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Broadband Stimulus May Disappoint Thousands

The ball might finally get rolling tomorrow for the $7.2 billion in broadband stimulus funds, not a moment too soon where operators and Internet-starved rural communities are concerned.

Worse, though, than the fact that many projects won't actually get started until the spring of 2010, is the number of groups and communities that are going to come away from the process empty handed and potentially discouraged.

"There's going to be some folks spurned at the wireless stimulus altar," broadband business strategist Craig Settles told me.

As an example of the odds of getting one of these grants, Settles said there are 40 different groups representing several hundred communities in Illinois, each of whom will get 3 minutes to present their broadband plans to a state committee that will recommend projects to the federal agencies charged with doling out the dough. Bearing in mind that according to the funding bill, every state is entitled to a portion of the money, that could leave as little as $150 million per state, meaning a lot of these plans are simply not going to get funded. That's why "you have to plan not to win."

Groups that raise unrealistic expectations among constituents and then fail to get federal funding could end up with worthwhile projects stopped dead in their tracks. "It's hard to be the voice of reason," Settles chuckled of his role as Debbie Downer.

One group that hasn't put all its eggs in the broadband stimulus package is Open Cape, which is working to bring broadband to under-served areas on Cape Cod. It plans to apply for stimulus money, but has other ways of raising funds in case that falls through. "The stimulus is an alternative, not the be-all and end-all" for this group, Settles said.

The Federal Communications Commission (FCC) and the National Telecommunications and Information Administration (NTIA) are expected to publish their "Notice of Funds Availability (NOFA)," tomorrow, which includes the rules for applying for the grants and conditions (like non-discrimination) with which a grantee much comply.

Settles, who told me he heard that the FCC has extended the public comment period on national broadband strategy by two weeks, said he wouldn't be surprised if the FCC also delayed publication of the NOFA -- given that its new chairman, Julius Genachowski, was just confirmed last week and he "might want to read them before they go out."

In any case, funds won't be disbursed until December, and given that the ground is too hard for digging in the winter, many projects will have to wait for the spring thaw to get going.

Here's hoping that the inevitable bruised feelings will have also had time to thaw, and that worthwhile broadband projects will go forward under their own steam.

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