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Geoff Daily

App-Rising.com covers the development and adoption of broadband applications, the deployment of and need for broadband networks, and the demands placed on policy to adapt to the revolutionary opportunities made possible by the Internet.

App-Rising.com is written by Geoff Daily, a DC-based technology journalist, broadband activist, marketing consultant, and Internet entrepreneur.

App-Rising.com is supported in part by AT&T;, however all views and opinions expressed herein are solely my own.

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January 26, 2009 8:19 AM

A Comprehensive, Pragmatic Rural Broadband Stimulus Package

To date the reactions I've seen to the rural broadband portion of the economic stimulus package have ranged from mild satisfaction to mild dissatisfaction.

Those who like it are glad to see open access provisions and appreciate the sense that this won't just be another government handout.

Those who don't either think it's not big enough, it's too big, or it won't work fast enough to create jobs and stimulate the economy.

But what's disappointed me about all this is the general lack of effort being put forth to discuss if there could be a better way to accomplish our goals than what's been laid out so far. All I've seen on this is nothing more than companies and interest groups continuing to push their now-weeks-old plans that quite frankly are no longer relevant.

The new administration and Congress have set pretty clear parameters as to what the economic stimulus package is going to focus on with regards to broadband. So talking about what could've been is not nearly as important right now as helping insure that whatever can and does pass actually works well.

So let's unpack what a broadband stimulus package should do and then see if we can craft a new policy framework that takes a more comprehensive approach towards bringing world-class broadband to rural America.


My take on what a broadband stimulus package must do is simple:

- Spur deployment of networks
- Create jobs
- Provide long-term value
- Work as quickly as possible

With this in mind, the first thing I'd do is identify if there is any backlog of shovel-ready projects that policy can help get moving. These are the projects that can start deploying and creating jobs most quickly, in weeks rather than months or years, so this would be my number one priority.

The second thing I'd do is put resources into the hands of communities so they can start determining their own fate now rather than waiting for higher levels of government and industry to make decisions for them. Empowering communities that already know what they want but need a little help getting the ball rolling is essential if we want to build momentum that can sweep across all of rural America.

The third thing is make a big pot of money available to anyone willing to bring broadband to the unserved as quickly as possible.

The fourth thing is to provide a mechanism whereby competition can still be encouraged so wherever possible we don't invite the establishment of monopoly providers.

And the fifth thing is to start writing checks to get all education, healthcare, and government facilities wired together as we can't afford to have any of these vital institutions not online.

So with these thoughts in mind, let's consider a specific policy framework that can accomplish all these goals in a comprehensive manner.

Framework for a Comprehensive, Pragmatic Rural Broadband Stimulus Package

Size: $10 billion
(I've argued before that 10% of all stimulus dollars going into infrastructure should be spent on broadband. With $140 billion currently slated for infrastructure, a bump up from $6 billion to $10 billion is the least we can do for rural America.)

Structure: A five-pronged approach to spurring deployment

Fast-track partial loan guarantees for full fiber networks - Everyone agrees that full fiber networks are the gold standard for broadband. There's a bigger backlog of shovel-ready rural fiber projects caught in the credit crunch than any other form of broadband. By making these guarantees available we'll loosen up capital, and by not relying on government handouts we'll require these fiber networks to prove their financial viability to the private capital markets. In this way we can bring world-class broadband to huge swathes of rural America and start creating jobs immediately. ($1 billion, RUS)

Matching grants to communities without fiber for preplanning costs - We have to give communities a chance to determine their own future, and we should be rewarding those communities that are ready to move forward aggressively into that future. By providing these matching grants we'll empower communities to organize and either attract private providers or put in motion plans to build their own networks. ($1 billion, RUS)

No-interest loans for projects bringing broadband to unserved areas - If a community doesn't have any broadband we need to move with all haste to get them connected, even if it's only with the broadband of today and not tomorrow. We make this money available, set parameters around which projects are eligible (like any project that at least half of which is bringing 3Mbps down/1Mbps up to unserved areas), and let the marketplace fight over who gets government support to deploy to these areas. ($2.65 billion, RUS)

Competitive tax credits - We want to avoid establishing monopolies and spur the deployment of all broadband technologies wherever possible, so these tax credits would be available to any company bringing 5Mbps down/1Mbps up service to communities that don't already have those speeds, as well as any company bringing 45Mbps/15Mbps service to any rural community. ($2 billion, NTIA)

State-prioritized grants to connect education/healthcare/government facilities - States should have the best sense for where there are schools, hospitals, libraries, and other government facilities with inadequate connectivity. Allow them to identify those areas and then have government step in to make sure these vital institutions get connected. Particular emphasis could be put on projects that touch the greatest number of users. And grants could be rewarded through a competitive bidding process where private providers try to come up with the best ways to leverage existing assets to get these networks built quickly and cheaply. ($3 billion, NTIA)

Mapping of broadband availability and adoption - I've got no complaints about funding these efforts but we should make sure the data we collect is comprehensive. For availability that includes price, speed, and reliability. For adoption that includes not just how many people but also how are they actually using it. ($350 million, FCC)


By taking this more comprehensive approach towards stimulating rural broadband deployment we can bring the fastest speeds in the most expedient manner while maximizing the impact of government dollars.

So what do you think? Are there any other ways we could improve upon the policy proposals that have come out of DC? If you have any thoughts add them as a comment below!

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Comments (1)

Don't forget wireless. Advances in wireless will continue (especially with new TV white spaces opening up) and for many end points (including small towns) wireless will be a better choice - Best choices are made in the present considering all factors - careful not to favor fiber optics over wireless.

Example: Cell phones aren't the gold standard of voice quality compared to land line, right? But often many choose cell phones after considering all the factors that matter to the user.

Competition is the proven path to lower costs and higher performance. Compare local phone service to long distance.

Utility model might well work in some areas. Consider electric and water networks to telephone networks. What is your monthly cost for each? Which one would you do without for a week? (and the water system includes a removal system -sewer- and often it is so cheap most of you will have no idea the cost of a gallon of tap water).

Posted by Brandon Fouts on January 29, 2009 1:38 PM

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