PCCA Journal 3rd Quarter 2009

The Official Publication of the Power & Communication Contractors Assocation 3rd Quarter 2009 Also Inside: • $4 Billion in Stimulus Funds for Increasing Broadband Access • Is Power Construction the Silver Lining? • PCCA’s Rocky Mountain Mid-Year Henkels & McCoy Tackles Historic Job in Hawaii

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McLaughlin vacuums were the first to eliminate the baghouse and use a three-stage filtration process that includes a cyclone separator and two-micron filter. But that was just the beginning of our innovations. Since then we’ve developed the first fully external hydraulic door with a mechanical cam-over locking system, eliminating the need for door latches. We’ve also made it possible to clean the tank without getting dirty, and installed vacuum blowers that operate at 1025 cfm, the industry’s highest air flow rate on a trailer-mounted unit. Many of our industry-leading innovations are still McLaughlin exclusives, so when you want to put our superior vacuum to work for you, remember to “Make it a Mac.” McLaughlin vacuums are available at your local Vermeer dealer. First we took a cyclone. Then we mounted it on a trailer. And the rest is history. U.S. General Services Administration Contract GS-07F-0166 MCLAUGHLIN and the MCLAUGHLIN LOGO are trademarks of McLaughlin Group, Inc. VERMEER and the VERMEER LOGO are trademarks of Vermeer Manufacturing Company. © 2009 McLaughlin Group, Inc. All rights reserved. s MIGHTYMOLE COM VACUUMS

3rd Quarter 2009 President Ron Tagliapietra Michels Corporation President-Elect Kevin Mason ElectriCom, Inc. 1st Vice President Larry Libla Libla Communications 2nd Vice President Tommy Muse Aubrey Silvey Enterprises, Inc. Treasurer Glen Amerine Amerine Utilities Construction, Inc. Secretary Steve Sellenriek Sellenriek Construction Officer Directors Official Publication of the Power & Communication Contractors Association Board of Directors David Aubrey Okay Construction Tony Briggs Vermeer Manufacturing James Dillahunty Henkels & McCoy, Inc. John Fluharty Mears Group, Inc. Herb Fluharty Mears Group, Inc. Timothy D. Killoren North States Utilities Dan Levac Preformed Line Products Todd Mix ElectriCom, Inc. Todd Myers Kenneth G. Myers Construction Robert Orr Sherman & Reilly, Inc. Larry Pribyl MP Nexlevel, LLC Brad Radichel Condux International Austin Shanfelter MasTec, Inc. Matt Trawick Trawick Construction Co., Inc. Bryan Westerman MasTec, Inc. Publication Staff Publisher Timothy Wagner twagner@pccaweb.org Associate Publisher Cheryl Stratos stratosc@pccaweb.org Editor Michael Ancell mancell@pccaweb.org Advertising Sales Manager Victoria Geis vgeis@pccaweb.org Henkels & McCoy Tackles Historic Job in Hawaii 19 PCCA members Henkels & McCoy and Environmental Crossings played major roles in an historic endeavor in Hawaii: the construction of an inter-island, undersea fiber optic network connecting the five islands of Kauai, Oahu, Molokai, Maui, and Hawai’i. Turn to page 19 to learn more. Is Power Construction the Silver Lining? 23 By Mark Bridgers, Dan Tracey, and Mike Chase In 2009-2010, the power generation, transmission, and distribution construction markets will face the challenges that may shake the confidence of some contractors. However, there are a number of proactive strategies that successful contractors can pursue. PCCA’s Rocky Mountain Mid-Year 35 The majestic mountain village of Vail, Colorado, rolled out the red carpet for PCCA in July, and 146 association members and family heeded the invitation and rolled into town for the 2009 PCCA Mid-Year Meeting—three days of learning, fellowship, and fun. News Briefs 7 Safety News 41 PCCA Member News 45 Industry Calendar 49 Advertiser Index 50

