Stimulus bill includes $7.2 billion for broadband

Updated at 3 p.m. PST with comments from industry representatives.

President Obama signed into law on Tuesday the $787 billion stimulus package, which includes $7.2 billion for broadband grant and loan programs.

Both the House of Representatives and the Senate on Friday approved a conference report that reconciled the two chambers' versions of the bill.

The bulk of the funds directed at broadband--$4.7 billion--will be distributed through a program run by the Commerce Department, while $2.5 billion will fall under the jurisdiction of the Agriculture Department, giving particular emphasis to broadband deployment in rural areas.

The final version of the bill maintains that projects funded by the Commerce Department's National Telecommunications and Information Administration must adhere to nondiscrimination and openness principles. The funds must also be distributed before September 30, 2010, to projects that can be completed within two years.

The NTIA's "Broadband Technology Opportunities Program" is intended to "award competitive grants to accelerate broadband deployment in unserved and underserved areas and to strategic institutions that are likely to create jobs or provide significant public benefits," the bill says.

No part of the bill, however, defines the terms "broadband," "unserved area," or "underserved area." The NTIA is instructed to work with the Federal Communications Commission to define these terms.

The House version of the bill had included specific broadband speed thresholds for grant recipients, but the compromise version simply instructs the NTIA to fund projects that provide the highest possible speeds to consumers.

"A specific speed threshold," the bill says, "could have the unintended result of thwarting broadband deployment in certain areas."

Rather than specify that certain portions of the NTIA funds go to rural areas, the bill says the $4.7 billion is intended to serve all parts of the country, including rural, suburban, and urban areas. The money may also go to any recipient that best serves an area's needs, including wireless providers, wireline providers, or any provider offering to construct last-mile, middle-mile, or long-haul facilities.

The trade association Wireless Communications Association International said it is particularly pleased that commercial entities are clearly eligible for direct grants from the NTIA.

"WCAI members stand ready to move forward with plans to bring wireless broadband to rural and underserved areas," said WCAI President Fred Campbell. "Having direct access to grant funding will allow them to do so in a timely manner, helping create jobs fast, enable productivity, and jump-start our economy."

At least $200 million of the NTIA funds must go to competitive grants for programs that encourage sustainable broadband adoption, while an additional $200 million in grants is set aside for expanding public computer center capacity. Another $350 million will fund the Broadband Data Improvement Act, to develop a broadband inventory map and provide for certain grants.

The legislation also requires the FCC within one year to create a "national broadband plan" to ensure that everyone in the U.S. has broadband access.

While the Senate intended to distribute only $100 million in broadband funds through the Agriculture Department's Rural Utilities Service, the final number--$2.5 billion-- is much closer to the House's plan to allocate about $2.8 billion through the RUS.

Some have expressed concern that the funds may not be allocated efficiently if distributed through two agencies. Derek Turner, research director for the public policy group Free Press, told CNET News last week that groups eligible for grants may not know whether to apply for grants through the RUS or the NTIA. Grant recipients may not receive funds from both.

"With a program this massive you need it to be overseen by a single agency," Turner said, "and the NTIA is essentially the policy adviser for the president on telecommunications."

The RUS funds focus more on rural broadband access, requiring that at least 75 percent of an area receiving funds be in a rural area without sufficient high-speed broadband access. The RUS will give priority to projects that give consumers a choice of more than one service provider.

Advocates of universal broadband access were, overall, very pleased with the legislation.

"The broadband stimulus package is a clear sign that Congress is committed to connecting our country and maintaining an open Internet," Turner said. "These funds will provide a much-needed shot in the arm to those communities still stuck on the wrong side of the digital divide."

The American Cable Association, which represents more than 900 smaller and medium-size independent cable companies, praised the legislation's emphasis on providing rural areas with broadband.

"ACA and its members understand more than anyone what it takes to provide high-speed Internet service in small markets and rural areas across the country; they have been doing it for years," ACA President and CEO Matthew Polka said in a statement. "Funding broadband programs will enable small and medium-sized cable operators, who have already invested significant private capital into their communities, to receive funds to invest in the infrastructure improvements necessary to offer more advanced broadband services."

[chrisfrary]

So basically more money to line the telecommunications companies' pockets. Thank you Congress! It worked so well the first time. I know people that are getting 100mbps 60 miles away, we get 8-10mbps 30 miles, then 5-8mbps here, then 56kbps 10 miles away from us. Please note that the 100mbps is in a rich town, then 8-10 is a little larger than us, and 56kbps are people that line the road between 2 cities that both have broadband solutions.

