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Broadband Stimulus Grants Taking Shape

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WASHINGTON -- Federal agencies overseeing $7.2 billion for broadband deployment through President Obama's massive economic stimulus bill today unveiled an aggressive plan for allocating the funding -- laying out a rough timetable for when the first dollars might begin filtering into the economy.

Here at the Department of Commerce, the heads of the three agencies and several senior-level staffers involved in the broadband stimulus funds pledged to move swiftly to allocate the money, which is intended both to create jobs in the short-term through the network expansion projects, and to shore up the nation's digital infrastructure.

"Broadband is the central infrastructure challenge of our time," said Michael Copps, acting chairman of the Federal Communications Commission. "Together we have been asking for years, 'Where is the policy for broadband? Where is the action? Where is the national commitment?'"

He added, "The years of broadband drift and growing digital divide are coming to an end."

Broadband advocacy groups have praised Congress and the Obama administration for elevating digital infrastructure to a national priority, noting with growing alarm numerous studies that rank the United States behind more than a dozen foreign competitors in high-speed Internet deployment.

Of the $7.2 billion allocated for broadband in the stimulus package, $4.7 billion is to be administered by the National Telecommunications Information Administration (NTIA), a division of the Commerce Department, with the Department of Agriculture's Rural Utilities Service (RUS) overseeing the remaining $2.5 billion. The bill directs the FCC to develop and report to Congress a national broadband strategy, and advise the other agencies as they begin to award grants and loans for broadband projects.

The NTIA and RUS opened a period of public comment today, seeking input from concerned parties about a wide range of issues affecting the dispersal of the funds. They also set dates for six additional public meetings to be held on a compressed schedule between March 16 and March 24. Four of the meetings will be held in Washington. One will be held in Las Vegas, the other in Flagstaff, Ariz. In keeping with the spirit of the initiative, each will be Webcast.

Through the meetings and the comment period, the agencies plan to refine the conditions that will be attached to stimulus funding, and then hold three application periods. Bernadette McGuirre-Rivera, associate administrator of the NTIA, said the agency is planning the first grant-review period roughly from April to June, the second between October and December, with the final review coming between April and June of next year. A representative from RUS said his agency is planning a similar timetable, though both emphasized that the schedule remains fluid at this point.

The agencies are directed to commit all the funding by Sept. 2010, and to ensure that the projects are substantively completed within two years of issuing the grants.

Rick Wade, acting chief of staff at the Commerce Department, heralded today's announcements as a "step forward toward realizing President Obama's vision of a 21st century communications infrastructure for everyone in America."

[cob:Special_Report]He added, "This stimulus funding makes a down payment toward that goal. We won't be able to get broadband access to everyone with this money, but we will begin moving in the right direction."

As the officials took questions from audience members in the packed auditorium, it became clear how much of a fact-finding mission lies ahead. Through the public comment and the meetings, they hope to determine key definitions that will shape the way grant recipients can put the money to use. Recipients of NTIA funding must adhere to "nondiscrimination" requirements, though that term, which gets at the heart of the Net neutrality debate, is to be defined by the agency.

Some of the funding is also contingent on definitions of the terms "unserved" and "underserved," referring to the level of broadband service currently available in the region. The FCC is directed to help define those terms and aid in the classification process, though many have noted that "underserved" is a slippery designation.

When reviewing the grants, the agencies will have to weigh several factors. Among others, they will evaluate the connection speed the applicant promises, how much funding the applicant pledges to contribute to the project, and the assurance that the network build-out would not have happened without federal funding.

In addition to network expansion, the NTIA's portion of the stimulus money also sets aside funding for collecting data about current levels of broadband penetration, computer centers at libraries and other public facilities, and programs to encourage consumers to adopt high-speed Internet service.

"We want to improve demand for broadband," Wade said. "We think when more people understand how broadband access can help them find new ways of making a living that they'll want to have it for themselves."

The NTIA plans to allocate each area of funding through a separate application process.

Representatives of NTIA and RUS said the two agencies would work closely together as they consider the applications for loans and grants. States, nonprofits, businesses and other eligible entities can apply to both agencies, provided they demonstrate that the funding would go to distinct parts of the project to guard against double dipping.

In assessing grant applications, the agencies will be looking for other efficiencies, and casting a wide net in the process. An applicant might team with another firm or agency receiving money from the Department of Transportation, proposing to lay fiber alongside a road-construction project "so you don't dig the same trench twice," said Mark Seifert, the senior adviser at the NTIA who will be spearheading the grant process.

"We're looking for the best you have to offer," Seifert said "The cream will rise, I believe."