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PCCA Journal|3rd Quarter 2009 7 FCC Releases Report on Broadband Strategy for Rural America Concluding that all rural Americans must have the opportunity to reap the full benefits of broadband services, Acting Federal Communications Commission Chairman Michael J. Copps released a report this summer that provides a starting point for the development of policies to deliver broadband to rural areas and restore economic growth and opportunity for Americans residing and working in those areas. Recognizing that the need for broadband in rural America is becoming ever-more critical, Congress in the 2008 Farm Bill required the FCC chairman, in coordination with the Secretary of the Department of Agriculture, to submit a report to Congress describing a rural broadband strategy. Bringing Broadband to Rural America: Report on a Rural Broadband Strategy identifies common problems affecting rural broadband, including technological challenges, lack of data, and high network costs, and offers recommendations to address those problems. Broadband “is the interstate highway of the 21st century for small towns and rural communities, the vital connection to the broader nation and, increasingly, the global economy,” Copps said in the report. “Our nation as a whole will prosper and benefit from a concerted effort to bring broadband to rural America.” The report’s recommendations include enhancing coordination among and between federal, tribal, state, and community agencies, governments, and organizations; reviewing existing federal programs to identify barriers to rural broadband deployment; coordinating broadband program terminology consistent with current laws; coordinating data collection and mapping efforts; supporting consumer education and training initiatives to stimulate and sustain broadband demand; and identifying important policies and proceedings that support further broadband deployment such as universal service and network openness. The report can be found at www. wireless.fcc.gov/outreach/ruralbroadband. NTIA Unveils Program to Help States Map Internet Infrastructure The Department of Commerce’s National Telecommunications and Information Administration (NTIA) recently announced details of a grant program to fund collection of state-level broadband data as well as state-wide broadband mapping and planning that will help NTIA create a national broadband map. NTIA says that this initiative will provide consumNews Briefs News Briefs continued on page 8 On July 1, Vice President Joe Biden announced the availability of $4 billion in American Recovery and Reinvestment Act (stimulus bill) loans and grants to help bring broadband service to unserved and underserved communities across America. He said this is the first round of stimulus funding aimed at expanding broadband access to help bridge the technological divide and create jobs building out internet infrastructure. “Today’s announcement is a first step toward realizing President Obama’s vision of a nationwide 21st-century communications infrastructure—one that encourages economic growth, enhances America’s global competitiveness, and helps address many of America’s most pressing challenges,” Biden said. The so-called stimulus bill provided a total of $7.2 billion to the Commerce Department’s National Telecommunications and Information Administration (NTIA) and the U.S. Department of Agriculture’s Rural Utilities Service (RUS) to accelerate broadband deployment in areas of the country that have been without the high-speed infrastructure. Of that funding, NTIA will use $4.7 billion to deploy broadband infrastructure, expand public computer center capacity, and encourage sustainable adoption of broadband service. RUS will invest $2.5 billion to facilitate broadband deployment in rural communities. NTIA and RUS will be accepting applications for loans, grants, and loan/grant combinations to be awarded by each agency under a single application form. This collaborative approach will ensure that the agencies’ activities are complementary and integrated, make the best use of taxpayer funds, and make it easier for applicants to apply for funding. This is the first of three rounds of funding the Agriculture and Commerce departments will provide. Biden Announces Availability of $4 Billion in Stimulus Funds to Increase Broadband Access

PCCA Journal|3rd Quarter 2009 8 ers with better information on the broadband services available to them and inform efforts to increase broadband availability nationwide. “This program satisfies Congress’ mandate that we collect comprehensive information on broadband in America,” said NTIA Administrator Lawrence E. Strickling. “These data will be used to create the national broadband map, and in addition states will be able to create their own broadband maps tailored to their specific needs. These will be important tools for understanding and improving broadband access and adoption in the United States.” The State Broadband Data and Development Grant Program is a competitive, merit-based matching grant program that implements the joint purposes of the American Recovery and Reinvestment Act (recovery act) and the Broadband Data Improvement Act (BDIA). The program will provide approximately $240 million in grants to help states or their designees develop state-specific data on the deployment levels and adoption rates of broadband services. These data, including publicly available state-wide broadband maps, will also be used to develop the comprehensive, interactive national broadband map that NTIA is required by the recovery act to create and make publicly available by February 17, 2011. The national broadband map will publicly display the geographic areas where broadband service is available, the technology used to provide the service, the speeds of the service, and broadband service availability at public schools, libraries, hospitals, colleges, universities, and public buildings. The national map will also be searchable by address, and broadband service providers will have the option to make their identity available. NTIA’s grant awards can also include funding for state broadband planning. Planning projects may include, for example, efforts to identify barriers to broadband adoption in a state and creation of local technology planning teams. Awardees will be required to provide at least 20 percent non-federal matching funds toward project costs. FERC Adopts Policy to Accelerate Development of Smart Grid The Federal Energy Regulatory Commission (FERC) said it took a major step in July to accelerate the development of a smart electric transmission system that could provide long-term savings for consumers by improving the News Briefs Continued from page 7 News Briefs continued on page 10 2009 Electric Loan Borrowers State, Borrower, Loan Amount Ark., Farmers Electric Cooperative Corporation, $6.523 million Ark./La., Ashley-Chicot Electric Cooperative, Inc., $5.255 million Ariz./Calif./N.Mex., Arizona Electric Power Cooperative, Inc., $36.032 million Colo., San Miguel Power Association, Inc., $5.1 million Del., Delaware Electric Cooperative, Inc., $21 million Fla.,Withlacoochee River Electric Cooperative, Inc., $119.93 million Ga./Ala./Fla., Georgia Transmission Corporation, $171.629 million Iowa, East-Central Iowa Rural Electric Cooperative, $12 million Ill., Rural Electric Convenience Cooperative, Co., $7 million Ill., Menard Electric Cooperative, $8.5 million Kans.,The Ark Valley Electric Cooperative Association, Inc., $9.335 million Kans.,The Brown Atchison Electric Cooperative Association, $2.562 million Minn., Goodhue County Cooperative Electric Association, $6.447 million Minn.,Wild Rice Electric Cooperative, Inc., $10 million Mo.,West Central Electric Cooperative, Inc., $12.865 million Mo., Sac Osage Electric Cooperative, Inc., $5.5 million Mo./Iowa, United Electric Cooperatives, Inc., $18.951 million Mo./Iowa/Okla., Associated Electric Cooperative, Inc., $40 million Mo./Iowa/Okla., Associated Electric Cooperative, Inc., $160 million Miss., Southwest Mississippi Electric Power Association, $11.726 million Mont., Fergus Electric Cooperative, Inc., $14.991 million N.C., Albermarle Electric Membership Corporation, $11.5 million N.C./Va., Mecklenburg Electric Cooperative, $35 million N.Mex., Continental Divide Electric Cooperative, Inc., $19.862 million N.Mex./Tex., Lea County Electric Cooperative, Inc., $34.865 million Okla., Indian Electric Cooperative, Inc., $16.29 million Oreg.,Tillamook People’s Utility District, $14 million S.C.,York Electric Cooperative, Inc., $46.743 million S.C., Santee Electric Cooperative, Inc., $48.39 million S.C., Little River Electric Cooperative, Inc., $15.216 million S.Dak., Lacreek Electric Association, Inc., $5 million Tenn., Gibson Electric Membership Corporation, $7.6 million Tenn., Appalachian Electric Cooperative, $30 million Va., Rappahannock Electric Cooperative, $11.4 million Wash., Nespelem Valley Electric Cooperative, Inc., $2.253 million Wisc.,Vernon Electric Cooperative, $14.5 million Wyo./Colo./Nebr., High West Energy, Inc., $26.312 million USDA Awards More Than $1 Billion in Electric Loans Agriculture Secretary Tom Vilsack on June 4 announced that 37 rural utilities and cooperatives in 29 states have been selected to receive more than $1 billion in loans to build and repair more than 10,000 miles of distribution and transmission lines and make system improvements that will benefit 60,000 rural customers. Funding of each loan recipient is contingent upon the recipient meeting the conditions of the loan agreement. Below is a complete list of the selected borrowers.

