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Document prepared by:

400 Old Vine Street, Suite 205

Lexington, KY 40507

In partnership with:

Funded by a grant from:

Steve Vail – The

ETL Group

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A Message from SKED’s Executive Director ................................................................................................. 2

Project at a Glance ........................................................................................................................................ 3

In-Depth Project Description ........................................................................................................................ 4

Broadband Analysis ......................................................................................................................................... 7

Budget .......................................................................................................................................................... 8

Economic Impact Analysis .............................................................................................................................. 9

Funding Best Practices & Project Opportunities ............................................................................................ 11

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April 25, 2017

Mr. Darrell Maynard

Eastern Telephone & Technologies

106 Power Drive

Pikeville, KY 41501

Dear Mr. Maynard:

Congratulations on the selection of your project, Teleworks Digital Employment Zones (TDEZ), as a finalist

for the Southeast Kentucky Economic Development Corporation (SKED) Moving Eastern Kentucky Forward

with Broadband initiative. This Economic Development Administration funded project has brought together

the resources to provide a thorough evaluation of your proposal. Through this process we have worked

together to verify project cost, job creation, broadband connectivity, economic impact, and possible funding

sources. Through these analyses, SKED and our partners at Thomas P. Miller & Associates, MSE of Kentucky,

and Steve Vail – The ETL Group understand your project, job creation, and investment in the region.

The TDEZ’s are an innovative solution to bringing broadband connectivity to our smaller communities in

the region and helping to scale the Teleworks USA program in those communities. By working to bring a

fixed wireless broadband network to small communities like Wayland and Lynch, and partnering with

Teleworks USA for training and job placement, the potential to create 220 jobs where none existed before

is exciting. These 220 jobs will have a direct impact of putting more than $4.6 million in salaries into the

region and increase the gross regional product by another $3.7 million.

As Executive Director of the Southeast Kentucky Economic Development Corporation, I support this

project and stand ready to work together to move this forward.

Sincerely,

Brett Traver

Executive Director

Southeast Kentucky Economic Development Corporation

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KEY DATA Counties: TBD, 20 potential City/Community: TBD Unemployment Rate: TBD

Coal Jobs Lost <2 years: TBD New Full Time Equivalent Jobs (2,080 hrs/yr.) <2 years: 220

New Average Hourly Wages*: $10.15

Project Sector and/or NAICS: Telecommunications

Funding Request / Support Needed: $2,000,000

Private Capital Investment Committed: N/A

Site Infrastructure Cost: $1,500,000 Existing Building/Site Cost: N/A

Potential Funding Agencies: USDA

Contact Name: Darrell Maynard Phone: 606-432-0043 Email: Darrell.maynard@ettky.com * Source: Eastern Telephone & Technologies and Emsi

Eastern Telephone & Technologies, in concert with Eastern Kentucky Concentrated Employment

Program’s Teleworks USA and the Kentucky Highland Promise Zone, will collaborate to identify broadband

and employment-challenged areas where affordable broadband infrastructure can help create work-

from-home opportunities.

Upon designation, Eastern Telephone & Technologies will deploy fiber-fed broadband systems in 11 or

more small communities to build a targeted, affordable, high-speed broadband infrastructure. At this

time, the most likely top two initial communities would be Lynch in Harlan County and Wayland in Floyd

County. These communities would become Teleworks Digital Employment Zones (TDEZ), where Teleworks

USA would then promote, train, and place jobseekers in digital work-from-home jobs.

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Expanded Project Narrative – From Eastern Telephone & Technologies

Targeted Communities. Affordable Robust Broadband. Digital Work-From-Home Jobs.

As the region works to diversify our economy, especially in the wake of the loss of thousands of coal jobs,

it is a priority to fully capitalize on the economic and employment opportunities provided by the "digital

economy". In Jackson County, Kentucky, companies like People's Rural Telephone Cooperative (PRTC) and

Teleworks USA have demonstrated that an affordable robust broadband infrastructure creates a level

playing field for job seekers seeking work-from-home jobs.

