Advocates Disagree on Broadband Stimulus

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The U.S. government should provide money for broadband deployment in an upcoming stimulus package, several groups said Friday, but the broadband advocates couldn't agree on how the money should be spent.

A couple of speakers at a broadband stimulus forum Friday called for the government to give grants to broadband providers to roll out service to unserved or underserved areas. Another speaker called for tax credits, saying a grant program would take months to set up.

Another speaker suggested that none of the broadband money in the US$825 billion stimulus package being pushed by President-elect Barack Obama should go to large incumbent telecom and cable companies that now provide a huge majority of the broadband connections in the U.S.

"I'm fundamentally opposed to taxpayer dollars going to absentee-owned networks, unless there's no hope of a local, community-based network emerging," said Wally Bowen, executive director of the Mountain Area Information Network, a nonprofit broadband provider in western North Carolina. "Local networks are going to create local jobs; they're not going to outsource their tech support to India."

Bowen and other advocates of government broadband spending spoke at a New America Foundation event the day after the U.S. House of Representatives Appropriations Committee recommended $6 billion in broadband deployment spending as part of the larger economic stimulus package. The House version of the stimulus package bill would include $2.8 billion for the Rural Utilities Service (RUS) of the U.S. Department of Agriculture to give out as grants and loans to broadband providers.

In addition, the House bill would give another $2.8 billion to the U.S. National Telecommunications and Information Administration (NTIA) for broadband deployment grants, with $1 billion of that money going to wireless broadband projects. An additional $350 million would go toward a national program to map areas that don't have broadband.

About 25 percent of the NTIA broadband grants would go to areas without broadband, and 75 percent to areas with limited broadband options, according to the bill. The money going to unserved areas would focus on providing basic broadband service of more than 5Mbps of downstream speed for wired broadband or basic wireless broadband.

In order to quality for the 75 percent of the money going to underserved areas, a wired broadband provider would have to deploy service offering 45Mbps downstream speed, and a wireless broadband provider would have to provide 3Mbps of downstream speed.

Both the NTIA and RUS money would require providers to abide by net neutrality rules, which would prohibit them from blocking or slowing any type of legal Web content.

But the speed and net neutrality rules could limit the number of broadband providers that apply for the grants and loans, said Rob Atkinson, president of the Information Technology and Innovation Foundation (ITIF), a Washington, D.C., think tank. Broadband providers such as AT&T and Qwest aren't currently set up to deliver 45Mbps, he said at the New America Foundation event.

"The more public-interest requirements you put on these networks, the less investment you will get," Atkinson added. "I would not be surprised, by the end of 2009, we could see very little investment that will come out of the stimulus bill as currently structured."

Atkinson also called for tax credits to be part of the package, in addition to grants. Grant programs could take months to set up, while tax credits could kick in immediately, he said. ITIF's broadband proposal would not disqualify large broadband providers from getting stimulus money.

But other panelists said tax credits are difficult to track, and it would be difficult for government auditors to guarantee that tax breaks go directly to broadband deployment in new areas. In addition, speed requirements will be necessary to ensure that the U.S. doesn't have to pay for a new broadband deployment in a few years, said Benjamin Lennett, a senior program associate at the Wireless Future Program at the New America Foundation.

Rural areas, which will use broadband for things such as telemedicine and distance learning, may need higher speeds than many urban and suburban users, he added.

"Do we want to give rural areas ... inferior networks? Do we want to give them second-best networks?" Lennett said. "You're going to need fast speeds and lots of capacity. There's no way we can give a band-aid here and a band-aid there to get them to 5 or 1 megabit. That's just not going to cut it, two, three, five, 10 years down the road."

But Derek Turner, research director at media reform group Free Press, said the net neutrality requirements are even more important than speed requirements. "We don't want to be giving federal dollars to fund networks that are closed and discriminatory," he said.

No large broadband providers were represented at the forum, and some panelists didn't hold back criticism. Like Bowen, Mark Cooper, research director of the Consumer Federation of America, called for community-based broadband projects, instead of money going to the large broadband providers. Broadband stimulus money should go toward wireless broadband projects based in the communities they serve, he said.

"The cozy duopoly of telecos and cable companies has failed to deliver," he said.

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