House panel recommends $6B in broadband grants

It's part of the economic stimulus package

A U.S. House committee has recommended that the federal government give out $6 billion in grants for wireless and broadband rollout in a $825 billion economic stimulus package to be considered in Congress.

The House Appropriations Committee's recommendations, released today, also include $20 billion for health IT programs and $650 million to buy more coupons for digital television converter boxes, as U.S. television stations are scheduled to switch to all-digital broadcasts on Feb. 17. A $1.3 billion fund for the coupons at the U.S. National Telecommunications and Information Administration (NTIA) ran out of money earlier this month.

U.S. residents receiving over-the-air broadcasts on older television sets will need to buy a converter to continue to receive TV signals after Feb. 17. The NTIA program provided $40 coupons for converter boxes, which can cost $40 to $80.

The broadband money is less than several groups had called for. A year ago, Educause, a higher education tech advocacy group, called for $100 billion in new broadband spending, with $32 billion coming from the U.S. government, spread out over four years. The money is needed to bring 100Mbit/sec. broadband service to every U.S. home and business, Educause said.

In recent weeks, Free Press, a media reform group, has called for $44 billion in new government programs for broadband, and the Information Technology & Innovation Foundation (ITIF) suggested a $30 billion broadband program would create about 950,000 new jobs in the U.S.

Still, Free Press applauded the Appropriations Committee recommendation. "While $6 billion is not as much as we had hoped for, it is a substantial investment that represents an important public commitment to broadband," Ben Scott, policy director of Free Press, said in a statement. "This money must be tied to a single agency that can uphold clear principles of public service and enforce concrete administrative accountability."

Free Press and other groups calling for a national broadband policy say money for rollouts would create jobs and would bring new opportunities to U.S. residents in areas that do not have broadband. Some experts estimate 5% to 10% of U.S. households don't have broadband service available.

The broadband money will "strengthen the economy and provide business and job opportunities in every section of America with benefits to e-commerce, education and health care," a House Appropriations Committee document said. "For every dollar invested in broadband the economy sees a tenfold return on that investment."

The House Appropriations Committee's recommendations are the first step in a longer process to passing the so-called American Recovery and Reinvestment Act. President-elect Barack Obama and the U.S. Senate are likely to come up with different numbers. Obama has said that U.S. government investment in broadband is an important policy goal.

"We haven't seen an Obama plan, we haven't seen a Senate plan, we haven't had a vote on anything," said Art Brodsky, communications director of Public Knowledge, an advocacy group that has called for more broadband competition. "We're pleased that broadband is part of the equation and look forward not only to seeing the spending amounts, but on the conditions for distribution."

A final stimulus package could also include tax credits for broadband providers to roll out service in rural areas, in addition to the grants in the Appropriations Committee recommendations, added Rob Atkinson, president of the ITIF. "I think $6 billion is not that bad, frankly," he said. "But if that's all there is, then I'm going to be disappointed."

The $6 billion in grants would likely require additional spending by broadband providers receiving the grants, bringing the spending closer to what the ITIF and other groups wanted, Atkinson added.

The Appropriations Committee recommendations don't include details of the $275 billion in tax breaks in the $825 billion stimulus package. Those recommendations would come from the House Ways and Means Committee, which decides tax policy.

Other recommendations in the Appropriations Committee package:

  • $11 billion for building an Internet-based smart grid attached to the country's electricity networks.
  • $400 million to replace the Social Security Administration's 30-year-old National Computer Center. The State Department, Farm Service Agency and Agriculture Department would also get money for technology upgrades.
  • $20 billion for modernizing schools, including technology upgrades, and another $1 billion for computer and science labs in schools.
  • More than $11 billion for federal research, including $2 billion for the National Science Foundation for science and engineering research focused on environmental challenges and improving global economic competitiveness.
  • $20 billion to "jump-start" efforts to computerize health care records.

Sen. Barbara Mikulski (D-Md.), during a hearing today before the Senate Health, Education, Labor and Pensions Committee, said federal funding for health IT is needed, but she also urged caution. Lawmakers need to make sure health IT systems are patient centric and interoperable, she said.

Several other government IT projects in recent years have not produced good results, she said. The FBI spent hundreds of millions of dollars to revamp its automated case management system and "it wasn't worth a warm spit," said Mikulski. "We don't want another techno-boondoggle."

Copyright © 2009 IDG Communications, Inc.

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