[sam99999999]

I totally agree. What a joke. Less than 1% of the stimulus is being spent on something that could've been good.

Instead of writing into law a broadband "universal service" requirement such as was mandated for phone service in the last century, we get a vague mandate that provides nothing.

There will still be no broadband in rural communities wherever the cable and telco monopolies deign to claim it's too expensive to provide.

[indysurfn]

What you say is absolutely correct. But other articles will let you know that this is regards mostly BPL. BPL allows 200 to 400 BPS at a cheap price to all locations. Including ANYWHERE that a power line goes because the signal will be in the power line itself directly into the power plug in your house. Not like A DSL, or a Cable line, or a ISDN, or a Dial up. BPL(Broadband over Power Line) some are starting to call it BOPL to include the work OVER. This is not with the limits that you are mentioning. Plus it is cheaper. With one problem, it needs to have a updated power lines to come in the $20 a month range, which is the goal. Our country does not want us to be behind others because all are upgrading their countries plus our government say it is a NATIONAL SECURITY ISSUE, and a energy issue, which makes it also a economy issue.

[supoman]

We need these investments if we want to continue (or at least begin) to competitive in a global economy. This capacity can be the backbone for the data centers and call centers of the future.( which will happen once it cost more to offshore job to India....maybe 2-3 years from now)

[Commander_Spock]

Re: "Stimulus bill includes $7.2 billion for broadband..." Should this not have been "Stimulus bill includes $7.2 billion for" the Acela Express that will be serving "all parts of the country, including rural, suburban, and urban areas" and picking up "Conficker" and Housing Industry Trash (Security and Data Integrity...). Do folks need "tickets" (or, do they have to go deeper in their pockets) to get on board!!!

[fazalmajid]

The telcos were given 200 billion in tax break in the nineties, in exchange for a promise to bring fiber everywhere in America. They pocketed the money but reneged on delivering broadband. Why would it be any different this time?

http://isen.com/blog/2006/01/book-200-billion-broadband-scandal-by.html

[indysurfn]

I agree! But, I have to leave the door open on this one. Those companies that where given the break like you said took the money. And got around the obligation of the money. But if you read between the lines. Its like this you are a landlord, you have ten tenants. The landlord would represent the government and the apartments would be occupied by the current telecoms. The deal is you say hey! I will give you three in apartments A, B, and C 90% off your rent if you do the improvement to the yard work. Well all they do is throw down a clump of seeds and let the place go. So the next time you say to another set of tenants H, I, and J hey if you do the yard work better than they did I you will be able to take there business from them. The kicker is you know both will have a open competition. This time the new tenants are getting funded to compete against the existing companies whom have enough resources to 'finally act right' to survive.

[atici]

@supoman: I don't think you understand. Global economy necessitates that governments stay away from wasting its citizens' money and let its citizens choose where to invest. This is because people tend to invest their own money more carefully (other than the government spending other people's money). It is a known fact that private enterprise achieves things more cost efficiently. Global economy does not mean a bunch of governments around the globe go into a spending craze so that one day these investments may turn out to be useful. We cannot spend out way into prosperity.

[ivorycruncher]

Forgive me if I'm not thinking this through, but with so many people still on dial-up (which is all but unusable nowadays) or very lame "broadband" (512 kbps or lower is NOT high-speed by today's standards), I think this money should go towards making it so that virtually all Americans can get affordable high-speed internet, in the ballpark of 1-3 Mbps. A 3 Mbps connection can easily handle any common form of web browsing, and is decent for online photo sharing, streaming video, etc.

[mikeburek]

It's a pain for a normal citizen to find and understand the leasing / ownership / monopoly agreements that cities have with telcos who lease / own these lines.

If a neighborhood / subdivision decided they wanted to create a network in their area and maybe then hook that into the internet on a faster backbone, is there civilian equipment that could cover such a large area? Ethernet cables have a max of 350 m, right? And there are only so many daisy chained routers you can have on a line. If a single neighborhood wanted to do this, would they have to make a central hub, and then run fiber from the hub to each house? Yes, I know that's crazy hard work and would require fiber converters at each house, and there are physical limits on the bends on fiber.
And I'm just assuming the lines can be hung on telephone/electric poles, even though I know that is subject to city / owner rules and agreements ($$).

[Dango517]

Hmmmm, "so-called stimulus package". So was it a, so-called "bank bailout" 6 months ago?

[herocious]

It's clear that this billion-dollar stimulus bill is good news from some people and not such good new for others. We can call this people Crazy Ann and Bert, respectively:

http://theopenend.com/2009/03/12/a-tale-of-two-houses/