Broadband Stimulus Package Nears Finish Line

27 Comments

The House and Senate held a pre-Valentine’s Day love fest last night and produced a compromise stimulus package; the two houses must now approve the conference bill, after which it would be sent to the president. For details on the full $789 billion plan, you can check out the legislation. We’ve outlined what the $7.2 billion million devoted to broadband funding will buy (if you’re looking for the tax credits, they’re no longer there):

  • The grants will be split among two agencies — something most broadband proponents were against. The National Telecommunications and Information Administration will administer $4.7 billion, and the Department of Agriculture’s Rural Utilities Service will administer $2.5 billion, which may cause problems for the rural ISPs.
  • There are no longer any speed requirements, which means the federal government, which currently defines broadband at 768 kbps, will determine appropriate speeds for the underserved areas getting grants. Hopefully they will think ahead, and opt to push fiber where it’s reasonable to do so, and fast wireless where it’s not.
  • The grants must all be dispersed by Sept. 30, 2010, and those receiving them have two years to build out infrastructure. Additionally, the FCC has one year to come up with a comprehensive national broadband plan to provide universal coverage and encourage citizens to use the network.
  • Grant recipients must adhere to “non-discrimination and network interconnection obligations.” At a minimum, this means the principles contained in the FCC’s broadband policy statement.
  • The Commerce Committee must gather much-needed data on broadband penetration within the next two years and create a publicly, available searchable database on the NTIA web site. Maybe it will resemble this map of France. The bill allocates $350 million for the project.

27 Comments

Rene Cruz

In my opinion, in order to maximize long term impact and be fiscally responsible, the US government should consider some sort of loan program to businesses, including SMB, enterprises, and government agencies, for broadband infrastructure equipment investment. In order to insure that funds are used responsibly, the loans should be repayable on a fairly short time scale, say 5 years maximum and at for a nominal interest rate. In order to qualify, the loans should be for purchase of telecommunications equipment that amounts to investment in broadband infrastructure.

The key here is to stimulate innovation and installation of the most efficient and appropriate technology with the appropriate budgetary constraints. This encourages sales of network broadband infrastructure equipment that is the most valuable to end users, which they cannot otherwise afford due to the credit crises. (As a result, this should also be considered within the context of the bailout program for banks).

As an example, consider a small business in rural america that is unable to get broadband Internet at an affordable price. Today, the options are pretty much limited to T1 based solutions, which are not only expensive for the end user, but the carrier as well. Comparatively speaking, DSL is much more efficient in terms of $ / Bit/sec. In the context of broadband infrastructure investment, the government could loan the business say $3000 to buy equipment that would allow bonding together of DSL lines. For the company, since the equipment has an ROI much less than 5 years, they are able to obtain increased Internet bandwidth for a fraction of the cost that they would pay for a T1 based solution of equivalent bandwidth. For example, bonding together 6 DSL lines at 512kbps up and 5 Mbps down would create a pipe of 3Mbps up and 30Mbps down, and would have a cost comparable to a T1 line, including repayment of the loan for the equipment required. Alternatively, a rural ISP could buy the equipment and market such a 3Mbps up / 30 Mbps down service to the business. Examples of such equipment available today can be found by searching on “DSL Bonding” or “Broadband Bonding”.

The above comments also should be considered in the context of broadband infrastructure investment for target applications, such as health care records modernization and distance learning.

Prefabrik

I’ve heard good and bad things about bringing broadband to rural america, let’s hope these red states know what to do with it and we don’t end up spending billions for a technology that might go 1) unused and 2) become outdated before it’s completed ie Wimax

Jesse Kopelman

@Stacey

Those online coverage maps offered to consumers are of poor resolution and not very accurate. They often contain projected coverage from sites scheduled to come online in the near future (but sometimes don’t). Information about what technology is deployed in a given area is fuzzy at best. The details are not consistent from region to region. They don’t get updated for months (years?) at a time. Most importantly, it is just pictures. How do you correlate the data across carriers? You can’t overlay various carriers. Also, where’s the coverage maps for wireline carriers? I have seen them, but they’re not put online. Even these private ones are not very useful for the reasons I talked about in my first post. Even if you got all these maps, how is having thousands of different maps (to cover the entire country) going to help you? Some kind of giant printed almanac? Don’t you think the real issue is compiling the data into a form that policy types, who won’t necessarily understand the technology part, can make use of. Again take a look at the data and reports the Census provides. This is what is needed. To do this right IS a big project. It’s worth the money too. The best way to waste money on deploying networks is to go in without understanding the actual conditions on the ground. Not doing this will cost 10X as much in waste as doing it right will. Not to say that spending $350M is any guaranty of doing right, just that you’ve eliminated being too cheap as reason for failure.

Stacey Higginbotham

@Jesse you’re giving me entirely too much credit. I was being flip, but it appears I don’t understand exactly what’s involved. Given that I can plug in my address on an ISP’s web site and get a fairly instant response about service options in my area, it seems like much of this information is already aggregated by geographic region. Yes it would need to be aggregated at some cost, and there are likely questionable areas that may need to be filled in manually, but what exactly am I missing? Just that the carriers can’t offer governments access to the same data that they use to determine if they can offer me service?

