alone sustainable business -- it costs a minimum of about $30k >> / month to operate a small WISP -- now, I'll argue that that $30k/month >> in operations remains relatively constant and whether it's supporting >> 300, 800 or 1500 customers -- however, at 300 customers, the business is >> bleeding cash...at 800 customers the business is just about at a >> break-even, and at 1500 customers, the business is a cash machine >> >> >> >> -Charles >> >> >> >> -----Original Message----- >> >> From: wireless-boun...@wispa.org<mailto:wireless-boun...@wispa.org> >> [mailto:wireless-boun...@wispa.org] On Behalf Of Scott Reed >> >> Sent: Saturday, May 23, 2009 4:20 PM >> >> To: WISPA General List >> >> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital >> Availability >> >> >> >> So I will take option 4 from a previous post since Travis made the point. >> >> "Up to 60 months with $1 buyout is the same as a 5 year bank loan." >> >> I want to run debt free as soon a possible. That being the case I don't >> >> lease and have not leased to keep debt down. I do have a start-up loan >> >> that is being paid on a little slower than I would like, but we have >> >> paid off 1/2 of it in < 5 years and based on our payments, we are cash >> >> flow positive. >> >> Granted, my WISP is a lot smaller than many that post here and our >> >> growth rate is small, but some of that is managing growth to stay >> >> cash-flow positive. >> >> I have seen several companies die because they became cash rich, but >> >> still could not cover the debt. >> >> >> >> Travis Johnson wrote: >> >> >> >> The banks can sell a car with little effort. They already have >> >> relationships with dealers and auctions. And often, if the consumer's >> >> credit is questionable, the dealer will guarantee to take the car back >> >> if the loan defaults. >> >> >> >> Who is going to buy a $10,000 radio that has been repo'd? Even for >> >> $5k, I wouldn't touch it. I'd buy a new radio with warranty, that I >> >> know is good and hasn't been fried or broken. >> >> >> >> The banks will never loan on the equipment alone. There is no security >> >> there... but again, why do you need a bank loan for equipment when you >> >> can just lease it and get the same results? Up to 60 months with $1 >> >> buyout is the same as a 5 year bank loan. What's the difference? >> >> >> >> Travis >> >> Microserv >> >> >> >> Tom DeReggi wrote: >> >> >> >> Maybe when talking about CPE. >> >> >> >> But what about when one is talking about a $10,000 Part101 radio? >> >> >> >> Just like a car, all that the lender should need is to "hold the title" >> of >> >> the radio until paid off, and get a down payment of $2000 to cover the >> cost >> >> of tower climber/repo man, and a signed letter of authorization from >> lanlord >> >> stating the location of the tower gear is installed on and they >> acknowledge >> >> that the gear is not abandoned equipment. (So it does not automatically >> >> become property of landlord in 4 months, and teh landlord knows the >> >> equipment owner has first rights to the gear). >> >> >> >> Think about it... Wouldn't repo costs be reduced when the repo man knows >> >> exactly where to find the radio? A car can easilly be relocated and >> >> hard-to-find, when the owner skips town. >> >> Plus the home likely has an owner with a shot gun or a big dog, which the >> >> tower/MTU likely does not. The MTU building might even have a security >> >> guard to escort teh lender safely to the roof :-) >> >> >> >> >> >> Tom DeReggi >> >> RapidDSL & Wireless, Inc >> >> IntAirNet- Fixed Wireless Broadband >> >> >> >> >> >> ----- Original Message ----- >> >> From: "jp" <j...@saucer.midcoast.com><mailto:j...@saucer.midcoast.com> >> >> To: "WISPA General List" <wireless@wispa.org><mailto:wireless@wispa.org> >> >> Sent: Friday, May 22, 2009 11:13 AM >> >> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital >> Availability >> >> >> >> >> >> >> >> >> >> In a worse case scenario, a car is probably considerably easier to repo >> >> than the antenna on my roof and radio in my attic. And the car would be >> >> worth a magnitude more money. The installed infrastructure is worthless >> >> if it costs a huge amount to get to it. >> >> >> >> On Thu, May 21, 2009 at 07:27:09PM -0400, Tom DeReggi wrote: >> >> >> >> >> >> I've never found a lender willing to lend against using the in-place used >> >> equipment as colladeral. >> >> It is the biggest double standard. >> >> I find it highly ironic that they'll use a car for colladeral that looses >> >> 50% of its value the day it leaves the lot, and has a rate of failure and >> >> risk of damage higher than just about any product on the market, and it >> >> has >> >> a huge cash burn (gas :-). but yet lendors won't put equivellent value on >> >> wireless gear, that holds its value, Ebay boasting easilly 50% after 3-4 >> >> years of use, even after fully depreciated. >> >> I'll never understand the lending market. >> >> >> >> Tom DeReggi >> >> RapidDSL & Wireless, Inc >> >> IntAirNet- Fixed Wireless Broadband >> >> >> >> >> >> ----- Original Message ----- >> >> From: <rea...