re Broadband Stymied

[Dave Farber <dave () farber net>]

Begin forwarded message:

> From: "Jonathan S. Shapiro" <shap () eros-os org>
> Date: March 15, 2010 1:17:20 PM EDT
> To: dave () farber net
> Subject: Re: [IP] Broadband Stymied

> [For IP, if you like]
>
> While I appreciate Brett's frustration about grants and sole  
> proprieterships, the NTIA and USDA rules about sole propriare  
> exactly as they should be, and the complaint he articulates in this  
> regard is nonsense. It costs next to nothing for his local ISP to  
> form an LLC, and LLC's are a corporate form accepted for most  
> government grants.
>
> When operated by a single individual, the LLC has no worse tax  
> consequences than operating as a sole proprietership, and some  
> advantages. Critically, from the government perspective, the  
> accounting practices of an LLC serve to cleanly separate the  
> finances and accounting of the individual from the finances and  
> accounting of the organization receiving the grant. Given the level  
> of fraud associated with government grants across the board, this  
> accountability is not something that the government can or should  
> agree to sacrifice. From a personal perspective, having run  
> businesses both ways, I'ld *never* go back to a sole proprietership  
> approach. Never mind what the government wants; the accountability  
> discipline is too important to me as a business operator.
>
> Perhaps there is more to the story than Brett recounts, but if the  
> root problem is that the local ISP can't get it together enough to  
> file the LLC paperwork, they *certainly* aren't together enough to  
> be running around with my tax money.
>
>
> Jonathan
>
> On Mon, Mar 15, 2010 at 9:50 AM, Dave Farber <dave () farber net> wrote:
>
>
>
>
> Begin forwarded message:
>
> > From: Brett Glass <brett () lariat net>
> > Date: March 15, 2010 11:37:23 AM EDT
> > To: dave () farber net, ip <ip () v2 listbox com>
> > Subject: Re: [IP] Broadband Stymied
>
> > All:
> >
> > Agree that the stimulus effort has, so far, produced few useful  
> > results and perhaps has been counterproductive.
> >
> > Ironically, my own ISP -- which is typical of many that bring  
> > service to unserved rural areas -- is not even eligible to receive  
> > funding. Why? Because it a sole proprietorship -- the most common  
> > form of small business in the US -- and not a corporation.
> >
> > Yes, that's right. According to the NTIA and USDA rules, only  
> > corporations need apply for the money.
> >
> > When I asked a high level administrator why, he replied, "We can't  
> > give grants to individual persons." I pointed out that corporations  
> > are nothing but fictitious persons, and asked, "Would you rather  
> > loan money to a fictitious person or a real one, which won't  
> > dissolve in the middle of the night and has real assets such as a  
> > home that he or she doesn't want to lose?"
> >
> > He had no good answer.
> >
> > As a result, all we can do is hope that a corporation applies for a  
> > grant for our area and that we can then leverage the "open access"  
> > rules (which discourage such applications) to get onto any  
> > infrastructure that is built.
> >
> > The stimulus program has also allowed grant recipients to "cherry  
> > pick" areas that they want to serve, whilst ignoring others that  
> > are in greater need of service.
> >
> > For example, it has been reported that Level3 -- the nationwide  
> > fiber company -- has received several grants to open up points of  
> > presence along its fiber routes in the Midwest.
> >
> > My own city, however, has been asking Level3 to open up a POP for  
> > years. And it has one already built; the building is already  
> > equipped and ready, and requires only an investment of about $150K  
> > (in optronics and splicing) to open.
> >
> > But will Level3 open up a POP here -- or anywhere in Wyoming? Nope.  
> > Our state has been "redlined" -- apparently due to low population  
> > density. And the NTIA and RUS grant program didn't require the  
> > company to serve markets that were actually in the most need.
> >
> > Such dysfunctional behaviors are one reason why we should not  
> > expect too much of the stimulus.
> >
> > --Brett Glass
> Archives        



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