Broadband Stimulus Cash: Who Makes the Cut?

Government broadband stimulus

The bread line is getting long as the government moves closer to handing out billions of dollars in economic stimulus money for new broadband projects.

After a morning session on oversight and accountability for the forthcoming broadband stimulus grants, the Commerce Department turned its attention this afternoon to the selection criteria for grant recipients, hearing from a gaggle of stakeholders on how it should evaluate as many as 10,000 expected applications.

As each member of the unwieldy 10-person panel stepped to the podium, the first part of the meeting quickly became a forum for representatives of the various organizations to air their wish lists.

A representative of the National Science Foundation urged that the agencies dispensing the stimulus grants give priority to universities and laboratories.

Jacqueline Johnson-Pata, executive director of the National Congress of American Indians, made the case for linking up disadvantaged tribal communities. The president and CEO of the National Council on Aging put in a plug for computing facilities and training in senior centers, and a representative of the satellite industry talked up the unique benefits of satellite broadband in providing affordable nationwide coverage with “no unsightly towers or trenches.”

But that parade of special interests could very well be a precursor of what is in store for the agencies as they commence the grant process, possibly as soon as next month.

The stimulus bill signed into law last month allocates $7.2 billion to the National Telecommunications Information Administration, a division of Commerce, and the Department of Agriculture’s Rural Utilities Service to promote broadband deployment and adoption. Today’s meeting was the final of six sessions the agencies held to discuss various aspects of the grant-making process before they begin to finalize rules.

Then, the agencies will have what Free Press Research Director Derek Turner described as “the unenviable task of picking winners and losers out of what promises to be a very large pool of applicants.”

Turner’s group, a media-reform organization that is typically a vocal participant in broadband policy debates, has proposed a 100-point scorecard, where applications would be evaluated on criteria such as the connection speed they promise, whether the resulting network would be affordable and open, and the potential for creating jobs.

Steve Morris, the associate general council for the National Cable and Telecommunications Association, also offered a systematic method of ranking grant applications.

Speaking on behalf of his organization as well as several other telecom industry associations, Morris outlined a scorecard that would award points for job creation, the timeliness of construction, construction cost and affordability for consumers and several other factors.

In a broad sense, NTIA and RUS will have to balance the applications submitted by established providers with those pitching projects could serve the public interest or benefit small businesses, which the stimulus bill identified as priorities for the broadband grants.

“It will be incumbent on all of us to try to balance those two, to do what the act requires to in terms of small and disadvantaged business and to have merit-based criteria that would allow NTIA to process applications quickly and get grants out so that we can get construction going,” said Morris.

John Muleta, founder and CEO of M2Z Networks, spoke as a representative of the Minority Media and Telecommunications Council. Muleta appealed for the agencies to take a cue from venture capital firms and support small ventures with novel business models.

“The idea here is to experiment,” he said. “I think this is a little like venture capital to get 10 ideas and then one breaks out.”

Speaking on behalf of the satellite industry, WildBlue Vice President Lisa Scalpone shot back that the intent of the stimulus bill “is not to fund experimental projects.”

Muleta countered that small businesses are by definition experimental, but emphasized that they still must be held accountable. Projects without a marketing plan to help sustain them would be a nonstarter, he said.

It is worth noting that Muleta has been trying to get his own venture, M2Z, off the ground, promoting a quirky business model and an ambitious build-out schedule that many skeptics have criticized as unrealistic.

To help moderate the disputes between objective and subjective criteria, the panelists found a rare point of agreement over the idea of enlisting third-party experts to help advise the agencies in the grant-review process. To avoid obvious conflicts of interest, any business or professional association would have to recuse itself from applying for grant money, but the panelists generally agreed that tapping outside expertise from people in the field could make for a more informed process.

News Around the Web