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PCCA Journal|3rd Quarter 2009 10 efficiency and operation of the grid. The Smart Grid Policy Statement sets priorities for work on development of standards crucial to a reliable and smart grid. Smart grid advancements will apply digital technologies to the grid, enabling two-way communications and real-time coordination of information from both generating plants and demand-side resources. This will improve the efficiency of the bulk-power system with the goal of achieving long-term savings for consumers. And it will help promote wider use of demand response and other activities that give consumers the tools they need to control electricity costs. The final policy also sets out FERC policy for recovery of costs by utilities that act early to adopt smart grid technologies. More than 70 sets of comments from interested groups indicated broad support for the proposed policy. The new policy adopts as a FERC priority the early development by industry of smart grid standards to: • Ensure the cybersecurity of the grid; • Provide two-way communications among regional market operators, utilities, service providers, and consumers; • Ensure that power system operators have equipment that allows them to operate reliably by monitoring their own systems as well as neighboring systems that affect them; and • Coordinate the integration into the power system of emerging technologies such as renewable resources, demand response resources, electricity storage facilities, and electric transportation systems. The policy also provides for early adopters of smart grid technologies to recover smart grid costs if they demonstrate that those costs serve to protect cybersecurity and reliability of the electric system and have the ability to be upgraded among other requirements. Obama Announces FERC Nomination In June, President Barack Obama announced his intent to nominate John R. Norris as commissioner of the Federal Energy Regulatory Commission. Norris is currently serving as chief of staff for Agriculture Secretary Tom Vilsack. Before joining the USDA, he served as chairman of the Iowa Utilities Board (IUB) from 2005 to 2009. As a member of the National Association of Regulatory Utility Commissioners, he worked on the Electricity Committee and was co-chair of the 2009 National Electricity Delivery Forum. He served as a board member, secretary, and president of the Organization of Midwest Independent System Operator (MISO) States as well as chairman of the MISO Demand Response Working Group. He also was a member of the FERC/ NARUC Demand Response Collaborative. Vilsack Names Additional Staff at RUS On July 10, Agriculture Secretary Tom Vilsack announced the filling of several staff positions at the U.S. Department of Agriculture. Following are those working in Rural Development. Curt Wiley, chief of staff, Rural Business Service. Wiley, an Iowa native, has extensive experience in state government and publicprivate partnerships in the Midwest. He served then Indiana Governor Evan Bayh as executive assistant for commerce and agriculture. Wiley’s previous positions include deputy director of the Michigan Department of Transportation, executive director of the Indiana Department of Commerce, and commissioner of the Indiana Department of Transportation. Katie Yocum, confidential assistant, Rural Utility Service. Yocum most recently served as confidential assistant and director of outreach under FCC Commissioner Jonathan Adelstein. Before that, she worked as the campaign coordinator for the Media and Democracy Coalition, a national coalition of nonprofit organizations committed to amplifying the voices of the public in shaping media and telecommunications policy. Jessica Zufolo, deputy administrator, Rural Utility Service. Most recently Zufolo served as senior policy director for telecommunications, media, and technology research for Medley Global Advisors. She served as legislative director for the National Association of Regulatory Utility Commissioners, where she was responsible for developing and executing national legislative strategy and policy on Capitol Hill involving telecommunications, technology, consumer protection, and water. Forecast for U.S. Wind Industry: 2009 Downturn to Give Way to 2010 Surge Beyond near-term market uncertainty created by the financial crisis, the longer-term prospects for the U.S. wind industry remain strong, according to a new study from Emerging Energy Research, a Cambridge, Mass.,-based advisory firm. While a rapidly growing U.S. wind market (expanding at an average annual growth rate of 40 percent since 2005) has slowed down to pre-2008 levels, the market is expected to bounce back as soon as 2010, according to EER. In the near-term, EER forecasts that 2009 wind capacity additions may drop as low as 6.5 GW, 24 percent below 2008’s record levels. But with a return to liquidity in wind project debt and tax equity markets, EER anticipates a potential rebound of 9 GW of wind capacity additions in 2010 and 11 GW in 2011. “The U.S. wind industry may News Briefs Continued from page 8