The Teleworks Hub in Jackson County, one of Teleworks USA's six currently operating Kentucky Hubs, has

placed 249 job seekers into work at home jobs over the last 23 months. This success is contributed to the

pool of over 70 companies Teleworks USA represents for work-from-home job placement and PRTC's

deployment of an affordable broadband infrastructure that delivers minimum speeds of 15/15 Mbps. This

is unlike the typical 6/1 or 25/1 Mbps Internet service that most private sector telecommunications

companies, cable operators and Internet service providers offer today for average monthly prices

exceeding $75.

Most Eastern Kentucky communities have pricey, poor quality broadband because the return on

investment for the capital needed for the private sector to deploy better affordable broadband is too long

and too little. Jackson County is among only a handful of Eastern Kentucky counties that have invested in

the broadband infrastructure necessary for someone to be able to work from home affordably. This

presents a challenge and opportunity for the other counties within the Southeast Kentucky Economic

Development (SKED) service area that are not equipped with affordable robust broadband.

This unique public-private partnership seeks to bridge the digital divide and create jobs through the

Teleworks Digital Employment Zones (TDEZ) initiative will start with Eastern Telephone & Technologies,

Teleworks USA and the Kentucky Highlands Promise Zone working together to identify 11 broadband and

employment challenged communities where an affordable broadband infrastructure can be built to

create work-from-home opportunities. At this time, the most likely top two initial communities would be

Lynch in Harlan County and Wayland in Floyd County.

Eastern will then deploy a fiber-fed broadband infrastructure at a target rate of 25/25 Mbps delivery

speed to community citizens who would be able to use an affordable high-speed Internet connection for

digital work at home jobs. These communities would be certified as Teleworks Digital Employment Zones

(TDEZ). After a community is certified, Teleworks USA would promote, train and place jobseekers in digital

work-from-home job opportunities.

PHASE 1: Letters of Support - Currently, the TDEZ initiative has received 10 letters of support from Eastern

Kentucky communities and over 15 more have verbally committed with a letter of support to follow. After being

surveyed, the top 11 communities will be selected as TDEZ communities based on need and desire demonstrated.

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PHASE 2: Broadband Deployment - After the top 11 communities are determined, Eastern will perform

the engineering and deployment for the fiber-fed infrastructure that will consist of four components:

1. Broadband Gateway - This is the KentuckyWired connection needed to serve the TDEZ infrastructure and

is the gateway to the World Wide Web. Not all TDEZ communities will have access to the KentuckyWired

route immediately. In the interim, private sector alternatives will be used for this connection although the

end user pricing could be lowered after a KentuckyWired connection is available.

2. Backbone - Each Teleworks Digital Employment Zone (TDEZ) will require its own, much shorter,

version of the KentuckyWired fiber backbone through its community. Most of these fiber routes will

be less than one mile in length.

3. Last Mile - The last mile is the connection from the TDEZ community backbone and the dwelling, either

residential or business. To achieve a low monthly broadband price and target speed of 25/25 Mbps, the

last mile connection will be high-speed fixed wireless. As the need arises for higher speed connection, a

fiber drop could be available to most locations within the TDEZ community.

4. Continued Maintenance, Customer Service and Billing - Sustainability is paramount to the success of

this project. Eastern will continue the maintenance and support necessary for the ongoing operation

of this project.

PHASE 3: MARKETING AND RECRUITMENT - As each TDEZ is completed and certified, the community and

Teleworks USA will identify employment candidates from within the community through advertising, job

fairs, interviews, and other marketing strategies.

Traditionally, Teleworks USA has used Hubs for training facilities. For this project, a mobile training unit

will be the primary training facility used at each TDEZ community in combination with Hubs already in

existence. The goal is to recruit and train and average of 20 employees in each TDEZ community for an

overall goal of 220 jobs created.

