Politics and Law

WASHINGTON--A diverse group of organizations Tuesday agreed that the criteria for choosing which broadband projects to fund with stimulus dollars should be largely based on the potential for job creation, but they could not agree on the degree of risk the federal government should take in its broadband investments.

The departments of Commerce and Agriculture have a combined $7.2 billion from the stimulus package to dole out for broadband deployment and expect to receive more than 10,000 applications for funding. The departments gathered together a number of different organizations at a public meeting Tuesday to discuss how to distribute those funds effectively and fairly, and how to hold grantees accountable.

The most important criteria, the panelists said, should be a project's potential for job creation. Other items mentioned included timeliness, sustainability, cost, and interoperability. There was dispute, however, over whether the stimulus funds should focus on clear, immediate benefits, or potential long-term results.

Jeannette Wing, assistant director of the computer and information science and engineering directorate at the National Science Foundation, suggested the government should invest not only in projects that will have short-term economic impact but also those that will pay off decades down the road.

"Broadband investments should be a strategic down payment on our future," she said. "Today's students are tomorrow's workforce and tomorrow's customers."

Since the stimulus funding is seen as a down payment on universal broadband access, the program provides a good opportunity to form a broader deployment strategy, said John Muleta, the CEO of M2Z Networks.

"You want some level of diversity to see what will work to reach underserved and unserved communities," he said. "By its very nature, (the stimulus is) trying to do projects that otherwise wouldn't be funded. This is a bit like venture capital where you'll fund 10 ideas to get one that really breaks out."

Others insisted the funding criteria should focus more strictly on jobs.

"We're talking about taxpayer money, we're not here to try experimental projects," said Lisa Scalpone. "This is a one-time jump-start and needs to be viable in the long term."

In either case, panelists said, clear objectives for grantees will make it easier for the government to provide effective oversight of the broadband stimulus funds.

"We're going to have programs that are going to be funded from all different shapes and sizes, and it's important they all have to meet the same goals," said Amina Fazlullah, a media and telecommunications attorney for U.S. Public Interest Research Group.

The broadband provisions of the stimulus package included an initial set of criteria for the two departments responsible for the funds to consider, such as whether a project will increase affordability and subscribership, whether it will provide the greatest broadband speeds to the greatest population, and whether it will enhance service for health care delivery and education.

Meeting those goals--not to mention a host of others numerous groups would like to see addressed--means the Commerce and Agriculture departments will be in the business of picking winners and losers, panelists acknowledged.

"There's going to be an enormous amount of subjectivity," Muleta said. "What we have to do is have some discretion for the people developing the program to determine how to mechanize this."

WASHINGTON--Two government agencies have 19 months to distribute $7.2 billion in stimulus funds for broadband deployment projects in all 50 states--and already thousands of potential grant recipients are knocking at their doors.

President Obama's economic stimulus package dictated that all of the money set aside for broadband will have to be allocated to worthy projects by September 30, 2010. To meet that goal, the federal government will need the help of "the best and the brightest," Mark Seifert, one of the people responsible for the broadband funds, said Tuesday.

"I invite you to work very hard--and very fast--to reach our goals," said Seifert, a senior adviser to the National Telecommunications and Information Administration, the federal agency responsible for distributing $4.7 billion in grants for broadband.

The NTIA on Tuesday, in conjunction with the Federal Communications Commission and the U.S. Agriculture Department, held the first in a series of meetings to engage the public in a discussion about ways to distribute the broadband grants and loans. The agencies decided on this format to solicit public input after receiving more than 2,000 requests for individual meetings from states and other groups interested in the funding.

"It's going to have to happen very fast," said Bernadette McGuire-Rivera, an NTIA administrator. "Everyone needs to work together to make sure we do this and we get it right."

Before a crowd of hundreds packed into an auditorium at the U.S. Commerce Department, the agencies announced they are holding six more public meetings--four in Washington, one in Las Vegas, and one in Flagstaff, Ariz.--between March 16 and March 24 to give the public a chance to influence how the broadband grant and loan programs are shaped. The agencies also released on Tuesday a formal request for information (PDF) soliciting input on a range of topics including the role of the states in the grant programs, selection criteria for grant awards, financial contributions from grant applicants, broadband mapping, and benchmarks to evaluate the success of the programs.

The FCC, which is charged with formulating a strategy for nationwide broadband deployment within one year, will also kick off a process of public inquiry for that project at its next public meeting on April 8.

"This will be a truly inclusive process," acting FCC Chairman Michael Copps said at the meeting. "The goal of our national strategy must be to bring value-laden, high-speed broadband to all our citizens, no matter who they are or where they live...'All' must mean everyone."

The officials at Tuesday's meeting acknowledged that numerous issues that will impact the grant awarding process remain unclear. For instance, the broadband stimulus funds were expressly approved for "unserved" and "underserved" locations, but those terms remain undefined.

McGuire-Rivera said that these are the sorts of issues the request for information and the public meetings are intended to resolve. In the meantime, the stimulus bill was prescriptive enough that prospective grant recipients "can start working on your grant application as soon as you walk out the door," she said.

The NTIA plans to make grants available in three rounds. The first notice of availability will be published sometime between April and June, with subsequent grant application rounds taking place around October of this year, and then between April and June of 2010. The agency is required by the stimulus bill to award at least one grant per state.

The Agriculture Department's Rural Utilities Service, which is responsible for distributing $2.5 billion in grants, loans, and loan guarantees for broadband, plans to start making its funds available within the next 60 days. After that first notice of availability, the RUS will have at least two more grant application periods.

As the agencies configure the grant and loan programs, they will be obligated to consult with the states, establish open-access principles, and create a database of all the grant applications. The stimulus bill also set aside $10 million specifically for audits and oversight of the broadband programs.

"It's sort of unusual for (Congress) to set aside money like that," McGuire-Rivera said. "We will be watching these grants very carefully."

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."