Lawyers are gearing up for what could be a significant amount of legal work tied to funds in the federal economic stimulus bill designed to expand and improve the nation’s broadband infrastructure.
The stimulus bill, which was passed on Feb. 17 as the American Recovery and Reinvestment Act of 2009, allocates $7.2 billion for the development of broadband infrastructure, which provides high-speed Internet access. Public comments about the details of the funds ended on April 13, with applications for the first round of grants due in a few months.
Many law firms, particularly those with experience in federal government grants and telecommunications, are advising clients on what kinds of projects could attract funding. Lawyers at those firms anticipate considerable work helping clients prepare successful grant applications.
“I anticipate it will be a fairly significant amount of work for lawyers because I think there are going to be possibly thousands of grant applications filed with these agencies asking for these stimulus funding grants,” said James M. Smith, of counsel to the Washington office of Seattle’s Davis Wright Tremaine.
“That is going to require a fairly complex and well-crafted application, and that is going to entail outside counsel work,” Smith added.
Jockeying for position
The stimulus bill allocates $4.7 billion in funds to inject broadband access into unserved and underserved communities, as well as public safety agencies, schools, libraries, health care organizations and community groups, according to the bill. Another $2.5 billion in the stimulus bill targets broadband development in rural communities.
Last month, the Federal Communications Commission (FCC), the U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA) and the U.S. Department of Agriculture’s Rural Utility Services (RUS) launched the stimulus bill’s broadband initiative and began taking public comments about which specific projects should be considered.
As part of the initiative, the FCC has begun development of a national broadband plan, while the other two agencies are tasked with drafting proposals for three rounds of grants to be awarded within the next year.
Some law firms got a head start by helping draft the broadband provisions of the stimulus legislation.
Kelley Drye & Warren, for instance, has been advocating for the bill since October and providing public comments to the NTIA and the RUS on behalf of various clients, including the Fiber-to-the-Home Council and XO Communications, said Thomas Cohen, a partner in the Washington office of the New York-based firm.
Cohen, a former assistant general counsel at the FCC, said at least three attorneys at the firm are working “extensively” on the broadband stimulus plan, hosting online seminars and traveling throughout the country to talk to clients.
John Padgett, a partner in the Norfolk, Va., office of Richmond, Va.’s McGuireWoods, said his firm has about a half-dozen lawyers focused on the broadband stimulus funds.
“We’re in the process of sending communications to targeted clients and individuals to discuss the opportunities, and also have had discussions about jockeying for position and getting ready for the bid process,” he said.
At Fletcher, Heald & Hildreth, a communications law firm, five lawyers are updating clients on the regulatory process of the broadband provisions, advising them on how to file public comments and prepare for the application process, said Paul Feldman, a member of the Arlington, Va.-based firm.
“We are definitely already assisting clients in connection with these programs and believe that legal work will expand and continue at least for a good portion of the funding cycle,” he said.
In particular, he said, the firm has advised clients to track what type of projects their local and state political officials consider important in order to boost their chances for funds.
Fletcher Heald clients that are most interested in the broadband funds are telecommunications providers, he said, but others include police and fire departments and Indian tribes, which often provide broadband services to their own members.
The legislation’s broad scope means that not only telecommunications lawyers but attorneys in corporate and government contracts, who are familiar with the grant process and documentation, should be involved in the grant process, said Jack Nadler, a partner in the Washington office of Squire, Sanders & Dempsey.
“The law firms that will serve their clients best will be the ones that don’t view this as an opportunity for one particular group, but across practice group lines, in order to put together a team of lawyers that has the right combination of industry expertise and legal skill sets to address the different challenges clients will face as this program goes forward,” he said.
For instance, one of the areas that Congress has identified as a priority is “telemedicine,” which encompasses lawyers in both the telecommunications and health care practices, he said.
In preparation for the grant proposals, many law firms are already discussing potential project ideas with their clients.
“The stimulus act is all about injecting dollars into the economy — shovel-ready projects, building things, creating jobs,” said Smith of Davis Wright Tremaine, where a dozen lawyers are expected to be involved in the broadband stimulus grants.
“I’ll be focused on helping clients devise the best possible projects that stand the greatest chance of success under the criteria that the stimulus act has set up,” Smith said.
Smith anticipated that most of the grants would go to broadband companies such as telecommunications carriers and cable operators seeking to extend their services. But nonprofits and public entities, such as states, counties and cities, as well as public/private partnerships, could benefit, also.
At Fox Rothschild, for example, previous projects providing Internet access through the use of public/private partnerships fit “squarely within” the broadband provisions of the stimulus plan, said Alan Wohlstetter, head of the infrastructure group at the Philadelphia-based firm, where a team of five attorneys is working with clients on obtaining broadband stimulus funds.
One of Wohlstetter’s previous projects was a partnership between EarthLink Inc. and Wireless Philadelphia, a nonprofit organization that helps put broadband services into the homes of low-income residents.
He said the broadband stimulus funds could help address “digital divide issues throughout the state using a model that is created by Wireless Philadelphia.”
Greg Goldman, chief executive officer of Wireless Philadelphia, said he plans to apply for funds to help the organization continue to provide a package of services to low-income households that includes broadband accounts, computers, individualized training and customer support.
Right now, that package costs about $1,200 per household, he said.
Most of the organization’s past funding has come from local private foundations, corporations and some public agencies. Goldman generally uses outside counsel to advise his organization about how to approach governmental agencies with funding requests.
But the broadband stimulus funds are “a new ball game,” he said.
“The idea of applying for federal funding for a small agency like ours, with a small budget and small staff, is likely to be a more involved and complicated process,” he said.
Other types of partnerships could prove useful in getting a grant application to stand out from a load of competitors, said Judy Harris, a partner in the Washington office of Reed Smith.
Although Reed Smith has several clients “right in the sweet spot” of the broadband stimulus funds, she is encouraging them to partner with others to prepare a better project proposal, she said.
For instance, a rural telecommunications carrier that operates in Vermont could have a better shot at obtaining funds to provide broadband access to unserved communities if the state of Vermont already has an infrastructure road map indicating gaps in access, she said.
Further, a local advertising firm could partner with that same carrier to launch an educational campaign on why broadband access is important, and community centers could provide training for residents unfamiliar with computers or the Internet.
As part of the same project, an equipment manufacturer could agree to provide the computers, or a local college could provide additional training online, she said.
And all those details need to be in place fast, she said.
“This has some pretty tight deadlines,” she said of the broadband funds. “All the money has to be awarded by September 2010, which is really right around the corner.”
Once the grants are gone, legal work associated with the projects won’t shut down, said Nadler of Squire Sanders.
“There’s going to be significant government oversight of these programs and so there will be a role for lawyers to counsel clients to ensure that they are in full compliance with the many terms and conditions that are going to be imposed in any grant agreement,” he said.
He also predicted that audits and possible investigations tied to that oversight could prompt another use for lawyers.
“There will be opportunities for lawyers to make significant contributions literally at every stage in the process over the next few years,” he said.