PCCA Journal|3rd Quarter 2009 11 post its strongest year ever in 2010 when the incentive-laced economic stimulus begins to show returns and transmission build-out reaches market,” said EER Senior Analyst Matthew Kaplan. According to findings from the study, the following trends signal a positive outlook for U.S. wind markets: • U.S. wind gets short-term boost from new federal incentives. The Obama administration’s economic stimulus effort provides several new tax equity financing options for wind projects installed in 2009-2010. The provision of a 30 percent investment tax credit with Treasury grant options could help to considerably drive near-term growth. • State Renewable Portfolio Standards (RPS) drive U.S. wind growth with building momentum toward a national RPS. Momentum behind the establishment of a national RPS is growing and would help to build demand for renewables as part of the country’s energy future. “One RPS currently under consideration would require 20 percent of electricity from renewable by 2020,” Kaplan said. “With wind as the fastest growing renewable energy source, this could have a huge impact.” • Transmission build-out positions U.S. wind for long-term development. Build-out of major new inter-state transmission aiming to unlock high-wind resources in the Midwest and Southwest regions is of great importance in key wind states such as Texas, California, the Dakotas, and Wyoming. “The ability of U.S. transmission grid infrastructure to sustain new wind development will present the greatest long-term challenge to steady market growth,” Kaplan said. • Major investments in U.S. wind turbine manufacturing facilities remain on track. Confidence in the long-term stability of policy support has led to dozens of announcements of new U.S. manufacturing facilities for wind turbines and their components. “While the economic downturn has delayed some of these projects, recent investment commitments nearing $1 billion alone from leading European turbine OEMs Vestas, Siemens, and Nordex provide a strong indicator of the U.S. wind market’s long term prospects,” Kaplan said. • U.S. regulated utilities extend commitment to wind power ownership. In regions where regulated utilities are allowed to build and own new generation assets (primarily the Midwest, Southwest, News Briefs continued on page 12 ÃVœÌÌ«œÜiÀˆ˜i°Vœ“ÊUÊ œ˜Àœi]Ê ÊqÊnÇLJÎnn‡™ÓșÊUÊ V œ˜œÕ} ]Ê ÊqÊnÇLJΙȇ£xää ,i˜Ì>ÃÊUÊ i>Ș}ÊUÊ-iÀۈViÊUÊ->ià "˜i‡-̜«Ê-VœÌÌ /œÊŽii«Ê}Ài>ÌÊiµÕˆ«“i˜ÌʏˆŽiÊ >˜ÌˆÃÊܜÀŽˆ˜}Ê}Ài>Ì]Ê-VœÌÌÊ*œÜiÀˆ˜iÊ L>VŽÃÊiÛiÀÞÊ՘ˆÌÊÜiÊ«ÀœÛˆ`iÊÜˆÌ Ê՘«>À>ii`ÊÓ{ÉÇÊÌiV ˜ˆV>ÊÃiÀۈViÊ >˜`ÊÃÕ««œÀ̰Ê/ >Ìʈ˜VÕ`iÃÊi“iÀ}i˜VÞÊ}i̇ޜՇL>Vއի‡>˜`‡À՘˜ˆ˜}Ê ÃiÀۈVi°Ê7 iÀiÛiÀÊÌ iʍœL°Ê 7ˆÌ Ê-VœÌÌÊ*œÜiÀˆ˜i]ÊޜսÊ˜iÛiÀÊLiʜ˜ÊޜÕÀʜܘ°Ê-iiÊ>ÊœÕÀÊ«Àœ`ÕVÌÊ ˆ˜iÃÊ>˜`ÊÃiÀۈViÃ]ʈ˜VÕ`ˆ˜}ʜÕÀÊLiÃ̇ˆ˜‡ˆ˜`ÕÃÌÀÞÊ,*"Ê«Àœ}À>“]ʜ˜ˆ˜itÊ ÃœÊ>ÎÊ>LœÕÌʜÕÀÊVÕÃ̜“ˆâi`Ê>VViÃÜÀˆâˆ˜}Ê̜ÊvˆÊëiVˆvˆVʍœLʘii`Ã. All the top manufacturers plus 24/7 service. Anywhere.