Workforce Plan – From Eastern Telephone & Technologies

The Teleworks Digital Employment Zones (TDEZ) initiative will allow for not only the expansion of

affordable, high-speed broadband into single-family homes and multi-family residential units in at least

11 Eastern Kentucky communities that currently lack such broadband access, but will also allow citizens

to participate in focused, short-term training workshops in customer service, tech support, and digital

literacy as necessary when applying for and securing meaningful, remote, work-from-home employment.

The Workforce Plan for this initiative involves four features:

1. Certified Internet Service Requirement: Successful work-at-home employment requires broadband

meeting or exceeding minimum download and upload speeds of 10/10 meg and be offered at an

affordable price. TDEZ target speed and price is to provide a 25/25 meg connection at $50/month.

2. Personal cost savings: TDEZ's employment opportunities are geared exclusively toward remote-work jobs.

Individuals will work either full or part time, using their home computer, phone, noise-canceling headset,

and other related equipment. It is expected that an average TDEZ teleworker will save approximately

$3,581.16 in annual out-of-pocket costs associated with commuting. This figure is derived by reducing or

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eliminating annual commuting expenses including gas and car maintenance ($809.16); professional

wardrobe, dry cleaning and laundering ($1,190); daily lunches and coffee ($832); and possible tax breaks

for having an at home office ($750) (Source: Salary.com, 9 Ways Working from Home Saves You Money).

3. "Bridging the Gap" in advance of coming broadband improvements: TDEZs bridge the gap between

the current lack of widespread, high-speed broadband availability and the coming KentuckyWired

initiative. Currently, broadband availability negatively impacts Teleworks USA's ability to expand.

Though all Teleworks Hub facilities have high-speed fiber broadband access, some of those Hubs are

located within counties that lack reliable county-wide broadband. This affects Teleworks USA's model

to train and prepare teleworkers in the Hubs, house them in temporary, short-term workspaces, and

later relocate into permanent home offices. Relocation opens those hub workspaces up to new trainees

and teleworkers. This is illustrated through the Hazard and Annville Hubs. Efforts at the Annville Hub

have produced 249 telework jobs since January 2015, yet only 5 people routinely work in that facility's

14 available telework workspaces. By comparison, the Hazard Hub has produced 124 telework jobs in

that same time, but that facility's 19 workspaces are full and have remained full for months-because

Perry County lacks reliable, county-wide broadband access necessary for relocation into home offices.

4. Telework employment in multi-family residential units: TDEZ will provide not only fixed wireless broadband

in single-family home, but also to multi-family residential units. To potentially avoid conflict with HUD

housing assistance, the multifamily focus will be on part-time and/or seasonal telework jobs providing

critical, supplemental personal income. Through TDEZ, these citizens will be able to work part-time telework

jobs in their home-office area in their housing units and build key work experience without loss of benefits.

Community Support Eastern Telephone & Technologies has documented declarations of support from the following community partners:

Dream Martin County Co-Chair, R. Eric Mills;

Henderson Settlement Executive Director, Mark Lemons;

City of Hyden Mayor, Carol Joseph;

Lawrence County Judge Executive, John Osborne;

Letcher County Judge Executive, Jim Ward;

Pike County Judge Executive, William Deskins;

Housing Authority of Pikeville Executive Director, Stephen Burchett;

City of Prestonsburg Mayor, Les Stapleton;

Red Bird Mission Executive Director, Kari Collins;

City of Wayland Mayor, Jerry Fultz.

These letters of support are available upon request. Additional support has been secured from the City of

Lynch, Martin County, and Meridzo Ministries.

All of the Teleworks Digital Employment Zones (TDEZ) communities identified, except for Pikeville, are

classified as "Distressed" counties by the Appalachian Regional Commission (ARC), and therefore qualifies

the project for the lowest local in-kind or funding match requirement of 20 percent.

