Broadband Stimulus: Pitfalls and Successes

Written by Kelly
February 19, 2010

Is the broadband stimulus doing what it's supposed to do, like jumpstarting the economy? Even industry insiders aren't completely sure yet.

The $7.2 billion broadband stimulus is supposed to create jobs and turn the United States into one of the most-connected nations. But is it achieving those aims? xchange rounded up executives from four companies active in the stimulus efforts to share their take on the issues.

You’ll hear from WiMAX provider DigitalBridge Communications, a 4G operator hoping to build into new areas with stimulus grants. There’s also rural LEC Windstream Corp. (WIN), which wants to expand its reach through stimulus funds, too. Then there’s Mid-Atlantic Broadband Cooperative (MBC), an entity comprised of service providers, utilities, educational institutions and other members that’s already has landed some stimulus money – $16 million, in fact. And finally, there’s Qwest Communications International Inc. (Q), which like its Bell peers, chose not to vie for grants and loans available in the first round of broadband stimulus funding because it didn’t care for the rules. But the guidelines for the second stage reportedly have the carrier re-thinking its position.

With that in mind, here are William Wallace of DigitalBridge, Mike Rhoda of Windstream, Tad Deriso of MBC and Steve Davis of Qwest.

How – or not – is the broadband stimulus fulfilling the No. 1 aim of creating jobs? And why (or why not)?

William Wallace, co-founder and executive vice president, DigitalBridge: In Round 1, DigitalBridge provided estimates of the new employees it would hire if it were successful. We provided estimates in the categories of network jobs, sales and marketing jobs, and customer care jobs. In Round 2, there is an explicit request for a commitment to the number of jobs that will be created. So, I believe the stimulus program will ultimately help to create jobs.

Mike Rhoda, senior vice president of government affairs, Windstream: With regard to the broadband provisions in the Recovery Act, the goal was to generate economic activity through improved broadband access and connections. Congress’ specific focus was on unserved and underserved Americans. Broadband funding will have the most significant impact where the spend delivers broadband to homes and businesses that had no broadband access previously. When the stimulus funding is used to deploy fiber middle-mile networks where fiber middle-mile networks already exist, the desired impact will be minimal. Unfortunately, we have seen tens of millions being awarded for the latter, with much smaller amounts on the former. It appears that Round 2 could tilt even more in that direction. Aside from the minimal job creation associated with such redundant projects, it is difficult to see how the grants conform to Congress’ objective of reaching the unserved or underserved.

Tad Deriso, president and CEO, Mid-Atlantic Broadband Cooperative (MBC): The Mid-Atlantic Broadband Cooperative (MBC) just received a $16 million NTIA grant that is a direct result of the broadband stimulus program. In addition to providing fiber optic connectivity for 121 K-12 schools in southern Virginia, the grant will bring an estimated 75 jobs to the region. Those jobs would not have been possible without this funding.

To read the rest of this full, in-depth article at our sister site, xchange, click here or on the source link below.