Industry Engagement to Advance Multicultural Digital Entrepreneurship and Business Development Opportunities in Broadband and the High Tech Sector: The Government’s Role

by Latoya Livingston on August 14, 2011

This article concludes our three-part series on government and corporate industry engagement.

For the past two weeks, we have looked at initiatives telecommunications companies have been taking to advance multicultural digital entrepreneurship, initiatives that are critical in today’s ever-changing digital society. The government plays a vital role as well.

At MMTC’s annual conference last month, several high-ranking government officials discussed the government’s commitment to fostering development opportunities. The Honorable Jonathan Adelstein, Administrator for the Rural Utilities Service (RUS) at the U.S. Department of Agriculture (USDA); Edward Lazurus, Chief of Staff at the FCC; and A. John Shoraka, Regional Administrator of the Small Business Administration (SBA), provided information on the strides the government is making to ensure diversity in digital entrepreneurship.

The Department of Agriculture

According to Commissioner Adelstein, “The USDA is like a bank…. A bank with the mission of serving others that wouldn’t get access to loans otherwise.” Commissioner Adelstein spends his time at RUS providing services for rural Americans, 20 percent of which are minorities, and ensuring that these services are in tune with the concerns of the minority and tribal communities that he serves. The 40 loan and grant programs that the USDA currently has are a positive step toward its investment in rural areas.

Over the past year, the USDA focused on and met its goal of completing its $3.5 billion rural broadband obligations via the 2009 Recovery and Reinvestment Act. Twenty-five of those packages, totaling approximately $110 million, were awarded to minority and tribal companies. The USDA is currently accepting applications for its farm build loans and is ready to award at least $300 to $400 million to promising applicants.

According to Commissioner Adelstein, the goal this year will be moving forward with USDA’s commitment to diversifying the kinds of programs that it funds. In the broadband realm, the USDA held workshops educating rural Americans on the technology’s assets, at least of dozen of which were focused on minority and tribal communities. The Commissioner also spoke on job creation, providing a platform for new jobs, and the two B’s: “building on” (building business on the broadband networks and expanding existing businesses) and “building out” (getting broadband access to unserved communities).

The Federal Communications Commission

In the coming year, the FCC plans to rely on its OCBO office to match small business owners and potential investors by hosting roundtables to bring the two together. Although this is a great program that will help many, the significant decrease in funding for the two main FCC offices that deal with diversity issues will most certainly hinder the agency’s ability to help. To alleviate some of the strain on the programs, Lazurus and the FCC will rely on new rulemakings on topics such as a new window for low power FM, media ownership review, a study focused on minority ownership, and its recent adoption of an order expanding tribal binding credits. Lazurus also noted that the extremely effective FCC Diversity Advisory Committee has been brought back to life.

Most significantly, the FCC’s incentive auction proposal, which is currently under Congressional consideration and in both the President and Ryan budget proposals, will be able to free up spectrum for mobile broadband. Specifically, the legislation would allow broadcasters to voluntarily participate in auctions to turn over, and receive the proceeds of, their spectrum. Lazarus and the FCC see this is an opportunity for struggling small businesses to get funds, allow spectrum sharing, lower operating costs, and provide the option to take advantage of monetizing spectrum.

The Small Business Administration

According to Shoraka, small businesses account for two out of every three new hires, and over the past 15 months, they added 2 million private sector jobs to the U.S. economy. Shoraka stated that the SBA is proud to provide “The Three C’s” – capital, contracts, and counsel – to entrepreneurs to help them as they contribute to the economy.

The SBA doesn’t provide direct loans to entrepreneurs, but it does provide government backed guarantees to banks to ensure that those seeking loans have a chance. For example, the SBA supports community oriented lenders that provide up to $50,000 in loans to businesses. Plus, the SBA is enacting new programs – the small loan advantage program and the community advantage program – which are designed to give new access to funding. And last, but not least, the SBA’s new Impact Fund will provide $200 million for companies in underserved communities through loan matching.

Moreover, the SBA does its best to ensure that at least 23 percent of all government contracts go to small businesses, a goal that the Obama Administration is serious about improving upon, but was .3 percent off of actually achieving this year. In addition, the SBA provides free counseling through community small business development centers, mentorship programs, and financing programs. There are also partnerships with leading Fortune 500 companies that work together to foster small businesses.

Through the 2009 Recovery and Reinvestment Act and the Small Business Jobs Act, the SBA has put over $50 million into the hands of small businesses. Coupled with small business tax cuts, this has served to level the playing field for small businesses, resulting in minority-owned businesses growing at three times the rate of other businesses.

Hope for the Future

All in all, prospects for the future of multicultural digital entrepreneurship look very promising. And although the programs that will be available to entrepreneurs through the private and public sector are breathing new life into the industry, one suggestion put forth at the conference would highly increase the effectiveness of these programs. S. Jenell Trigg, attorney and telecom policy expert at Lerman Senter PLLC and MMTC board member, suggested that the government entities, especially the FCC, provide on their Web sites a list of banks that understand the telecommunications process so that entrepreneurs applying for funding wouldn’t have to teach the banks about the process. Shoraka agreed with this suggestion, but reiterated that entrepreneurs also come to their office for counseling, while Lazurus said that he would follow up on the suggestions. Adelstein pledged to work with the other government agencies to see if the suggestion can be achieved. Hopefully, all of the government agencies will be able to come together and get this simple, but beneficial, list together. Nonetheless, entrepreneurs should feel optimistic about the coming year and the opportunities that will abound.

  • Latoya Livingston

    Latoya Livingston is a Washington, D.C.-based attorney with years of experience working in the public and private sector. Attorney Livingston joins MMTC after performing pro bono work for the organization last year.

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  • John_Q_Public

    This is a great overview. It’s nice to see that the government has launched so many programs related to minority digital entrepreneurship. Let’s hope they keep their noses to the grindstone and develop policies that can really bolster opportunities for minorities.

  • John_Q_Public

    This is a great overview. It’s nice to see that the government has launched so many programs related to minority digital entrepreneurship. Let’s hope they keep their noses to the grindstone and develop policies that can really bolster opportunities for minorities.

  • SoCalEntrepreneur

    I believe the government plays a critical role in ensuring opportunities for all, especially in emerging industries. Too often we see a generation of all-white, or almost so, employment in new and emerging sectors, then a struggle to catch up.

    Everyone loses with that passive approach.

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