Brittancus

SOLD OUT BY DEMOCRATS! NO WONDER REPUBLICANS WHO ADDED THE E-VERIFY AMENDMENT, WOULDN’T VOTE FOR STIMULUS?

Whats the earthly good of this Stimulus bill being passed for American workers, when we are forced to support millions of illegal aliens. The Democrats and special interest lobby conspired to kill the only tool we had against the invasion. The Republican E-Verify amendment was removed from the Stimulus package behind closed doors without debate. The mandatory Federal law with a 99.6 success rate would have halted illegal aliens stealing work from AMERICAN WORKERS. We can thank Speaker Pelosi and Senator Harry Reid for killing this law that made sense, when the whole logical idea of this Stimulus bill, was to get millions of unemployed legal workers a job.

Tell the Democratic politicians what you think and demand E-Verify be made a mandate! Jam the Washington Switchboard with your angry voices: (202) 224-3121

Other honest information at JUDICIALWATCH, NUMBERSUSA, AMERICANPATROL & CAPSWEB.

COPY & PASTE! PASS THIS ON!

Joshua G

@ Jesse

You make some very valid points. The underlying problem, IMHO, is deregulation in telecommunications. I am all for self-regulation if it can be done well, but, as with banking, telecom has become a virtual wild west of late.

It’s absolutely ridiculous, in the first case, to call 768 Kbps broadband. This speed will have the same effect as broadband caps ultimately will in terms of stifling information distribution and consequently innovation.

In the second case, it’s not the consumers fault that all the big telecom companies can’t get along, why should the consumer have to suffer? We hardly told companies that it was ok to make their networks proprietary, but without regulation requiring them to have standardization we are left at the impasse we currently find ourselves in.

The solution is regulation but it has to be done in a way that is EXTREMELY forward looking. Broadband caps, as mentioned many times on this website, are ridiculous and should be abolished; but at the same time 768 Kbps is far too slow. In addition utilities are public servants and their business models have to reflect that.

In all the solution is to make fiber the standard and not the exception, and to caste broadband infrastructure in the same light and importance as transportation.

-Josh

Jesse Kopelman

@Stacey

People probably think you are joking or being flip, but this is absolutely true. Every state and hundreds of counties and smaller municipailities have all tried to obtain this information from carriers with very little success. What happens is that the carriers provide route maps that aren’t labeled or geo-referenced. They also make no distinction on their maps about projected or actual coverage or how up-to-date anything is. What may surprise some people is that even working inside a carrier it is very hard to get a hold of such data!

I don’t know why people are crying, though. It is very human labor intensive to assemble all the data into a usable form, even if you overlook the challenge of getting it. This isn’t about just making a single map. It’s about building a database of Geo-referenced data like what is done with the US Census. This means lots of jobs for GIS people and various types of network engineers. Isn’t that the very definition of Stimulus? Saying we should force the carriers to do it for us is like saying government should just force companies to hire more people rather than have any spending provisions in the Stimulus Bill.

Stacey Higginbotham

Yup, $350 million is excessive, but since the ISPs won’t give up their “competitive information” on subscribers and networks, and no one in the government wanted to force this, we needed to figure out some elaborately expensive way to do it otherwise.

Spandan

How long is it taking?

It has been over an year since recession hit the US. What exactly the policy makers are thinking?

I doubt, the color is more political than economic now, yes even now!

rohit

DSLAMs and BRAS i meant… even the dumb BRASes do billing, dont they? billing records + DSLAM maps + POTS stuff gives you everything and netflow + cisco/juniper tools will give you the rest of the network map… to get fancier logical maps, data mine on netflow stats a la Guavus networks.

Benoit Felten

I agree with Ted that the amount of money spent on that map is simply stunning. That’s the price of deploying fiber to 350 000 homes at 1000$ a shot (average market costs). I would also point out that the French map in Stacey’s article is produced for very precisely 0 EUR.

This is exactly the kind of projects that could and should be crowdsourced. I’m sure there’s more than enough enthusiastic people willing to document the lack of choice in broadband they get…

rohit

wtf ? why even 50million for figuring out broadband penetration ? DSLAMs are all managed by EMS/NMS systems by all carriers big and small… running a list of all of them and correlating them w/ population/census/city-maps etc (or Google Maps for that matter) shouldnt take more than a few months a few 100s of K for all carriers especially when a very high % of connections are managed by the big carriers and cablecos ?

the 7.2 million number in main body is a typo (bbbbillions) – perhaps 350million is 3.5Million or 350K>… i wish.

Ted Murphy

$350 mm for a map of broadband penetration? I could get that done for $50 mm, as could any number of entrepreneurs.

More broadly, which would be a more productive use of $350 mm for our country — funding a map of broadband penetration or 7 fundings of $50 mm each for startup companies that you or I or any reasonable group of people choose?

That $350 mm is a colossal waste. Luckily the other $788.65 billion will be allocated productively.

Andrew Wise

I’ve heard good and bad things about bringing broadband to rural america, let’s hope these red states know what to do with it and we don’t end up spending billions for a technology that might go 1) unused and 2) become outdated before it’s completed ie Wimax

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