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The Lynch site is over five miles from the nearest Kentucky Information highway (KIH) site. The Wayland site is

located four miles from the planned KentuckyWired backbone and would require a currently unplanned access

site on the fiber backbone. There is only one anchor institution in the Lynch area and none in the Wayland

area. Both project sites have a low business density. A positive note is that there are fiber assets to cell towers

in this area and this project is intending to utilize wireless with the backhaul over this existing fiber to cell tower

infrastructure.

Project Site Locations City County Nearest KIH Site

Locations not specified Lynch Harlan 5.9 miles

Wayland Floyd 4 miles

Description Score Connectivity/Access to KY Wired I-Way Current Fiber Assets in Project Area Anchor Institution Density in Project Area Potential Future Fiber Customers in Project Area

Scoring Notes:

Connectivity/Access: Green rating indicates access to KIH Site(s) is nearby. Yellow rating indicates

challenges in both distance and cost to access KY-Wired network.

Current Fiber Assets: Green rating indicates current or near term completion of fiber investments in the

project area. Yellow rating indicates a lack of current fiber assets in the area.

Anchor Institutions: Green rating indicates a high volume of anchor institutions within the project area.

Yellow rating indicates a low volume/number of anchor institutions within the project area.

Potential Future Fiber Customers: Green rating indicates a strong density of businesses within the project

area. Yellow rating indicates a low density of businesses within the project area.

Partnering with Teleworks USA to bring digital jobs to an at home work environment eliminates the need

for brick-and-mortar facilities. However, available, affordable and robust broadband is still required.

Jobseekers in the designated Teleworks Digital Employment Zones will need a fiber hybrid broadband

infrastructure that will deliver a target service and price of (both up and down) 25/25 Megabits per second

(Mbps), $50 price, and broadband Internet circuit connected to the KentuckyWired Middle Mile Project.

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Proposed Budget for the Teleworks Digital Employment Zones (TDEZ) Project: $2,000,000

Fiber Hybrid Fixed Wireless Broadband infrastructure = $1,100,000

Customer Premise Equipment = $200,000

Operations for 1 year = $200,000

o Marketing and Customer Care

o Broadband Gateway

Teleworks Facilities, Management & Training = $500,000

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Prepared by Thomas P. Miller & Associates

The project intends to create telework jobs for Customer Care Representatives, which would not require

them to report to any office. These will be mainly work-from-home jobs, which would require a computer,

a headset, and a fast broadband connection. Most Teleworks USA participants work for companies

headquartered outside of the region, and no data was available to estimate how many new jobs will be

with companies located within the region.

Therefore, the project’s primary form of economic impact1 will be through an increase in household

income for individuals, leading to an increase in consumption demand for goods and services within the

region, which will in turn result in an increase in sales by businesses in sectors such as hospitality, retail,

professional services, healthcare, etc.

ET&T’s application indicates the project will create 220 jobs with an average hourly wage of $10.15, or

$21,112 annually (based on 2,080 hours for a full-time equivalent worker). This would lead to an overall

increase in household income of $4,644,640. To measure this impact, the net increase of $4,644,640 in

annual salaries was proportioned using the distribution of households shown in Table 1 below.

Table 1: Household Income, Number of Households, and Share of Net Salaries2

Annual Household Income Number of

Households Share of Net Salaries

Less than $10,000 36,822 $1,300,499

$10,000 - $15,000 23,882 $836,035

$15,000 - $25,000 40,180 $1,439,838

$25,000 - $35,000 29,682 $1,068,267

Total 130,566 $4,644,640

Using the distribution of the increased income across households as specified in Table 1, the economic

contributions of these 220 Telework USA jobs was estimated using IMPLAN. The results of this analysis

are shown in Table 2 below.

Table 2: Economic Impact of 220 Telework USA Jobs Indicator Total Contribution

Jobs 30

Earnings $1,135,864

Output $3,703,223

As a result of the consumption expenditure associated with the 220 work-from-home jobs, the gross

regional product will increase by $3.7 million, which in turn leads to an additional 30 jobs and increase in

1 Analysis was performed using IMPLAN and Emsi. Details about the economic impact analysis methodology are available upon request. 2 2014. Implan was used to calculate the number of households meeting the annual household income.