PCCA Journal|3rd Quarter 2009 12 and Pacific Northwest) utility ratebased wind ownership activity has continued to proliferate and diversify. In many of these regions, utilities are undertaking long-term plans to build, own, and operate wind assets, often with project development partners. Under EER’s base-case forecast scenario, U.S. annual wind power growth will increase from 8.5 GW in 2008 to nearly 15.5 GW by 2020. “The U.S. wind market is facing serious challenges in the short-term in terms of liquidity and credit, but the market will recover and longerterm market fundamentals remain strong,” Kaplan said. FERC Approves Funding Plan for Major International Transmission Project In May, the FERC approved the funding arrangement for a major transmission project linking Hydro-Quebec with ISO New England that would deliver low-cost hydropower to consumers in the New England region. The project is expected to reduce greenhouse gas emissions by an estimated 4 to 6 million tons of carbon dioxide per year by displacing gas-fired generation in New England, according to a FERC press release. Northeast Utilities Service Company, NSTAR Electric Company, and Hydro-Quebec TransEnergie are currently negotiating a joint development agreement for the design, planning, and construction of a 1,200-megawatt high-voltage transmission line that will cross over the U.S.-Canadian border and connect to ISO-New England’s backbone 345 kV transmission system. This expansion will make significant amounts of surplus hydropower available for export to the United States, the FERC said. “This project provides the opportunity for consumers in a region of the country that has tight constraints on electricity supplies to get access to clean, low-cost energy,” FERC Chairman Jon Wellinghoff said. According to the press release, H.Q. Energy Services (U.S.) Inc. is taking responsibility for any of the project’s risks and agreed to participant funding for the project. Under a participant funding plan, the project costs will not be included in the rates for transmission service under ISO New England’s Open Access Transmission Tariff. Study Finds Sharp Increases in Home Broadband Adoption An April 2009 survey by the Pew Research Center’s Internet & American Life Project shows 63 percent of adult Americans now have broadband internet connections at home, a 15 percent increase from a year earlier. April’s level of high-speed adoption represents a significant jump (54 percent)from figures gathered by the project since the end of 2007. The growth in home broadband adoption occurred even though survey respondents reported paying more for broadband compared to May 2008. Last year, the average monthly bill for home broadband internet service was $34.50, a figure that stood at $39.00 in April 2009. The growth in broadband adoption indicates that the economic recession has had little effect on decisions about whether to buy or keep a home high-speed connection. The project’s April 2009 survey found that people are twice as likely to say they have cut back or cancelled a cell-phone plan or cable TV service than internet service. Broadband users were also asked how they view the importance of broadband to civic and community life. Some 55 percent of home broadband users said broadband was very important to at least one dimension of their lives and community, such as communicating with health care providers or government officials, sharing information about the community, or contributing to economic growth. “For many Americans, a home broadband connection is a conduit for connecting to community and economic opportunity,” said John B. Horrigan, associate director of the Pew Internet Project and principal author of the report. “That puts broadband in the ‘must keep’ category for most users, even when economic times are tough.” Senior citizens: Those who are age 65 or older had broadband adoption grow from 19 percent to 30 percent, or a 58 percent increase. Low-income Americans: Two groups of low-income Americans saw strong broadband growth from 2008 to 2009: • Respondents living in households whose annual household income is $20,000 or less, saw broadband adoption grow from 25 percent in 2008 to 35 percent in 2009. This is an increase of 40 percent. • Respondents living in households whose annual incomes are between $20,000 and $30,000 annually experienced a growth in broadband penetration from 42 percent to 53 percent, a growth of 26 percent. Rural Americans: Adults living in rural America, 17 percent of the sample, had home high-speed adoption grow from 38 percent in 2008 to 46 percent in 2009, a 22 percent increase. Pixius CEO: Broadband Vital for Rural Areas Home-based remote disease management technologies and telemedicine can improve the quality of life for rural patients while reducing the nation’s health care burden, a telecommuniNews Briefs Continued from page 11 News Briefs continued on page 14

PCCA Journal|3rd Quarter 2009 14 cations leader specializing in broadband communication in rural areas testified before a federal advisory committee on June 9. “However, none of this is possible without access to a quality highspeed broadband Internet connection,” said Jay Maxwell, CEO at Pixius Communications, Wichita, Kans. “While this access is common in urban and suburban areas, it is almost a luxury in rural America. Is it a coincidence that rural America is also an area that is unserved or underserved by medical facilities and practitioners? Rural America is an area with a population that is aging and placing increased demands on scarce healthcare resources.” Maxwell testified in Rapid City, S.D., at a public hearing of the National Advisory Committee on Rural Health and Human Services, established to advise the Department of Health and Human Services. In Kansas, he noted, 29 percent of the population is rural but only 4 percent of the doctors. “In South Dakota, the most remote areas of the state are the nine Sioux Indian reservations,” Maxwell said. “The health statistics on the reservations resemble those of a ThirdWorld country. The reservations must be a high priority for broadband.” The nation knows where the aging live and where health care resources exist, Maxwell said. But what isn’t accurately known is where quality high-speed broadband internet service is provided. “Before we can connect the country, we need to know with greater accuracy who currently has coverage,” he said. “I urge HHS and all federal departments to work together to determine in greater detail who has service and who needs service. By doing this, you will pave the way toward a more effective means of delivering health care to rural America.” Funds for the Department of Agriculture in the American Recovery and Reinvestment Act would significantly increase telemedicine and broadband programs in rural America, Maxwell said. Other ARRA funds administered by the National Telecommunications and Information Administration will target additional rural broadband programs. “We urge HHS to coordinate to the maximum extent possible with both USDA and NTIA to maximize the use of broadband funds with an eye to improving rural health care,” he said. FCC Releases Data on High-Speed Services The Federal Communications Commission (FCC) in July released the final High-Speed Services for Internet Access report to be based on the old Form 477 data collection requirements. The FCC has collected basic service information from broadband providers on a semi-annual basis since 2000. Statistics released in July reflect data as of June 30, 2008. Under the previous requirements, filers were required to identify the number of subscribers they had in each state, broken down by speed tier and technology. Filers were also required to identify all Zip Codes in which they had at least one high-speed connection (defined as any connection delivering service at speeds exceeding 200 kilobits per second in at least one direction) in service. According to the June 2008 data, there are no Zip Codes where there is not at least one such connection. The FCC and others have recognized these requirements as insufficiently granular or precise to inform necessary policymaking. In June 2008, the FCC implemented significant changes to the way it collects data on these services. As part of these changes, which were effective for the March 2009 collection of data as of year-end 2008, providers of wired broadband, fixed-wireless broadband, and satellite-based broadband connections report subscriber counts at the Census Tract level rather than the state level, and all filers report their connections in accordance with an increased number of upload and download transmission speed tiers. Following are summarized findings of the report. 1. High-Speed Lines • High-speed lines, defined as connections delivering services at speeds exceeding 200 kbps in at least one direction, increased by 10 percent during the first half of 2008, following a 20 percent increase during the second half of 2007. For the full twelve-month period ending June 30, 2008, high-speed lines increased by 32 percent (or 31.8 million lines) compared to a 55 percent increase (or 36.0 million lines), in the twelve-month period ending June 30, 2007. • Of the 132.8 million total highspeed lines reported as of June 30, 2008, 79.1 million served primarily residential end users. Cable modem service represented 46.7 percent of these lines while 34.1 percent were asymmetric DSL (ADSL) connections, 0.1 percent were symmetric DSL (SDSL) or traditional wireline connections, 2.7 percent were fiber connections to the end user premises, and 16.4 percent used other types of technology including satellite, terrestrial fixed or mobile wireless (on a licensed or unlicensed basis), and electric power line. • High-speed ADSL increased by 0.5 million lines during the first half of 2008, fiber connections increased by 0.5 million lines, and cable modem service increased by 1.7 million lines. For the full twelve-month period ending June 30, 2008, ADSL increased by 2.2 million lines, fiber connections increased by 1.1 million lines, and cable modem service increased by 3.8 million lines. News Briefs Continued from page 12

