ACA: Stimulus Unfair To Small Incumbents

By John Eggerton -- Multichannel News, 5/3/2010 12:01:00 AM

Washington — Small and medium-sized telecommunications and information service providers have been “effectively excluded” from the broadband stimulus program, thanks to rules that are unfair and unbalanced and a program that has been poorly run.

Meanwhile, cable’s “overbuilding” rivals have been given government grants to provide broadband service in competition to those operators.

Wave Broadband chief operating officer Steve Friedman, chairman of independent cable group the American Cable Association, made those claims in a broadband oversight hearing before the U.S. Senate Committee on Small Business & Entrepreneurship last week.

While the broadband-stimulus grant programs administered by the National Telecommunications & Information Administration and Rural Utilities Service are well-meaning, they are “poorly developed and implemented” and should have been directed to unserved areas, Friedman said in prepared testimony.

He cited three examples in which ACA members were in line to be overbuilt with grant or loan money from the program. He urged the the agencies to review and modify all proposals of all first-round awardees to ensure that no funding will be used to overbuild existing Internet access providers and then concentrate in the second round on providing loans and grants “to the truly unserved areas of the country.”

The NTIA just finished handing out grants for its first of two rounds of bidding, and is currently vetting the second round.

Reforms the ACA would like to see include changes to set-top and pole-attachment rules.

NTIA administrator Larry Strickling said he had heard the criticisms and said he did not think they were “serious objections.”

Strickling said NTIA focuses on where it could bring the most benefits, including underserved as well as unserved areas. “An underserved area by defi nition is an area that has a certain amount of service,” he said.

The NTIA also looks to see how widespread broadband service is and what speeds are offered, he said. “Many places that may see fairly slow consumer speeds may not be providing the high-speed Internet that the anchor institutions like the schools and the hospitals and the government facilities need,” he said.