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earnings of just over $1.1 million. The job multiplier is 1.1, indicating each Teleworks USA job will generate

an additional 0.1 jobs.

While these remote work opportunities may not be high-skill/high-wage jobs or lead to direct or indirect

industry changes, the social impacts of these jobs merit consideration. Teleworks USA jobs require a short

training period and provide employment for individuals with barriers to transportation and those who

may need to work from home for other reasons. Job mobility and career advancement are also available

for those who excel in the entry-level occupation.

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Preparing a Federal Grant

Federal grant opportunities usually have anywhere from a 30 day to 90 day application release

date and due date window, therefore preparation is critical.

With the change in administration with the last election, some federal departments are shifting

focus, so it is also important to subscribe to relevant department newsletters (like EDA, DOL, etc.)

to receive updates on initiatives and opportunities.

o It is also important to become familiar with typical requirements funders look for with

application, for example: with EDA funding, several grant opportunities require

understanding the community’s Comprehensive Economic Development Strategy (CEDS)

plan and incorporating that as a foundation for development of new programming.

o It is critical for all grants, particularly for federal, to have the need for the project be based

in strong evidence of poverty, challenges, disadvantages, potential impact, etc.

Timeline: Federal grants are very complex and ask for very specific requirements. In an ideal

situation, it is recommended to abide by the following timeline bulleted below. The first three

bullets can happen simultaneously, but would recommend the grant writing process have

minimal overlap.

o Program Alignment and Development: 2-4 weeks

o Data collection and Review: 2-3 weeks

o Partnership Development: 2-4 weeks

o Grant Writing: 4-6 weeks

It is rare to find a federal or state grant that will award a for-profit, most federal agencies are

looking to fund non-profits, educational institutions, etc.

Federal Funds to Consider:

Economic Development Administration (EDA)

o Get to know your state representative who can help you throughout the process and be

an incredible resource.

Pamela Farmer

Economic Development Administration

401 West Peachtree Street, NW, Suite 1820

Atlanta, GA 30308-3510

404-730-3026

pfarmer@eda.gov

o When applying, incorporate the community’s CEDS Plan and make sure to have strong

partnerships with the economic development organizations for these applications.

Department of Labor (DOL)

o The Employment and Training Administration (ETA) has announced that the agency will

no longer publish Notices of Funding Opportunities in the Federal Register. ETA will

continue to post the full texts of all ETA's Funding Opportunity Announcements (FOAs) at

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the government-wide Internet site, http://www.grants.gov, in accordance with the policy

directive issued by the Office of Management and Budget (OMB). An applicant for funding

may access the full FOA associated with a synopsis posted at http://www.grants.gov by

following the universal resource locator (URL) link included in the synopsis, or by visiting

ETA's Web site at http://www.doleta.gov.

Appalachian Regional Commission (ARC)

o According to their website, there are no opportunities at the moment, but all

organizations should get connected with their representative and regularly check the ARC

website to find out about new and upcoming opportunities.

o Get connected to the appropriate program director, and local representative.

Peggy Satterly

ARC Program Manager

Department for Local Government, Division of Grants

1024 Capital Center Drive, Suite 340

Frankfort, KY 40601-8024

502-573-2382

peggy.satterly@ky.gov

o Make sure to review ARC’s strategic plan in order to best understand how to align to their priorities

https://www.arc.gov/images/newsroom/publications/sp/InvestinginAppalachiasFuture

ARCs2016-2020StrategicPlan.pdf

o Review qualifications and determine the region’s level of distress. This will help

determine the required match.

https://www.arc.gov/appalachian_region/CountyEconomicStatusandDistressedAreasin

Appalachia.asp

Health Resources & Services Administration (HRSA)

o Check in on their website for FY2018 Prospect when it is released. Here is an example

from FY2017

o Telemedicine Network Grants

United States Department of Agriculture Rural Development (USDA)

o Rural Business Development Grants

o The primary objective of the RCDG program is to improve the economic condition of rural

areas by assisting individuals or entities in the startup, expansion or operational

improvement of rural cooperatives and other business entities. Grants are awarded

competitively on an annual basis to Rural Cooperative Development Centers who in turn

provide technical assistance to individuals and entities.

