U.S. agencies face broadband stimulus challenges

U.S. government agencies may have a difficult time promptly allocating the $7.2 billion for broadband deployment in an economic stimulus package recently passed by Congress, two broadband experts said.

A large percentage of the money for broadband in the stimulus package, passed in mid-February, won't be spent until 2011 or later, said Jeffrey Eisenach, chairman and managing partner of Empiris LLC, an economic consulting firm. The money, split between the U.S. National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) of the U.S. Department of Agriculture, will go out in the form of grants, and neither agency is set up to allocate billions of dollars, he said.

"In 2014, you're not going to need stimulus in this economy," added Robert Atkinson, president of the Information Technology and Innovation Foundation, a tech-focused think tank. "There's a sort of half-life for stimulus spending."

RUS has a small broadband loan program, but because to its rules in place, in some cases, the agency has given money to broadband providers wiring multimillion-dollar suburban homes or areas that already have broadband providers, Eisenach said. The NTIA has only a handful of grant officers on staff, he added.

Atkinson and Eisenach, speaking at a U.S. Chamber of Commerce forum on tech spending in the $787 billion stimulus package, both suggested that tax credits for broadband providers, instead of grant programs, would have been a better way to roll out broadband to rural and other unserved areas while creating immediate jobs.

Congress rejected tax credits, but tax breaks would have encouraged broadband providers to immediately reorder their broadband deployment projects to focus on unserved areas, Eisenach said.

"Those are projects where there are shovels in the ground today," he said.

Eisenach also questioned congressional rules for the $4.7 billion in NTIA grants that require Net neutrality. The stimulus package requires recipients of the grants to follow the Net neutrality rules established by the U.S. Federal Communications Commission, but it also authorizes the FCC and NTIA to create additional Net neutrality rules.

If the FCC starts a rule-making proceeding on Net neutrality, the grants won't "get done any time in this recession," he said.

Net neutrality advocates such as Free Press have pushed for the rules, saying that if broadband providers receive government money, they should commit to actions in the public good, such as refraining from blocking or slowing competing Web content.

Some groups have pushed for Congress to require that states or other groups complete maps of areas where broadband isn't available before NTIA or RUS can award grants. The stimulus package includes $350 million for mapping and related activities, but that requirement would slow down the grants further when the U.S. government money should be stimulating immediate job growth, Atkinson said.

The stimulus package "starts to blur the lines between stimulus and good government policy," he said. "We should just really focus on getting as much of this money out the door as quickly as possible, because, at the end of the day, it was sold to the American public as stimulus."

But Raquel Noriega, director of strategic partnerships at nonprofit broadband deployment organization Connected Nation, said the broadband maps are needed "in order to avoid chaos." The NTIA and RUS can give out some money for long-haul broadband networks and for wiring public buildings such as schools without detailed maps, but the agencies need to know what parts of the country lack broadband access in order to use the stimulus money efficiently, she said.

Only about 10 states now have broadband maps, she noted. The maps provide "critical information for public policy," Noriega said. "We do believe that maps will be critically important to ensure that our precious tax dollars are going to where we want them to go."

Copyright © 2009 IDG Communications, Inc.

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