Coming: $7.2B for broadband, Internet access

The economic stimulus package President Barack Obama signed into law last week allots $7.2 billion for expanding broadband connections to underserved areas.

Under the American Recovery and Reinvestment Act of 2009 (ARRA), the Agriculture Department’s Rural Utilities Service will dispense $2.5 billion, but the bulk of the funds — $4.7 billion — will go to the Commerce Department for disbursement.

The assistant secretary of Commerce for Communications and Information and the Federal Communications Commission will establish the Broadband Technology Opportunities Program and ensure that it doesn’t conflict with other federal broadband initiatives and that every state receives at least one grant.

To expand broadband service to rural and underserved areas, ARRA also charges Commerce with providing support, training and equipment to schools, libraries, medical and health care providers, colleges, and other community organizations. It also stresses support for job-creating facilities and public safety agencies.

FCC’s National Telecommunications and Information Administration will dole out $84 million in grants by October and $756 million in fiscal 2010. The lion’s share of the grant money — about $2.5 billion — will be spent in 2012 and 2013, with remaining funds to be dispensed by the end of fiscal 2015.

Anna Gomez, deputy administrator at NTIA and deputy assistant secretary for communications and information at Commerce, has held the post only since Feb. 3, but she is well-versed in the agency’s mission and history. Although most recently vice president of government affairs at Sprint Nextel, Gomez worked at FCC for several years, including a stint as deputy chief of the International Bureau. Because she was not registered as a lobbyist, she was not subject to Obama’s ban on hiring lobbyists to oversee issues they had previously worked to influence.

Of the USDA’s $2.5 billion for broadband spending, ARRA specifies that at least 75 percent of any area that receives stimulus grant money must lack sufficient broadband service “to facilitate rural economic development as determined by the secretary of Agriculture.”

The Congressional Budget Office estimates that USDA will have $63 million to spend in fiscal 2009 and $350 million in fiscal 2010. Spending will peak at $587 million in fiscal 2011 and decrease in the following years until finishing at $125 million in fiscal 2015.

The quickest way to get the broadband money spent in rural and underserved areas would be to immediately issue a request for proposals for service to areas where no broadband service exists, said Robert Atkinson, president of the Information Technology and Innovation Foundation.

First out of the gate is not one of the big telecommunications or cable companies but IBM Corp. The company said it and International Broadband Electric Communications Inc. (IBEC) have begun establishing broadband-over-power-line (BPL) networks for nearly 200,000 rural customers in Alabama, Indiana, Michigan and Virginia.

BPL works by modifying radio signals to send voice and Internet data via electric utility power lines. Users access the service via modem.

The project is funded by low-interest Rural Broadband Access Loans from USDA, but IBM and IBEC officials also hope to tap ARRA funds, according to a report from Reuters.

About the Author

Sami Lais is a special contributor to Washington Technology.

Reader Comments

Wed, Feb 25, 2009

Fail to see what value IBM is adding here. Shouldn't it be the power companies receiving the stimulus funds to adapt their lines to this technology?

Tue, Feb 24, 2009

Stimulus money should go to companies willing to hire American contractors, temps and permanents or willing to sign an agreement they will not lay an American anyone off for xx years. Without an agreement like that, global companies like IBM will bring cheaper oversea workers to America, pay them with our taxpayer money to do the work and in turn increase their profits. The foreign workers then send their paychecks back home to their families which isn't going to help our economy.

Tue, Feb 24, 2009

I ABSOLUTELY AGREE WITH THIS STATEMENT: Not one penny of the stimulus should go to any company offshoring jobs and hiring HB1 workers while laying off American workers. The stimulus is for AMERICA's economy - not India's.

Tue, Feb 24, 2009 Bill

The National Telecommunicatiosn Administration is part of the Department of Commerce not the FCC.

Tue, Feb 24, 2009 john mason Nashville

This country grew with rural free delivery of mail--a single stamp can carry your first class mail anywhere--so it's way overdue for broadband. We're years behind Europe I hear.

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