Broadband subsidy: too much money, but mostly well targeted

A few weeks ago I aired my worries about how the broadband funding in the Federal stimulus package was going to be spent. The government has now released documentation on that part of the package, and so far things look mostly OK.

The government has set up a Web site that is designed to let organizations, including states, apply for funding to support broadband deployment. And there is money to be had. The stimulus bill allocated $7.2 billion and directed the Departments of Agriculture and Commerce to hand it out. (Your tax dollars, or maybe your grandchild's tax dollars, at work.)

The Broadband Initiatives Program (BIP) is run by the Department of Agriculture's Rural Utilities Service (RUS) and the Broadband Technology Opportunities Program (BTOP) is run by the Department of Commerce's National Telecommunications Information Administration (NTIA). The Web site includes Notices of Funds Availability (a term that only Washington could have come up with) for these programs. According to the Web site the BIP will make loans and grants for broadband infrastructure projects in rural areas, and the BTOP will provide grants to fund broadband infrastructure, public computer centers and sustainable broadband adoption projects. There is also a separate document to be used by states that want to get some of the money.

These programs require that the money go to Internet connections that meet the FCC policy statement on network neutrality
and do not favor any lawful Internet applications and content over others (see, for example, lines 615 to 629 of the non-state program).

The program does not prohibit all types of invasive behavior on the part of the service provider but the provider is required to "describe any business practices or technical mechanisms they employ, other than standard best efforts Internet delivery, to allocate capacity; differentiate among applications, providers, or sources; limit usage; and manage illegal or harmful content." I guess it's OK for a provider to do bad things as long as they tell us that is what they are doing.

Of course, the provider must support wiretapping and can make use of "reasonable network management."

There are a few things that are not quite what I would have done if I had been in charge. One big problem is that the programs only talk about "advertised speed" of the connection to the Internet rather than what speed a user could reasonably expect to see. It does not take too much imagination to see how that can be (will be?) abused. The minimum speed that is specified (768Kbps downstream and 200Kbps upstream) is also very low in comparison to what is offered elsewhere in the world. (See "Fast Internet for individuals and businesses?" here.)

Another problem is that our tax dollars can be used to create non-Internet managed services (lines 634-637) as long as some Internet connectivity is also provided. This is just what I was arguing against in the previous column -- my tax dollars should not be used to subsidize carriers creating non-Internet services. At first blush, one might think that separate networks for public safety would be a good idea, but in reality, all that such networks do is create incompatible islands of connectivity. It would be far better if public safety communications were IP- and Internet-based.

Disclaimer: A primary aim of education at a place like Harvard is to bridge the incompatible islands of knowledge students have or acquire. But the university has not provided me with an opinion on the broadband stimulus program, so the above is my own review.