PCCA Journal|3rd Quarter 2009 15 2. Advanced Services Lines • Advanced services lines, defined as connections delivering services at speeds exceeding 200 kbps in both directions, increased by 10 percent during the first half of 2008, compared to a 15 percent increase during the second half of 2007. For the full twelve-month period ending June 30, 2008, advanced services lines increased 27 percent (or 18.8 million lines). • Of the 88.4 million advanced services lines reported as of June 30, 2008, 55.5 percent were at least 2.5 mbps in the faster direction and 44.5 percent were slower than 2.5 mbps in the faster direction. • Of the 88.4 million advanced services lines, 74.5 million served primarily residential end users. Cable modem service represented 49.2 percent of these lines, while 31.3 percent were ADSL connections, 0.2 percent were SDSL or traditional wireline connections, 2.9 percent were fiber connections to the end user premises, and 16.5 percent used other types of technology. 3. Geographic Coverage • As a nationwide average, the FCC estimates that high-speed DSL connections were available to 83 percent of the households to whom incumbent LECs could provide local telephone service as of June 30, 2008, and that high-speed cable modem service was available to 96 percent of the households to whom cable system operators could provide cable TV service. • Providers other than providers of terrestrial mobile wireless services listed the Zip Codes in which they had at least one high-speed connection in service to an end user, while terrestrial mobile wireless service providers listed the Zip Codes that best represented their service territories. Combining these data, 100 percent of 5-digit Zip Codes were represented in the lists filed for June 2008. FCC Releases Data on Local Telephone Competition The FCC in July released new data on local telephone service competition in the United States. Twice a year, all incumbent local exchange carriers (incumbent LECs) and competitive local exchange carriers (CLECs) are required to report basic information about their local telephone service, and all facilities-based mobile telephony providers are required to provide information about their subNews Briefs continued on page 16

PCCA Journal|3rd Quarter 2009 16 scribers, pursuant to the FCC’s local telephone competition and broadband data gathering program (FCC Form 477). The following statistics reflect data as of June 30, 2008. • End-user customers obtained local telephone service by utilizing approximately 124.6 million incumbent LEC switched access lines, 30 million CLEC switched access lines, and 255.3 million mobile telephony service subscriptions at the end of June 2008. • Of the 30 million CLEC end-user switched access lines, 9.4 million lines were provided over coaxial cable connections. The 9.4 million lines represent about 71 percent of the 13.1 million end-user switched access lines that CLECs reported providing over their own local loop facilities. • Mobile telephony service providers reported 255.3 million subscribers at the end of June 2008, which is 17 million (or 7 percent) more than a year earlier. About 8 percent of these subscribers were billed by mobile telephony service resellers. • There was at least one CLEC serving customers in 82 percent of the nation’s Zip Codes at the end of June 2008. About 97 percent of households resided in those Zip Codes. • The 30 million lines reported by CLECs is about 19 percent of the 154.7 million total end-user switched access lines reported for the end of June 2008. • CLECs reported 12.4 million (or 14 percent) of the 89.6 million lines that served residential end users and 17.7 million (or 27 percent) of the 64.7 million lines that served business, institutional, and government customers. • CLECs reported providing 44 percent of their end-user switched access lines over their own local loop facilities, 36 percent by using unbundled network elements (UNEs) that they leased from other carriers, and 20 percent through resale arrangements with unaffiliated carriers. • Incumbent LECs reported providing about 11 percent fewer UNE loops with switching (referred to as the UNE-Platform) to unaffiliated carriers at the end of June 2008 than they reported six months earlier (4.9 million compared to 5.5 million) and about 7 percent fewer UNE loops without switching (3.8 million compared to 4.1 million). • Incumbent LECs were the presubscribed interstate long distance carrier for 59 percent of the switched access lines they provided to end users, while CLECs were the interstate long distance carrier for 79 percent of their switched access lines. p 920-459-2600 f 920-459-2608 www.gabes.com D.A.S. Networks Fiber Optic Networks Maintenance & Locating Services Underground Conduit & Manhole Systems News Briefs Continued from page 15

