House Proposes $6 Billion for Broadband, but Details Sketchy

The bill would create a new broadband grant program at NTIA with $2.8 billion in funding, of which $1 billion would be reserved for wireless deployment grants and $1.8 billion for broadband deployment. Grants could be made to rural, urban or suburban areas. The legislation calls for NTIA to maintain a Web site tracking grants and the status of applications. Wireless grants would go to providers offering advanced services. The Agriculture Department’s rural broadband program would get $2.8 billion in grants and loans targeted specifically at underserved areas.

The Senate is working on its own stimulus package and its draft could call for up to $8 billion for broadband, according to lobbyists and analysts following the issue. Separately, Rep. Anna Eshoo, D-Calif., is working on legislation calling for $10 billion in broadband bonds, according to a copy of her bill. The bonds would facilitate public-private partnerships to build infrastructure for advanced broadband services.

The Wireless Communications Association praised inclusion of wireless broadband funding, said a statement from WCA President Fred Campbell. “As the only broadband platform that is capable of providing access everywhere, all the time, wireless broadband is essential to achieving universal broadband connectivity,” he said. The proposed investment will pay off in increased productivity and innovation, he said.

Stifel Nicolaus analysts said the stimulus bill would likely help equipment providers more than large telecom incumbents. “We stress that the legislative situation remains highly fluid and many key elements are still undefined,” a report said. Yet to be spelled out are what speeds would qualify for grant and loan eligibility. “This will be key. Public interest groups and some larger companies are advocating wireline speeds of 100/20 Mbps down/up. We believe this could exclude AT&T and some cable companies, and others are urging speeds in the range of 10-50 Mbps down.” The report said “qualifying” wireless broadband speeds being discussed are on the order of 10/2 Mbps down/up, which could exclude Clearwire. “The speeds that are ultimately chosen as qualifying will determine who falls outside the benefit of the grants,” the report said. “One possible approach that we believe some are considering is a sliding scale, which would make more money eligible for faster speeds.”

Qwest praised the intent of the bill and “swift” action by House leaders, but said it needs to be focused more clearly on funneling money to truly rural areas. “We feel the program should be targeted only for bringing high-speed Internet service to unserved areas,” said Shirley Bloomfield, Qwest senior vice president. “Unserved areas can be quickly identified and the economic impact would be more beneficial than simply upgrading underserved areas that already have broadband service.”

The Open Internet Coalition said lawmakers should be vigilant as the bill advances in making sure that money goes toward “truly open and high speed Internet access,” said coalition Executive Director Markham Erickson. “Resources should be spent on creating high speed fiber networks. And funds should be prohibited for upgrades of existing equipment; priority should go to reach people who don’t have access to broadband currently, and who are not covered by pre-existing build-out plans.”

Free Press echoed the call for ensuring open networks as new investment advances. “While $6 billion is not as much as we had hoped for, it is a substantial investment that represents an important public commitment to broadband,” said Policy Director Ben Scott. The group sent letters to Congress Thursday urging that new spending be tied to a “single agency that can uphold clear principles of public service and enforce concrete administrative accountability.”