Latest / Prompt Air / The BEAD - POGGY BAIT 2030

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The BEAD - POGGY BAIT 2030 · Prompt Air

• 0:00
  We are looking at a receipt today that is, frankly,
• 0:03
  eye -watering. A cool $1 .05 billion. That is
• 0:07
  the price tag allocated to Wisconsin just to,
• 0:10
  you know. get people online for the BEAD program.
• 0:13
  Right. The Broadband Equity Access and Deployment
• 0:15
  Program. Exactly. And our mission for this deep
• 0:18
  dive is to unpack the financial gymnastics in
• 0:21
  these source documents. We've got government
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  plans, corporate prospectuses, and it's not just
• 0:25
  about digging ditches. It's a wild game of capital
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  stacks, conduit bonds, and this highly confidential
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  strategy called shorting the lines. So if you
• 0:34
  are listening, you're going to want to stick
• 0:35
  around for that last part. It really is a high
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  stakes game. Because the mission sounds simple
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  on paper, you know. Close the digital divide.
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  Get fiber, satellite, or fixed wireless out to
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  the most unserved locations. But the reality
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  is the companies accepting this mission are walking
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  a well. A financial tightrope. A very thin tightrope.
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  Because looking at the cost, I mean, I saw one
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  figure that made me do a double take. Over $142
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  ,000 per mile for underground fiber. Yeah, $142
• 1:01
  ,560 to be exact. And that is the high end. But
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  keep in mind that labor is up to 80 % of that.
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  You are physically boring through rock or trenching
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  through frozen Wisconsin ground. So who actually
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  steps up to write checks that big? I'd assume
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  it's just the massive telecom giants. We have
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  tiers of players. Tier one is exactly who you'd
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  expect. Giants like Brightspeed or Bertram Communications
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  taking down awards north of $30 million to wire
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  up multiple counties. They actually have the
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  balance sheet. to handle that upfront cost. But
• 1:32
  I noticed some much smaller names in the Tier
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  2 and Tier 3 lists, like the Pierce -Pepin Cooperative
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  or the Lac du Flambeau Band. How do they even
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  compete with a giant like Brightspeed? They compete
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  on community trust, which is really the hidden
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  variable here. To dig that $142 ,000 mile, you
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  need easements, permission to dig on private
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  property. A local co -op or a tribal entity can
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  often get those signatures way faster than a
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  national corporation because they are neighbors.
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  So they don't have the scale, but they have the
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  speed. Okay, but even with speed, you still have
• 2:02
  to pay the crew. And the documents mention this
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  terrifying concept called the Valley of Death.
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  I assume that is not a geographic location in
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  Wisconsin. No, no, it is a terrifying location
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  on a balance sheet. It is the time gap between
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  spending millions to dig the trench and actually
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  signing up the first customer to pay you. maybe
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  $80 a month. That cash flow gap can easily kill
• 2:24
  a company. So how do they survive it? Creative
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  financing. Take BugTussle, for example. They
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  aren't just taking out standard bank loans, they're
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  using conduit bonds. Which means what exactly?
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  It means they leverage a county's credit rating.
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  The county backs the bond with a social bond
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  designation, which lowers the interest rate significantly.
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  That strategy allowed BugTussle to fund over
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  1 ,200 miles of fiber. But there's another way
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  to survive this spend, which is to stop building
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  everything yourself. Outsourcing the infrastructure.
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  In a way, the smart players are realizing they
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  can't afford to build proprietary data centers
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  anymore. So they integrate directly with partner
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  networks like Google Cloud. They shift the heavy
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  processing costs to big tech rather than buying
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  their own servers, which keeps that valley of
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  death. Pretty shallow. Okay, so that's how you
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  build the road and fund the road. But then I
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  got to this confidential appendix about Dexter
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  Monroe LLM Holdings, and I feel like we stepped
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  into a different dimension. They aren't trying
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  to sell internet service at all, are they? Not
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  even a little bit. This is where the model pivots
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  entirely from a utility to pure monetization.
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  Dexter Monroe is using a strategy they call shorting
• 3:30
  the lines via an asset deferred swap. Shorting
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  the lines. That sounds like Wall Street lingo
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  applied to a construction site. How does that
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  actually work in the dirt? Think of it like this.
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  Dexter Monroe doesn't want to be the landlord
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  dealing with leaky faucets. They just want the
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  penthouse. Instead of spending that $142 ,000
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  per mile to dig the trench, they let the ISPs
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  build the infrastructure. Then they swap capital
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  for a 12 -strand dark fiber feed. Right inside
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  those same cables. Let someone else do the dirty
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  work. Take a dedicated lane on the highway. Exactly.
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  Because they do not care about a $100 monthly
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  subscription fee from a homeowner. They are chasing
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  a volumetric compute model. They want to generate
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  $1 ,250 per month. That is a massive jump. What
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  are they selling that is worth $1 ,250 a month?
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  Sovereign cloud architecture. Basically turning
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  that fiber node into a mini supercomputer for
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  AI processing and tokenization. They aren't selling
• 4:26
  access to the web. They are selling the ability
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  to process massive amounts of AI data locally,
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  completely bypassing the public Internet. And
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  to power this, I have to ask about this term.
• 4:36
  P -O -G -G -Y bait eight F -O -Bs. I know poggy
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  bait is military slang for candy or snacks. Are
• 4:42
  they putting candy machines in data centers?
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  It's a very colorful code name. It refers to
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  forward operating bases. But look at the economics
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  here. They are powering these localized data
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  centers with Second Life Rivian batteries. Oh,
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  so it's not just cool tech. It's incredibly cheap.
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  Precisely. Used EV batteries are perfect for
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  stationary storage. It lowers their operational
• 5:02
  expenses significantly, allowing them to run
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  these encrypted mesh networks at a fraction of
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  the cost of a traditional data center. They are
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  capturing high -margin data transport while everyone
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  else is fighting for low -margin Internet subscribers.
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  It really frames the internet differently. On
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  one side, you have traditional ISPs fighting
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  through permit delays to get us Netflix. On the
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  other, you have this model trying to turn the
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  fiber itself into a high -yield compute asset.
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  And it leaves you with a thought. If the real
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  money is in turning every neighborhood node into
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  a localized AI brain, what happens to consumer
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  privacy when the very infrastructure that connects
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  us prioritizes machine learning over human communication
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  might be something to keep an eye on. Thanks
• 5:42
  for joining us on this deep dive.