Huge demand far exceeds broadband grants

Broadband Fiber Optics
Broadband Fiber Optics

“Cash for Clunkers” isn’t the only economic stimulus program to attract a lot of takers: The federal government on Aug. 27 said it has received requests for nearly $28 billion from groups that want to expand high-speed internet service in the United States. The total requests outstripped available funds seven to one.

States, counties, Indian tribes, nonprofits, phone companies, libraries, colleges, universities, and others — 2,200 requests in all  — lined up in advance of the Aug. 20 deadline. The government has $4 billion in loans and grants initially available.

The money will be used to connect rural homes to the internet, stimulate interest in getting internet service among groups that don’t use it much, and expand internet access in public locations such as schools and libraries.

The bulk of the requests — representing $23.2 billion — are to build out internet lines in rural and underserved areas. Nearly $2.5 billion was requested for projects to provide broadband education, awareness, training, access, or support, especially among populations where broadband technology has been underused; and $1.9 billion was requested for public computer-center projects, which will expand access to broadband service at public libraries, community colleges, and other institutions.

The National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service will pick the winning applicants and announce them in November.

The American Recovery and Reinvestment Act directs NTIA to make at least $250 million available for programs that encourage sustainable adoption of broadband services, of which up to $150 million will be allocated in this first round of grants. The stimulus act directs the agency to make at least $200 million available for expanding the capacity of public computer centers, of which up to $50 million will be allocated in the first round.

Though competition appears stiff for the first round of financing, those who lose out will have two more rounds in which to compete before the money runs out. The stimulus allocated $7.2 billion in total funding for broadband projects. (Because some of this money will be used to fund loans, the total dollar amount handed out will be higher than that.)

It is the first time the federal government has made a concerted, large-scale effort to expand internet access to rural and underserved communities nationwide.

The largest phone and cable companies have shown little interest in participating in the program. Qwest Communications International, a phone company that covers vast, thinly populated areas in the West, said it couldn’t make a business case for applying.

“We are excited to see such strong interest in the NTIA’s broadband grant program,” said Ben Scott, policy director at the nonprofit Free Press. “This response to just the first round of grants demonstrates the substantial interest in bringing broadband to all Americans and increasing broadband adoption.”

Scott continued: “As expected, the large incumbent telephone and cable companies do not appear to have applied. But the volume of applicants has discredited complaints that interest in this grant program would be hurt by the nature of a public service/private enterprise partnership. The NTIA can now settle into the task of dispensing infrastructure grants to the best applicants, with the goal of maximizing the utility of our public-service broadband networks. We congratulate NTIA on the strong interest in this program and their efforts to improve broadband access.”

NTIA announced the demand for broadband stimulus grants just two days after a report from the Communications Workers of America (CWA) suggested the United States ranks 28th in the world in average internet connection speeds and is not making significant progress in building a faster network.

The CWA report said the average download speed in South Korea is 20.4 megabits per second (Mbps)–four times faster than the U.S. average of 5.1 Mbps. Japan trails South Korea with an average of 15.8 Mbps, followed by Sweden at 12.8 Mbps and the Netherlands at 11.0 Mbps, the report said, adding that tests conducted by found the average U.S. download speed had improved by only nine-tenths of a megabit per second between 2008 and 2009.

“The U.S. has not made significant improvement in the speeds at which residents connect to the internet,” the report concluded. “Our nation continues to fall far behind other countries.” (See “Report: U.S. ranks 28th in internet connection speed.”)

In the coming weeks, NTIA will post a searchable online database containing summaries of all applications received, the agency said.


National Telecommunications and Information Administration

Broadband USA (the portal through which to apply for broadband stimulus funding)

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