So far, so good

The U.S. Department of Commerce’s National Telecommunications and Information Administration and the Department of Agriculture’s Rural Utilities Service (RUS) have finally begun to dole out the $7.2 billion set aside by the American Recovery and Reinvestment Act for broadband grant and loan programs. So far those who fretted that fiber projects would fight for pennies while the lion’s share went toward building WiMAX networks or propping up antiquated DSL infrastructure have worried needlessly. In fact, of the 14 grants the RUS most recently announced, fiber served as the technological foundation for 11, according to the Fiber to the Home Council.

It’s tempting to proclaim the stimulus program a watershed moment for the technology—the point in history when its superior capabilities for broadband service provision were recognized not only by telecom insiders but by the U.S. government as well. However, I think it’s a bit premature to proclaim victory.

First, while hundreds of millions have dollars have been awarded so far, they represent well less than half of the funds available. The next round of announcements could focus on a completely different technology (with wireless serving as the most likely money magnet) as sharply as the early ones have highlighted fiber. Second, the rules for the final round have been announced, and the RUS has declared that a certain percentage will be set aside for satellite-based projects. We could discover that the first tranche focused on one set of fiber-friendly projects and the second will go elsewhere.

Still, we can probably say a few things with confidence that bode well for fiber’s prospects in future rounds. Middle-mile projects have received a steady stream of funding so far, and nearly all have been fiber-based. Vendors who have helped formulate some of the stimulus funding proposals indicate that this trend should continue. Also, even if the total allotments for each technological option begin to even out, the flow of money to optical projects shouldn’t stop.

No, it’s too early for fiber proponents to claim complete vindication. But so far, momentum is in their favor.

Stephen M. Hardy
Editorial Director
& Associate Publisher
stephenh@pennwell.com

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