xTCA Vendors Can Get a Cut of the US Stimulus

By Ernie Bergstrom, Crystal Cube Consulting

Who will benefit from the huge stimulus package recently approved by the US federal government and being injected into the American economy? Well for starters, the package has “ear-marked” items which will provide immediate funds for telecommunications.

The $7.2 billion broadband stimulus package will provide grants and credits for the build-out of high-speed Internet connections to underserved communities such as rural areas and small towns. It will be the first time the US federal government has paid to spread broadband services to homes on a large scale.

The idea here is to bring more people into the digital age, as well as to extend the benefits of improved communications for education, healthcare, industrial development, agriculture, and other areas.  Big beneficiaries are likely to be major telecom and cable companies such as AT&T, Verizon Communications, and Comcast. But rural phone providers such as Frontier Communications could benefit the most relative to their size.  This broadband rollout will surely benefit providers of standard COTS platforms such as AdvancedTCA and MicroTCA as telcos increase their equipment order rates. 

So far, about $350 million has been allocated for the mapping of broadband availability in the US. $2.5 billion has been assigned to the USDA’s Rural Recovery Service (RUS). The remaining money goes to the National Telecommunications Information Administration (NTIA). After the mapping is completed, which is projected for Q2 2010, grants will be accepted and approved for the RUS build out and the NTIA. Obviously, this schedule means that significant equipment orders will not occur before 2011. 

The enormous $17 billion healthcare stimulus also may yield opportunities to xTCA platform vendors as clinics and hospitals convert from paper to electronic (E-) records. This conversion is sorely needed to reduce costs, minimize errors, and provide access to doctors throughout the country. For example, the Veterans Administration converted to E records nationally two years ago. Any veteran can walk into a VA clinic or hospital anywhere in the nation and have his or her records available to the attending doctor. Only 20% of all hospitals in the U.S. have already converted to E-records. Equipment revenues from such applications could start as soon as 2011.  The size of this package means that even if only a tiny percentage of the money goes to xTCA platforms, the net effect could still be huge. 

The opportunities for open system platforms are strong, but providers must begin working with customers who will do the actual grant writing. Customers going after RUS stimulus dollars will be telecommunications service providers. The NTIA customers will be government units such as townships, cities, counties, and states.  As is usual in government rollouts, things are starting up slowly. But initial milestones are in view, and it is surely time for xTCA vendors’ marketing and sales teams to put their plans into motion.

Ernie Bergstrom is President of Crystal Cube Consulting and a Contributing Editor to the ATCA Newsletter. You can reach him at ernie@atcanewsletter.com.