US agencies face broadband stimulus challenges

U.S. government agencies may have a difficult time promptly allocating the US$7.2 billion for broadband deployment in an economic stimulus package recently passed by the U.S. 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, 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 currently 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 currently has a small broadband loan program, but due to 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. NTIA has only a handful of grant officers currently 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 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 established net-neutrality rules at 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.

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