A long journey to broadband stimulus

By Craig Settles

For those who swear by the adage, a zebra is a horse designed by committee, the past few weeks watching the broadband stimulus bill grind through Congress must have been a joyless experience. With details of the final bill trickling down from the Hill (as of this writing), let's look at what kind of creature compromise hath wrought.

Champions of a national broadband strategy and/or ubiquitous network who want it all and want it right now probably weren't happy with the broadband stimulus bill from the get-go. Those just as fervently anxious for change, but pragmatically driven, see elements in the bill as the first significant steps in what will be a long journey. But at least some wind is at our back and will hopefully increase.

First and foremost, the broadband bill is supposed to be part of a stimulus to put people to work. The final wording will determine how quickly money actually gets into the hands of communities that can move these projects quickly, but it appears the grants are clearly targeted to buildouts, so that should minimize time dickering around or money hijacked for other purposes by states severely strapped for cash.

I expect some people will be pretty surprised in a year about the breadth of jobs created by these grants. If you look at communities such as Greene County, N.C., Pulaski, Tenn., and Fredericton, New Brunswick in Canada, the greater number of jobs came not from building their networks, but from the networks' significant influence attracting numerous companies into these areas. There was also a surge in home-based businesses.

Lafayette, La.,  is a particularly telling testimonial. Shortly after word hit that the town's fiber network was going live, the city closed a deal with a call center operation that reportedly will bring 1,000 jobs to the area. This deal hinged heavily on the town's 50 Mbps of high-speed access. It's not only the quantity of jobs, but also the quality. Bristol, Va.'s broadband networks attract companies whose new jobs pay $10,000 or more above the average annual salary in that area.

Another concern of many was the role of the incumbents. Would they get a major windfall yet ultimately leave us no better off than we were in 2008? Incumbents could be partners in advancing broadband, but often they aren't, in part because state and national legislatures pass laws rewarding their behavior that negatively impacts constituents. Many broadband success stories so far happened when the local communities use local and regional service providers or run the networks through public utilities, despite some incumbents' worse efforts. The stimulus bill should enable more of these successes.

It appears no money will be granted through this stimulus package until network projects are locked in with state or local governments, I'm hoping with irrevocable penalty clauses for failure to deliver. There should be no rewards based solely on a promise of future high-speed networks. With its heavy focus on grants, smaller providers should from this bill since tax credits wouldn't have helped them much in the short run. What also will help them is Congress taking action to loosen up bank credit.

Two key areas of great concern are somewhat tangential to the bill. First, the administrator for NTIA will be important because that organization subsequently has huge influence in distributing much of the stimulus money. Secondly, the 60-day process required in creating the request for proposals will be important because these govern grant distribution.

An administrator who cares deeply about broadband, and understands fully what the technology can do will help the broadband bill achieve maximum good for communities. Pay attention to what happens with this appointment. The RFP development period is the last chance for people concerned about broadband to exert influence to give the bill an additional dose of potency, or strip away needless impediments. After this, what you have is all you get for this round.

Quite a few people are no doubt waiting to see what happens with open access or net neutrality lite or whatever the current catchphrase is for "keep the pipes open to competition." Hopefully by the time you read this we'll all know the exact wording. But expect there to be some wording in the bill that specifically requires, or at worst "encourages," open networks. Again, it will be the NTIA administrator and the RFPs that give this part of the bill teeth--or not.

So, do we have a zebra or just a horse of a different color? Probably a horse. But definitely not a thoroughbred. However, the advocates of change should not be disheartened. Harold Feld, industry blogger at Wetmachine.com and huge broadband champion, states that, "as a practical matter, this bill has limited impact. Don't say that it solves all of our issues. But anything that comes out of this bill is a major victory because it's a big step forward."

So consider this a big Win for broadband advocates. We've seen an issue that's suffered from abject White House neglect for eight years become a centerpiece of economic discussions from the new President's office to the halls of Congress and beyond. We're witnessing legislation that pushes the needle in the right direction. As we overcome inertia, momentum is building for greater advances toward a coherent and meaningful national broadband strategy.  

Author's note: Right at filing time, Harold Feld sent over this link to what is expected to be the final wording of the Broadband Technologies Program.
Craig Settles is an industry analyst and workshop leader who helps organizations understand the benefits of broadband and mobile technology. Check out his website at www.successful.com.