12 Comments

Summary:

[qi:101] The two national agencies responsible for allocating $7.2 billion in broadband grants as part of the stimulus bill today released the rules governing the process and said the government would provide about $4 billion in loans for the first of three funding rounds. That money […]

[qi:101] The two national agencies responsible for allocating $7.2 billion in broadband grants as part of the stimulus bill today released the rules governing the process and said the government would provide about $4 billion in loans for the first of three funding rounds. That money will start flowing to projects in November. It’s a bittersweet moment for folks hoping for better broadband in the U.S., as the rules don’t mandate faster speeds or abide by current net neutrality regulations, but will send a lot of money to both states and private companies hoping to build out Internet access.

First off, the definition of broadband in the rules is set in the last century — defining it as advertised speeds of 768kbps down and 200kbps up. Senior administration officials said on a conference call today that the broadband bar was set low in order to ensure that difficult terrain and sparsely populated areas of the country could still apply for grants. Since I’ve written about satellite providers that can deliver 1.5Mbps down (or at least advertise that they do), I’m not impressed with this reasoning.

However, a senior official said that applications for funds will be judged on the speeds they offer, so presumably, a firm offering a fiber connection to the same amount of people may fare better than a project that is pushing DSL, but multiple other factors such as cost will come into play. As for net neutrality, the rules state that all of the projects will have to at least meet the net neutrality guidelines set forth in the FCC’s 2005 broadband policy statement, which may anger some ISPs. It’s unclear, however, if projects will be held to the standards of any future net neutrality proposals that may be adopted.

The rules do allow broadband money to go to private companies as well as nonprofit agencies (at one point, there were concerns that only nonprofits would reap the cash), but individual states will have the chance to vet projects and submit feedback on them. The agencies will also split their funding between underserved and unserved areas, which was another big point of contention.

So let’s do a quick breakdown here of how the first wave of funding will play out. The Department of Agriculture has $2.3 billion it plans to allocate through the Rural Utilities Service: $400 million in grants and $800 million in grants and loans will be allocated toward last-mile services that connect to a consumer’s home; $800 million in loans and grants will be available for the middle mile; and $325 million will be kept in reserve to fund worthy projects in either of the above categories. RUS grants will go only to rural, remote and unserved areas, while loans will go toward rural, remote and non-remote, underserved areas.

The National Telecommunications and Information Administration has $1.6 billion it plans to dispense as grants, with $1.2 billion allocated to provide last- and middle-mile services to unserved and underserved areas that meet one of several possible criteria, $50 million for computer centers, $150 million to drive broadband demand, and $200 million held in reserve to spread among the three segments if needed. Applications will be accepted between July 14 and Aug. 14, and finalists will be chosen by Sept. 15. The money will start flowing to accepted projects by Nov. 7.

You’re subscribed! If you like, you can update your settings

  1. Towerstream Blog » Blog Archive » The Broadband Stimulus Marches On Monday, July 6, 2009

    [...] – private, public, non-profit organization, etc.  As Stacey Higginbotham from GigaOM noted, “At one point, there were concerns that only nonprofits would reap the cash.”  Most people in [...]

  2. How The Broadband Stimulus So Far Fails Innovation Wednesday, July 8, 2009

    [...] Higginbotham | Wednesday, July 8, 2009 | 11:51 AM PT | 0 comments The rules surrounding the release of $4 billion in federal funds aimed at providing better broadband and creating jobs announced last week have so [...]

  3. Where Will $4.7B in Broadband Bucks Go? You Decide! Thursday, July 9, 2009

    [...] a volunteer grant reviewer. That’s right, when the government wants to give out $4.7 billion (only $1.6 billion in this first round) in 14 months it has to cut some corners to make sure it can handle the load. That means bringing [...]

  4. Consumer Groups Attack Broadband Stimulus Rules Wednesday, July 22, 2009

    [...] and consumer-oriented nonprofits have written a letter protesting the way the first tranche of $4 billion in broadband stimulus funds is being distributed. They sent the letter to Larry Strickling, the administrator of the National [...]

  5. Broadband Stimulus Plan Has No Map for Success Monday, August 10, 2009

    [...] an entire 100-plus-page document noting the rules around who can apply for grants and how those grant applications will be judged. The grant recipients will be judged primarily on [...]

  6. Broadband Stimulus Plan Has No Map For Success « Count Us Out Tuesday, August 11, 2009

    [...] an entire 100-plus-page document noting the rules around who can apply for grants and how those grant applications will be judged. The grant recipients will be judged primarily on [...]

  7. Slow Servers Extend Deadline for Broadband Stimulus Bucks Thursday, August 13, 2009

    [...] | Thursday, August 13, 2009 | 10:25 AM PT | 0 comments Folks applying online for some of the $4 billion in broadband stimulus funds available in the first round of grants have a little breathing room thanks to the government [...]

  8. Will Wireless Be the Broadband Stimulus Winner? Friday, August 14, 2009

    [...] Rich Wonders, vice president of strategic marketing for Alcatel-Lucent, had forecast after viewing the rules associated with the grant-making process. TowerStream, a WiMAX provider, confirmed that it’s applying for a grant, and most of [...]

  9. Wireless Cos Ask for $169.6M in Stimulus Bucks — Where’s Wireline? Wednesday, August 19, 2009

    [...] responsibility for distributing the $7.2 billion in overall broadband stimulus funding is split between the USDA and the NTIA, and the disbursement of the money is divided into three tranches. The deadline for the first [...]

  10. Holy Handouts! Applicants Seek Almost $28B in Broadband Bucks Thursday, August 27, 2009

    [...] $7.2 billion in broadband stimulus money said today that 2,200 entities have applied for the first tranche of $4 billion in grants. The total funding sought was just shy of $28 billion, according to a release posted on the [...]

Comments have been disabled for this post