FMI Corporation is the premier investment banking and management consulting firm serving the worldwide engineering and construction industry. For more than 55 years, FMI has built a reputation for assisting our clients in the creation and realization of value in their firms. MERGERS & ACQUISITIONS | FINANCIAL ADVISORY SERVICES FMI is pleased to have served as an exclusive financial advisor in the following transactions: For more information, visit our website at www.fminet.com, or contact: W. Christopher Daum at 919.785.9264 / cdaum@fminet.com *Represented by FMI Riggs Distler & Company, Inc.* Cherry Hill, NJ has been acquired by Thirau, LLC a subsidiary of CVTech Group, Inc. Drummondville, Québec Engineering Associates, Inc.* and its affiliate EA Technical Services, Inc.* Alpharetta, GA were acquired by Quanta Services, Inc. Houston, Texas

“Case loader/backhoes are the backbone of my business. They are very stable when digging on steep terrain and roading is easy. Plus they’re incredibly dependable. We run them 2,500 hours a year, no problem.” Alex Herrera, H. Excavation Inc. THE LEGEND CONTINUES. Reliability. Case has been setting the standard for 50 years … and we’re raising the bar again. Our new M Series 3 loader/backhoes have been updated with turbocharged Case Family IV engines to deliver more muscle, boost fuel efficiency and meet Tier III emission requirements. Combine that with features like Pro Control™ and a new electronic fuel injection system and you've got improved cycle times and productivity. Rely on the company that’s sold more than 500,000 backhoes world-wide and get in the seat of a Case loader/backhoe. SUPERIOR RELIABILITY FUEL EFFICIENCY OPERATOR ENVIRONMENT SERVICEABILITY Get the full story on the new Case loader/backhoe and the best warranty in the business. Contact your Case dealer for a demo today. www.casece.com / 866-54CASE6 Payment based on a 36-month lease of a 580SM Loader/Backhoe, 1,200 hours/year, year-round. $3,565 due at closing ($1,000 security deposit included). This offer does not reflect actual sales price. See your Case Construction Equipment Dealer for details and eligibility requirements. For commercial use only. Customer participation subject to credit qualification and approval by CNH Capital America LLC. Offer good through June 30, 2009. Not all customers or applicants may qualify for this rate or term. CNH Capital America LLC standard terms and conditions will apply. Taxes, freight, set-up, delivery, additional options or attachments not included in payment example above. Offer subject to change or cancellation. ©2009 CNH America LLC. All rights reserved. Case is a registered trademark of CNH America LLC.

PCCA Journal|3rd Quarter 2009 19 ClearCom, Inc. oversees what is a historymaking endeavor in Hawaii: the construction of an inter-island, undersea fiber optic network connecting the five islands of Kauai, Oahu, Molokai, Maui, and Hawai’i. The remaining island, Lanai, is to be connected via microwave. This network, known as the Paniolo Cable Network System, will be independent of any existing networks, enabling it to function as an alternative emergency communications system. Designed to minimize environmental, cultural, and visual impacts, the network’s terrestrial portion was installed underground while the undersea portion was landed on each island by boring rather than trenching. In support of this job, PCCA member Henkels & McCoy (H&M) was contracted to install 57 terrestrial miles of conduit and fiber optic cable and oversee the operations of seven horizontal directional ocean drills on the islands. H&M project-managed and oversaw another PCCA member, Environmental Crossings, Inc. (ECI), on the ocean HDD landings at seven separate locations: one drill location each on Kauai, Molokai, and Hawai’i (Big Island) and two drill locations each on Oahu and Maui. Once the substructure was in place, a 48-strand single mode fiber was installed throughout the duct system. IT International Telecom Marine SRL installed the submarine fiber optic cable from island to island. Terrestrial work on Oahu consisted of one sevenmile segment on the west side of the island and a five-mile section on the east side. H&M installed 20 3- by 5-foot precast manholes and four 1.5-inch inner ducts via trenching and horizontal directional drilling in an abandoned waterline. Upon completion of the substructure, H&M crews installed, spliced, and tested the 48 SM fiber cable. The island of Maui had two fiber optic duct line segments, all 33.25 miles of which were installed via open trenching, directional drilling, plowing, and rock sawing. Challenges of particular note on these segments included the likelihood of archaeoHenkels & McCoy Tackles Historic Job in Hawaii Continued on page 20

PCCA Journal|3rd Quarter 2009 20 logical burials in the Olowalu area, the expectation of hard rock formations in the Makena area, night work and the resulting post-luau traffic rush in Ma’alaea, directional drilling through the winding Pali area, and construction noise sensitivity in the high-rent Wailea area. The undersea work associated with this job involved horizontal drilling a 6 5/8-inch steel pipe from the beach landing area out into the Pacific and exiting the ocean floor at a distance from 2,000 to 4,600 feet. When each bore was complete, the ECI crew had divers secure the end of the pipe in wait for the interisland sea cable to be installed inside of it. ECI spent seven months completing the seven HDD bores through basalt and fractured volcanic rock. Some of the bores were challenging, while others were moderate in difficulty. The Makena bore on Maui was particularly difficult due to extremely hard rock. While the bore length was only 2,260 feet, ECI spent 56 days on this bore alone. ECI used a 500,000-pound drilling rig on all seven drills and a 6 5/8-inch drill pipe as the pilot string on this “drill-and-leave” scenario, allowing space in the pipe for future inner ducts. Due to the isolated locations of many of the drills, logistics became paramount to complete these bores on schedule. ECI completed all bores on time and on budget with a professional team effort by all parties involved. H&M’s commitment to project management played an important role in approaching work on the Paniolo Cable Network System from the very beginning. Thorough project planning in the form of a sound project plan, quality control plan, and safety plan ensured that the H&M project management team and field personnel were equipped to handle the magnitude and complexities of this job. Once work was underway, the H&M team utilized processes that helped them adhere to and modify their project plan in accordance with any field changes that surfaced. The underground boring presented considerable challenges on this project, given the number of ocean bores and the uncertainty surrounding the actual conditions underground. The high-risk nature of this portion of the job led H&M to increase its review of all work from monthly reporting to semimonthly reporting. Tracking project cost from start to finish also proved beneficial in allowing the team to stay on schedule, monitoring units and identifying potential areas for improvement on a regular basis. Following a set plan while maintaining flexibility in anticipation of any issues that might arise along the way ensured that H&M maximized production of the crews without jeopardizing or compromising their safety, the safety of the public, or the satisfaction of the customer. H&M Area Manager Mike Alvarez offered his own reflection on the Paniolo Cable Network System: “Realize that the privilege to work on this challenging project was a gift, that the power to work on this job was a blessing, and that our love of our work made it a success. Congratulations to all the companies and their employees who were involved.” Historic Job in Hawaii Continued from page 19 A typical drill site location with drilling rig (on left) and support equipment. Photo from Environmental Crossings, Inc. Drilling rig with mud motor and drill bit ready to enter the ground at a site in Makena, Maui. Photo from Environmental Crossings, Inc.

