All Eyes on D.C. as Broadband Stimulus Funds Near

Government broadband stimulus

With the government set to begin doling out billions of dollars for new broadband projects, the groups that have long been calling for a ubiquitous, open Internet are watching eagerly to make sure the money goes where it is needed most.

President Obama’s economic stimulus package, enacted Feb. 17, allocated $7.2 billion in grants for broadband network expansion and related education and training programs.

Tomorrow, the three agencies involved in the grant programs will hold what is expected to be the first of several public meetings to discuss how to disperse the money.

“We’re going into an extraordinary period where the government is directly investing in broadband infrastructure,” Ben Scott, policy director of the media-reform group Free Press, told reporters during a press conference call today. “We’re facing a situation where it all hinges on getting the policy right.”

For groups like Free Press, which have been warning that the United States is falling behind in broadband deployment, the move to funnel billions of dollars to new high-speed networks was a welcome stroke of enlightened policy. The broadband portion of the stimulus bill figures to create jobs in the near term through the physical expansion of ISPs’ data networks.

Farther down the road, greater Internet connectivity is expected to drive economic growth through the so-called network effect, where small businesses can get off the ground through e-commerce, people in remote areas can benefit from distance-learning initiatives, and so on.

But many uncertainties remain as to how the funding will be dispersed. In tomorrow’s meeting, agencies within the Departments of Commerce and Agriculture, as well as the Federal Communications Commission, will discuss the parameters for the process of reviewing and awarding grants.

The National Telecommunications Information Administration (NTIA), which will be responsible for $4.7 billion of the grant money, and the Rural Utilities Service (RUS), the recipient of $2.5 billion, are required by law to commit all of the funding by the end of next year.

“The question of how fast we should move has largely been taken out of our hands by Congress,” said Markham Erickson, director of the Open Internet Coalition, an advocacy group representing tech firms like Google, Amazon and eBay. “NTIA has to move by Washington standards in lighting-fast time.”

The FCC will largely be acting in an advisory role in the grant process. The stimulus bill charges the agency with developing a national broadband plan and taking a more vigorous approach to collecting data to determine which areas of the country are the least connected.

[cob:Special_Report]The FCC, which has long been hindered by vague data about broadband deployment provided by ISPs, will soon begin to receive more specific information from the U.S. Census Bureau about who has what type of service.

To Scott, who said the grant dispersal “must fundamentally be data-driven,” more detailed information from the FCC is a hopeful sign.

“We need to make sure the money is spent wisely on projects that will have the biggest bang for the buck for the American taxpayer,” he said.

Page 2: Who gets what?

Government broadband stimulus

Page 2 of 2

As the NTIA and RUS begin reviewing competing applications from ISPs across the country, they will have several factors to weigh.

For Chip Pickering, a former Republican representative from Mississippi who remains an active voice in telecom policy, the most worthy applicants will be established companies that can live up to their build-out commitments.

“It’s very important that they go to economically viable commercial entities that are sustainable over the long term,” Pickering said.

Then there is also the matter of determining which parts of the country are in the greatest need. One region may not technically count as “unserved” if there are low-level broadband services available, but if those networks offer connection speeds of only a few hundred kilobits per second, the area might still deserve of a grant. Likewise, if robust broadband is widely available, but only a small portion of residents say they can afford it, that area might be worthy of federal assistance as well.

“We need to make sure that we put broadband where it isn’t as a first order of business,” Scott said, though he is adamant that the NTIA should consider minimum connection speeds as it evaluates the grant applications.

“We’re concerned that stimulus dollars not be use to promote obsolete networks,” he said.

The stimulus bill directs the NTIA to set nondiscrimination rules for grant recipients, which will attach some form of Net neutrality provisions to the money.

Erickson, whose group gives voice to Web firms in the Net neutrality debate, remains hopeful that the nondiscriminatory requirements won’t drive away potential bidders. He recalled last year’s 700MHz spectrum auction, where an open-access condition was attached to the most valuable portion of the spectrum.

The company that protested most loudly against the requirement, Verizon Wireless, ended up the auction’s largest bidder, spending nearly $10 billion and acquiescing to the open-access provision.

“Some of the rhetoric tends to get blown out of proportion,” he said. “The notion that openness conditions and having an open Internet is some how in tension with being able to have investments with open infrastructure has largely been repudiated.”

News Around the Web