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U.S. Government Delays Broadband Grants

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[qi:101] One of the federal agencies responsible for administering $4.7 billion in broadband stimulus grants has quietly delayed its plans to approve and distribute money under its program. The National Telecommunications and Information Administration late last week issued a statement noting that it will accept grant applications in September and aims to distribute its first grants in December. However, in a March meeting it had said it hoped to accept grants in April and May and start delivering the first round of funding in June.

The delay isn’t a terrible thing for most of the entities hoping to get grant money, as the rules that will govern the distribution of the funds and even set the priorities for the NTIA have not been announced. Craig Settles, an independent broadband consultant, notes that the delay will likely benefit many of the larger cities and combined municipal efforts because it gives them time to think about building a sustainable business plan around their broadband deployments.

However, the delay — and general confusion over how the money will be distributed — is a fantastic example of how herculean a task it will be to funnel $7.2 billion through the two agencies (the Rural Utilities Service will oversee the distribution of $2.5 billion) in a period of less 18 months. The American Reinvestment and Recovery Act mandates that the grants be issued by Sept. 10, 2010, and the subsequent projects should be significantly deployed within two years of receiving the grants.

To think that the NTIA, which has an annual budget of $19.2 million for fiscal 2009, will be able to wisely invest $4.7 billion in less than 18 months is akin to thinking the proverbial $500 toilets purchased by the Pentagon were worth every penny.

10 Responses to “U.S. Government Delays Broadband Grants”

  1. The situation is much worse for the makers of equipment. What the Government has effectively done is forced all rural carriers to hold off on capex and wait until government dollars become available instead.

    Far from being a stimulus, it is an anti-stimulus for the telecom equipment business, and yet another example of the unintended consequences of government meddling.

    What SHOULD have been done is simply make the grants retroactive to Jan 1 2009 for all spending found to meet certain criteria. At least then some companies would have spent and taken the chance they would have been compensated.