Tough Decisions Ahead on Rules for New Broadband Program
The law creating a $7.2 billion broadband program delegates many important decisions to the government agencies charged with spending the money, panelists said Thursday at a Georgetown University seminar. The law, written in haste in response to the economic crisis, leaves it to agencies to decide who has priority for grants and to set Internet speed benchmarks for grant recipients. “We have a lot more work to do,” said FCC Chief Technologist Jon Peha. But the law gives agencies flexibility, “which is a great advantage when you are trying to do something hard,” he said.
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With that flexibility comes the challenge of tackling tough problems, such as spelling out network nondiscrimination rules. “Brutal battles” could be ahead on that subject, he said. “We have to figure what is broadband, and we need to evaluate our existing infrastructure.” The NTIA will need to define what constitutes an underserved versus unserved area. All of this must be finished while policymakers are still working on a national broadband policy. “Defining that policy will not be an easy task,” Peha said.
The Obama administration’s new Web site, www.recovery.org, could help coordinate interagency activities, while providing the public a chance to see how dollars are spent, said Stifel Nicolaus analyst Blair Levin. He was an adviser to the Obama transition team. The centralized data-collection site will allow policymakers to catch program missteps and correct them early in the process, he said. “Some of these funds are not going to flow as you hope,” he said. “It’s inevitable on any project.” But providing a way to track spending can hold down problems before it’s too late to make changes.
Starting March 3, agencies will be required to submit weekly update reports on what they're doing to get spending done, said an Office of Management and Budget memo posted on the site. Beginning April 6, agencies must post specific spending data, “on a cumulative, year-to-date basis.” The posts must link to contract and financial assistance solicitations through the Federal Opportunities Web site, www.fbo.gov, and www.grants.gov.
Recovery.gov is meant as a portal allowing users to search for spending information by agency. It promises to show which states and congressional districts get money and to identify contractors that win business. Individual government agencies are encouraged to link to the site and dedicate a section of their primary Web sites to the Recovery Act “within a week.”
Agencies should focus efforts on channeling loans to unserved areas, NCTA Vice President Rick Cimerman told the Georgetown panel. It shouldn’t be too difficult to decide what an unserved area is, he said. Defining “underserved” will be more challenging. Setting speed benchmarks also will be tricky. He recommended setting speeds that encourage providers to go into new areas or to upgrade service, but not to set speeds so high that they would curtail grant eligibility to only one or two companies. He also urged the government to make use of a $250 million in grants to encourage people to use broadband services. Finally, he urged that there be no “burdensome regulations” imposed on would-be grant recipients.
The wireless industry hopes policymakers won’t set speed requirements that bar its ability to qualify for grants, said Carolyn Brandon, CTIA vice president of policy. “We think the money can go out in a way that involved many different providers.” As for defining network non-discrimination, Brandon said she thinks the Obama administration has a plan, and that there could be “quick resolution.” But “that doesn’t mean all stakeholders will agree with what is put on the table.”
Grants should be allocated to encourage projects that would not happen otherwise, said Scott Wallsten, senior policy fellow at Georgetown’s Center for Business & Public Policy. Others agreed. But the law’s overall intent to create jobs muddies the waters a bit, because there is a difference between funding a construction or infrastructure project, and upgrading existing facilities to faster speeds by buying new equipment. The latter effort could lead to better broadband and higher productivity, but might not immediately create jobs. “There is a tension between the objectives,” Wallsten said. “You can be sure to get jobs if you fund a ‘ditch to nowhere,’ but that doesn’t do anything for broadband,” he said, a reference to an infamous appropriation for an Alaskan bridge project.