Will the Stimulus Cash Flow to ISPs? - Page 2

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However, Dave Burstein, editor of Fast Net News said in an e-mail to InternetNews.com that these companies have deployed advanced technologies within their networks.

"Inside the companies, VoIP is a standard technique," he wrote. "Every phone company in the world does VoIP, internally in their network and invisible to the user. Most international destinations (by number, possibly by volume) go through VoIP providers."

If the goal of the stimulus is job creation, the money should go to small companies, argued Isenberg. "I was just watching President Obama on TV. He was talking about how small businesses create most of the new jobs and do more innovation. I'm not sure why it would be different for ISPs," he said.

But Burstein argued that the cable providers will soon have much larger coverage areas, thanks to wireless, and may therefore reach more remote areas. "Cox has a huge (unpublicized) build underway, while the other cable companies are waiting for the Sprint Clearwire networks to be ready."

Last month, the competitors pitched their proposal. Rick Harnish, president of the Wireless Internet Service Providers Association, said in a statement that only the competitors truly serve small rural communities and urged that they get the money.

"Small, local wireless broadband providers already have the expertise and the experience to provide broadband Internet access to rural and hard-to-reach areas," he wrote. "The American Recovery and Reinvestment Act must dedicate a meaningful portion of these new funds to better meeting the needs of consumers in rural, unserved and underserved areas."

The incumbents replied on Tuesday. "Value-producing projects that can be implemented quickly should receive the highest priority," the National Cable and Telecommunications Association (NCTA) wrote in a report entitled Moving the Needle on Broadband: Stimulus Strategies to Spur the Adoption of Broadband in America.

The report noted three categories of broadband need: unserved populations of nine million to 10 million people; an additional 35 million households, many of which are low income and have less than a high school education, which have access to broadband but have not adopted it; and underserved areas that have low population density and poor access to broadband.

Thus, the incumbents and the competitors disagree on where the money should go. The competitors propose that money be spent only on new networks in the most remote areas, and the incumbents want some of the money to be spent to pay for broadband for the poor in areas that they already serve.