Broadband Stimulus : Getting Dumped On?

Broadband Stimulus: Getting Dumped On?

Posted by Sam Churchill on January 28th, 2009

Business Week explains, Why the Stimulus Bill Discounts Broadband

When the House unveiled a preliminary version of the economic stimulus plan, crafted with some input from President Obama’s advisers, the amount of money allocated for broadband Internet development was much lower than experts had anticipated.

In the $825 billion proposal, only $6 billion was aimed at broadband, far short of the $12 billion to $30 billion that industry experts estimate it would cost to wire the nation. The House bill allocated the same amount of money to weatherizing the homes of low- and moderate-income people.

The stimulus proposal still has to make its way through the Senate and may be changed substantially before it’s signed by the President. But many in the tech industry are contemplating some tough questions: Why did broadband get slighted? Will the technology get more government funding in the future?

Blair Levin, a former senior official at the Federal Communications Commission, was a top technology policy adviser on the Obama transition team. In an interview with BusinessWeek, he says that more money could be allocated to broadband in the future. “Did we leave the door open to additional money?” asked Levin. “I think the answer is the door is open and should be open.”

Levin and other technology leaders say there are several reasons that broadband got less money than expected in the stimulus bill. For starters, there is no track record of the federal government funding broadband networks. That made it harder to garner support for a larger subsidy in a Congress trying to accommodate numerous claims from more established constituencies.

“When it comes to building roads, that is a clear government project,” says Levin. “Building rural broadband is clear, too. But with other parts of broadband there is not a consensus.”

There’s also an information gap. There are no clear, comprehensive data on which regions need broadband investment, which fueled concerns that it would be difficult to spend money quickly and wisely. “We were concerned that the money would be used effectively and appropriately,” says Levin. “You have to have the strategy before you determine where the money is sent.”

Then there were economic questions. Some economists have noted that compared with some other infrastructure projects, such as road or bridge construction, broadband construction would not generate as many jobs. It takes many more people to build a four-lane highway than to dig a trench and lay a fiber-optic cable.

A report by the Information Technology & Innovation Foundation (above), a research institute in Washington designed to promote the tech industry, supports this theory. The January 2009 report estimated that a $10 billion investment in building broadband networks would directly create only 64,000 jobs.

In Japan, speed sells, notes Light Reading.

Jupiter Telecommunications (above), Japan’s largest cable operator, features a Docsis 3.0-powered “Net Ultra” tier with downstream bursts of up to 160 Mbit/s, for only 6,000 yen (US$66.78) per month.

Verizon’s FiOS fiber internet access costs $140/mo for 50 Mbps.

Comcast sells its wideband “Xtreme” tier (50 Mbit/s down by 10 Mbit/s up) for about $140 per month while their “Ultra”, offering up to 22 Mbps of downstream speed and up to 5 Mbps of upstream speed at $62.95/month. The business-class version runs $189.95. Not exactly a bargain, says Light Reading.

Brian Roberts, CEO of Comcast, is trying to get respect, says Wired Magazine, in a detailed profile of Roberts. The 49-year-old turned his father’s middling cable TV company into a media behemoth with $31 billion in annual revenue. But few companies have a worse reputation.

AT&T and T-Mobile have both targeted 2010 for LTE deployment, the carriers said at the Alliance for Telecommunications Industry Solutions, an LTE conference.

source : dailywireless.org