Blog Post

Telcos to Congress: More Money Please

[qi:004] An association of small telecommunications providers, some of them rural, has taken a look at the broadband dollars in the stimulus bills making their way through both houses of Congress and said, “Please sir, can I have some more?” What’s more disturbing (although just as predictable), is they want to lower the speed requirements to 1.5 Mbps downlink.

The stimulus bill that passed Wednesday in the House offers $6 billion in grants for providing broadband (much of that in rural areas), but required speeds of 5 Mbps down and 1 up. The companion bill moving through the Senate has the same speed requirements on the low end, and offers $9 billion in grants. But The Independent Telephone and Telecommunications Alliance along with Qwest Communications (s Q) tells the Wall Street Journal that the money isn’t enough and the speeds are too high, given that reaching rural areas with broadband is already expensive. Faster speeds only add to the cost.

It is expensive to reach rural areas with fat pipes, but it’s far more expensive to build out infrastructure today that will be obsolete in a few years. We shouldn’t cave on speed requirements to rural areas if we really want to offer the economic benefits of broadband access. For those seeking more money, members of President Obama’s team have indicated that the stimulus bill is only a part of his plan for universal broadband.

7 Responses to “Telcos to Congress: More Money Please”

  1. Vivek Bhaskar

    When I was in India in August last year, I took a road trip to visit a world heritage site at Hampi. Hampi is 200+ miles from both Hyderabad and Bengaluru. I saw villages along the way being wired for fiber. FIBER.

    Why can’t we Americans have fiber in our cities let alone in our towns 200+ miles away from our large cities?

    I pray that the 5 Mbps /1 Mbps language stays in the final bill…

  2. There’s no point in rolling out ultra-fat pipes in rural areas. In those areas, backbone bandwidth costs as much as $300 per Mbps per month. A 1 Mbps, symmetrical, full-time connection is already beyond what any residential user will pay.

    The important thing, for the moment, is to get people basic broadband via systems that can be upgraded later when the users can afford the bandwidth. The stimulus bill, in its current form, does not do this.

    See my complete analysis of the stimulus bill at

  3. jjblogging

    It is interesting to see the various requests to Congress – both in terms of everything included in the stimulus bill and everything else that Congress will have to deal with. I’m curious to see how Congress will handle all of the competing priorities. Like in this case, I generally support the original proposal and I hope Congress doesn’t get dragged down into a lengthy debate because the telecom companies are complaining about getting a good deal.

    The Democrats are touting their first 100 days as the time when they are going to get a tremendous amount accomplished. I hope they do accomplish something significant in the first 100 days. It seemed like the last Congress didn’t accomplish much in 2008. I saw that the Friends of the U.S. Chamber of Commerce is asking people to give their opinion on the most important thing for Congress to do in their first 100 days. They’re going to work to get Congress to accomplish what the people actually want them to do. Make sure to add your opinion so Congress can know what we want them to do-

  4. Ninevolt

    They can go cry me a river. After nearly a decade of dragging their feet and hoarding profits, they’re acting like we’ve asked them to run a fiber line to Mars, regardless of the VERY generous amount we’re offering to pony up. This century is going to reward the well connected, and its about time US telecoms woke up and smelled the bandwidth.

  5. Bikerdude

    No more welfare. High speed internet service in the United States cost way, way more than it does in other parts of the world. The money has been pouring in to these companies and they put it in their pockets instead of improving their service. Now that welfare is possibly available to them they have their silver cups out…
    The internet should be structured as an education and information delivery tool. The glut of advertising and other commercial use should be taxed heavily to support the real need, which is to inform and educate our population.

  6. Bill Dollar


    The $9B in grants in the senate bill has no speed obligations at all, unlike the House bill. The only speed obligations in the Senate bill are in the finance portion, on the 10% and 20% tax credits.

    This is terrible of course. And the tax credits are terrible, as they are not structured to encourage new investment. Verizon can cut their cap ex plans, and still get a fat 20% tax break.