Applying the stimulus

It's too early for any of the money earmarked for broadband development in the Obama administration's economic stimulus package to have been spent. But the stimulus package already has succeeding in sparking broadband-related activity—at least in the form of speculation about how the money will be spent.

As you undoubtedly know by now, the stimulus plan signed last month includes $7.2 billion for broadband services development. The National Telecommunications and Information Administration (NTIA), part of the Department of Commerce, will administer the lion's share of the funds, $4.7 billion, to carry out what the bill termed the “Broadband Technology Opportunities Program.” A further $2.5 billion will fall under the Department of Agriculture's purview, specifically the Rural Utilities Service (RUS). In addition, the Federal Communications Commission (FCC) has been given a year to create a national broadband plan that will include “an analysis of the most effective and efficient mechanisms for ensuring broadband access by all people of the United States.”

The plan aims for quick impact. The cabinet departments must earmark their funds by the end of fiscal year 2010, and the projects chosen must be “substantially complete” no longer than two years later. However, it doesn't spell out what “broadband” means, other than directing, in the case of the NTIA funds, that the Assistant Secretary for Communications and Information assess whether the projects funded will “provide the greatest broadband speed possible to the greatest population of users in the area.”

The lack of a speed benchmark opens an opportunity for projects with any and every medium currently available. Thus, proponents of DOCSIS-based hybrid fiber/coax technologies, DSL, wireless, and broadband over power line have joined the fiber-optic community in polishing their business cases.

The plan places emphasis on meeting the needs of rural and other underserved areas. Congress added an interesting wrinkle to the RUS funds in that it directs that projects that afford users a choice of service provider should receive priority. This would appear to limit the attractiveness of such projects to the major incumbents, who didn't dive into FTTH/N deployments until the FCC ruled that they wouldn't have to share their infrastructure. This directive also would appear to boost open access networks such as UTOPIA and similar municipal programs.

Economic development for rural and low-income areas represents one of the major goals of the broadband plans. Networks that can support only a few megabits per second per user won't hit this target. In developing the national broadband plan—a plan I expect will influence at least some of the funding decisions that NTIA and RUS will make—the FCC must take into account that even the most rural parts of the United States must be in position to compete in a global economy. Multi-megabit networking (heck, gigabit networking) is quickly becoming table stakes in business today. And fiber-optic technology is clearly the right card to play.

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

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