Grants are due electronically by May 26th

Preparing for a Foundation Grant

Successful funding requests with Foundations are often connected to building a relationship with

a funder to best understand their goals, and how they align to your organization.

It is best to connect with a program director at the Foundation to understand their application

process. Some require letters of intent and then invite organizations to apply. Some have open

application windows.

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Foundations also tend to have more opportunities to support capacity building and expansion

than federal funders.

Foundations to consider:

Mary Reynolds Babcock Foundation

Types of grants: Organizations may use grant funds in a variety of ways, including: o General operating support o Project support o “Glue” support for networks of grassroots and partner organizations o Organizational development support

Appalachia Funders Network

Since the Network formed in 2010, it has created the space and support for relationships to grow,

common analysis and vision to develop, and collaborations to form. It has generated five working

groups that build community capacity, leverage resources into the region, advance food and

agriculture systems, promote clean energy and protect natural resources, and support a culture

of health. Members recognize that the more relationships, common analysis, and vision we have,

the more we can align our strategies to make lasting impact on the root cause challenges holding

back the region from greater prosperity.

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Recommendations: As a multi-phase project that includes the assessment for designating areas to deploy broadband systems;

the process of laying the fiber; then trainings, it would be beneficial to consider the most effective way to

pursue funding for each phase. It is also important to consider who would be the best candidate for a lead

applicant. For the USDA grants, ET&T may be eligible, but for the implementation of trainings and the

Teleworks USA programming, it would likely be best for Teleworks USA (EKCEP) to apply and have ET&T

be a partner.

The most broadly fundable piece is the training and skills development, as there are several funders to

consider for this phase and will have a large impact on the communities. It is recommended to pursue

funding through the Department of Labor, ETA grants, or USDA. This application should emphasize the

opportunities for upward mobility into senior level positions within the technology sector. The average

wages may not be compelling to funders on the surface. To combat this, the applicant should think about

how to speak about what that kind of a salary means in the region and the opportunity for potential

growth. The best tool to support this narrative is through the utilization of socioeconomic data.

For-profit organizations are rarely eligible for grants so it is also recommended to have the lead applicants

be the city governments or a non-profit organization, where possible.

Potential Funders to consider for alignment:

USDA

City Connects Grant: https://www.rd.usda.gov/programs-services/community-connect-grants

o This program helps fund broadband deployment into rural communities where it is not

yet economically viable for private sector providers to deliver service. For more

information on other programs administered by RUS Telecommunications please visit:

http://www.rd.usda.gov/programs-services/all-programs/telecom-programs

This opportunity is currently closed for this year, but would be one to consider

for the upcoming year if USDA releases the opportunity again- they have released

it in 2015 and 2016.

Rural Business Development Grants: https://www.rd.usda.gov/programs-services/rural-

cooperative-development-grant-program

o The primary objective of the RCDG program is to improve the economic condition of rural

areas by assisting individuals or entities in the startup, expansion or operational

improvement of rural cooperatives and other business entities. Grants are awarded

competitively on an annual basis to Rural Cooperative Development Centers who in turn

provide technical assistance to individuals and entities. This grant can be used for

feasibility studies, which would be an ideal use of funds to help ensure successful

designation of this project.

Grants are due electronically by May 26th

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Recommendations: As ET&T is a private firm, state or local economic development incentives may be possible. Most economic

development incentives require job creation of 10 net-new full time jobs (2,080 hours / year) or more, a

capital investment, and may be required to align with target industries. ET&T should work directly with

SKED on determining eligibility for potential incentives.

Commonwealth of Kentucky Cabinet for Economic Development http://www.thinkkentucky.com/Locating_Expanding/kybizince.aspx