Policy

Cable’s Watching Stimulus Buildouts

10/04/2010 5:05 AM Eastern

Washington — The Commerce
and Agriculture departments
have allocated the last of
about $7 billion in broadbandstimulus
funds.

Now, cable operators will
watch to see whether that money
goes to overbuild their existing
operations.

The pool of available money,
tapped from the American Recovery
and Reinvestment Act of
2009 spigot to stimulate the economy
and create jobs, was some
$302 million less than originally
planned, after some funding was
rescinded to help pay for an emergency
education bill designed to
keep teachers on the job.

That seems fitting: As millions
of those broadband-stimulus
dollars will pay for Internet access,
computers and training for
schools, anchor institutions for
which the government was particularly
interested in obtaining
high-speed Internet access.

WHERE CONCERN LIES
The Commerce Department’s
National Telecommunications
Information Administration had
more of the money: About $4.4
billion for grants for broadband
deployment and adoption, with
about $300 million of that earmarked
for the broadband mapping
program and $100 million
to fund administrative costs.

Cable operators are more concerned
with the Agriculture Department’s
Rural Utilities Service,
which allocated $2.5 billion in
grants and loans.

The customer-facing buildouts
funded by the RUS are considered
more of a potential competitive
threat than the NTIA’s projects.
That’s because the NTIA is focusing
on middle-mile links,
rather than direct lastmile
service to consumers.

Cable says it’s fine with
the millions spent on
equipment and training
to promote adoption and
use.

It’s also OK with deployment
where there is
no business case for service,
and thus no existing
service.

“We have been pleased
with government efforts
to fund adoption programs
and public computing
centers, but we
remain concerned that
some of the money, particularly
on the RUS front,
has been inefficiently and
unfairly used to overbuild areas
where private providers are offering
broadband without government
assistance,” National
Cable & Telecommunications Association
vice president Brian Dietz
said.

Going forward, distributors
want to see better coordination
of various broadband programs
that have the potential of subsidizing
their competition.

The Federal Communications
Commission has a plan to migrate
Universal Service Fund (USF) subsidies
to broadband from wired
voice service. A separate legislative
initiative would do the same thing.

Both measures would target
deployment to unserved and underserved
areas. The cable industry
wants the government to
gain a “common understanding
of where broadband is” to avoid
having federal and state broadband
efforts overlap.

Other keys:
• Defining what “served with
broadband” means across the different
programs;
• Whether satellite-delivered
broadband counts;
• Which speeds or price points
figure into the equation;
• Whether partially served areas
can be overbuilt in order to
reached underserved or unserved
regions, as has happened in the
past, according to cable operators.

The NTIA said it will monitor
how the grants are being administered,
assistant secretary
for communications and information
and agency administrator
Lawrence E. Strickling said.
Grant recipients must file periodic
reports on their progress,
which will be an opportunity for
NTIA to confirm those recipients
have stuck to their proposals.

The NTIA said infrastructuregrant
recipients must report network
build progress; agreements
with broadband wholesalers or
last-mile providers; the percentage
of completion of key milestones;
and retail and wholesale
services offered.

According to a person familiar
with the NTIA’s thinking, the
agency believes that a provider
that offers some level of service
somewhere in a project’s
proposed area is not disqualified
from funding. The provided service
might be too slow to support
anchor institutions or telemedicine
or public safety, for example.

FOLLOWUP PLANNED
RUS spokesman Bart Kendrick
said the agency was “pretty careful”
on the front end of the process,
sending out teams to followup
on overbuild complaints and
questions as grants were allocated
over the past year.

Cable operators have made hundreds
of such complaints, according
to the cable representative.

The RUS hasn’t paid out any
money yet, Kendrick noted,saying
that grant recipients must meet the
agency’s reporting and documentation
requirements before project
expenses are reimbursed.

The NTIA has given out some
of its grant money, but not all. A
spokesperson said the NTIA will
report more extensively on the
program in several weeks.

September