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PCCA Journal|3rd Quarter 2009 23 Credit crisis. Economic stimulus package. Housing slump. Infrastructure spending. Recession. There is both good and bad news on the horizon, and unfortunately 2009 will likely hold more bad than good for power utility-related construction. What is not in doubt is that 2009 will be a year of change. Contractors are optimistic and confident by nature, and because they are, they can continue to operate in a volatile market. In 2009-2010, the power generation, transmission, and distribution construction markets will face challenges that may shake the confidence of some contractors. These challenges include financing availability, changing regulatory stance, very low new housing growth, distribution pipeline integrity emphasis, transmission grid upgrade, and infrastructure or stimulus package rollout. (See sidebar on page 24.) Perhaps the biggest short-term constraint is credit. While there is not yet hard evidence, many owners are slowing both the release of construction and design activities, according to FMI’s observations and discussions with utility, engineer, and contractor professionals. We anticipate the 2009 spring bidding season, typically when large volumes of work are released for construction, to be reduced in both size and number of available projects. Currently, we expect the release of work to improve in the back half of 2009, but this will still result in reduced volumes of work for many contractors from their record years in 2007 and 2008. While the credit crisis and economic recession weigh heavily on many utilities as they consider how to expend their precious capital, there remains a silver lining. All of the change and constraints placed on the utility owners or buyers of In 2009-2010, the power generation, transmission, and distribution construction markets will face the challenges that may shake the confidence of some contractors. However, there are a number of proactive strategies that successful contractors can pursue. By Mark Bridgers, Dan Tracey, and Mike Chase Is Power Construction Continued on page 24

PCCA Journal|3rd Quarter 2009 24 construction services will result in softening growth that is a modest retraction from the blistering growth seen in the past five years, but not wholesale collapse. In addition, 2009 will exhibit a congressional shift toward economic investment to spur growth, as opposed to encouraging consumption. This equates to greater funding of infrastructure construction, which will buoy many of the utility markets. The uncertain but optimistic legislative outlook supports FMI’s forecast of slow growth in the power generation, transmission, and distribution segments for 2009. This growth is in part due to large, multi-year projects where financing has been secured, there is steadfast demand for service installations, or aging infrastructure replacement and system enhancement are critical. All in all, regardless of which utility segment a contractor operates within, change is the order of the day. Power Construction Continued from page 23 American Recovery and Reinvestment Act: The Stimulus Contractors Need? On February 13, the United States Congress made history when it passed the $787 billion American Recovery and Reinvestment Act. Political pundits predicted the massive bill would create as many as 300,000 construction jobs. While the total bill value is unprecedented, FMI predicts that only $94 billion is for new capital construction, with an additional $99 billion indirectly related to construction. So what does the stimulus bill mean to the utility construction market? The cash injection should temper an overall decline in construction by a couple percentage points, but FMI has concluded that a large percentage of the cash will be directed to accounts that are already depleted due to decreased tax revenue and difficult municipal bond markets. In the power generation and transmission and distribution market, the bulk of funding will be focused on tech-heavy initiatives like the smart grid and electric transmission efficiency/conservation or alternatively distributed projects like home weatherization assistance. Distribution construction for telecommunications, gas, and electric will see some spill-over work due to the need to move facilities for the planned highway and transportation spending. Of real substance for power generation and electric transmission-related construction is the extension through 2012 of the production tax credit for renewable energy generation. Market 1st Quarter 2009 2010 2011 2012 2013 Buildings 3,787 6,077 4,450 1,750 1,000 Residential 985 2,341 1,500 Water and Environmental 2,690 5,861 4,693 3,445 2,715 Highway and Transportation 16,192 26,550 4,950 100 Power 620 1,110 1,000 1,000 1,000 Total 24,274 41,939 16,593 6,295 4,715 “Change has considerable psychological impact on the human mind.To the fearful it is threatening because it means that things may get worse.To the hopeful it is encouraging because things may get better.To the confident it is inspiring because the challenge exists to make things better. Obviously, then, one’s character and frame of mind determine how readily he brings about change and how he reacts to change that is imposed on him.” — King Whitney Jr., President, Personnel Laboratory Inc.

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