@muddyfrogwater.us><mailto:rea...@muddyfrogwater.us> >> >> To: "WISPA General List" <wireless@wispa.org><mailto:wireless@wispa.org> >> >> Sent: Thursday, May 21, 2009 1:55 PM >> >> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital >> >> Availability >> >> >> >> >> >> >> >> >> >> Answers in-line. >> >> >> >> >> >> ++++++++++++++++++++++++++++++++ >> >> <insert witty tagline here> >> >> >> >> ----- Original Message ----- >> >> From: "Charles Wu" <c...@cticonnect.com><mailto:c...@cticonnect.com> >> >> To: "WISPA General List" <wireless@wispa.org><mailto:wireless@wispa.org> >> >> Sent: Thursday, May 21, 2009 8:49 AM >> >> Subject: [WISPA] Quesiton on Funding / Financing / Capital Availability >> >> >> >> >> >> >> >> >> >> With all the hype being generated by the stimulus bill, we have been >> >> approached by a multitude of third party financial organizations that >> >> have >> >> a renewed interest in potentially financing rural broadband...now, >> >> specifically, for WISPs, in the past, equipment leasing has been a >> >> very >> >> popular option for financing, but in looking at our numbers over the >> >> past >> >> year, I've noticed a marked decline in the amount of leasing that we >> >> do - >> >> that said, I have the following questions for the listserv about >> >> financing >> >> >> >> Assuming that WISPs are still need to buy equipment... >> >> >> >> 1. Are you able to just purchase equipment out of cash-flow >> >> organically >> >> generated from operations >> >> >> >> >> >> Other than originally starting with our own personal seed money, that's >> >> what >> >> we've done. >> >> >> >> >> >> >> >> 2. Have you gone to more traditional forms of money (e.g., bank / SBA >> >> / >> >> RUS loans)? >> >> >> >> >> >> I could not qualify for any of them. >> >> >> >> >> >> >> >> 3. Are you doing more vendor leasing programs (e.g., Motorola 3% >> >> financing >> >> deal) >> >> >> >> >> >> Never sought any. >> >> >> >> >> >> >> >> 4. Have you not been able to borrow money due to the credit crunch >> >> (e.g., >> >> not deploying as aggressively) >> >> >> >> >> >> My corporation hasn't ever been able to obtain hard money credit. In >> >> fact, the "credit crunch" start last Fall raised my "30+ day past due" >> >> amount from a piddly $1200 to at one time to almost $13,000 in just >> >> four >> >> months. That almost put us under, and we're still barely scraping by >> >> until >> >> our seasonally variable cash flow revives come August, with still >> >> several >> >> thousand on the books that's very slowly getting chipped away at. >> >> >> >> >> >> >> >> 5. Are you holding off on deployments because of the economy >> >> >> >> >> >> No, we're holding off due to lack of cash flow. We have plenty of >> >> people >> >> waiting for us to build infrastructure out to them. >> >> >> >> >> >> >> >> 6. Have you gone to Agility...<cough> Louie the loanshark =) >> >> >> >> >> >> After much discussion, being some of the first people Agility >> >> contacted, >> >> we >> >> have not done any business with them. In my estimation, they wanted >> >> control over our business and day to day decisions, which we concluded >> >> was >> >> both unwarranted and unwise. >> >> >> >> >> >> >> >> Or any other thoughts / comments on this topic? >> >> >> >> >> >> >> >> WISP equipment is not really a "commodity" in that there is almost no >> >> market >> >> for it outside of the "maker-vendor" relationship. Other than Ebay, >> >> and a >> >> couple of people who attempt to do it piecemeal, there is no "market" >> >> which >> >> stabilizes the value of used equipment, making them a commodity you can >> >> borrow against. >> >> >> >> Perhaps it would be more useful, if vendors had the ability to get >> >> capital >> >> and create stable working and short term credit relationships with >> >> their >> >> buyers, kind of like the used car market. >> >> >> >> >> >> >> >> >> >> >> >> -Charles >> >> >> >> >> >> -------------------------------------------------------------------------------- >> >> WISPA Wants You! 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