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4/10/2009
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Broadband Players Vie For Stimulus Funds

With more than $7 billion up for grabs, there's no shortage of parties looking to cash in.

The federal government plans to spend $7.2 billion in stimulus funds to expand broadband access -- not surprisingly, there's plenty of debate over where the money should go.

President Obama approved the spending through the American Recovery and Reinvestment Act and urged agencies to move as quickly as possible to put the funds to use. The Federal Communications Commission must still come up with definitions and parameters that will help determine allocations.

The National Telecommunications and Information Administration and the Department of Agriculture must also draft guidelines for the types of projects they will fund, while adhering to government rules that require waiting periods for public input. Eligibility guidelines will be released within two months, and officials said they hope to release the first of three portions of the funds by summer.

Last month, the FCC, the NTIA, and the Agriculture Department issued public notices seeking input until April 13 and held a series of hearings on the issue. Bart Forbes, public affairs officer for the NTIA, said that about 3,000 people had responded by April 3. Forbes said he could not provide any details about the NTIA's plans for spending about $4.7 billion or the direction it will take because it's too early in the process.

An official with the Department of Agriculture's Rural Utilities Service indicated that broadband programs created with its $2.5 billion in stimulus funds would likely be open to a wider variety of groups than those funded through existing programs.

Carly Fiorina, former Hewlett-Packard CEO and current chair of the board of directors for the Technology Policy Institute, said in a conference call with reporters that she finds it encouraging that Congress is spending substantial amounts of money on broadband infrastructure.

"We know from experience that simply throwing money at technology is not a solution," she said. "We should think about spending it wisely and making sure we actually achieve the goal, which is that we have 21st century infrastructure."

The FCC has given every indication that it will stress the importance of allowing competition and the need for carriers to manage traffic neutrally, regardless of the content or its source. Several large telecommunications companies oppose such "network neutrality" provisions, saying it goes against free-market principles and hampers their ability to raise money for expansion.

Despite rumors that Verizon and AT&T may not participate in stimulus programs because of potential restrictions and requirements, a Verizon spokesman indicated that his company has not made a decision yet.

"Whether we participate in a specific government program or not, our intent is to do our part, and to work cooperatively with governments, nonprofits, and others to ensure that next-generation ultrafast and mobile broadband become ubiquitous," he said.

Either way, "Verizon is playing a significant role in stimulating the economy and deploying broadband," he said.

Verizon has invested $50 billion in technology infrastructure in three years, first through its high-speed FiOS network and now through developing a new 4G wireless LTE network. FiOS served 13 million homes last year.

If Verizon does apply for funds, it's more likely to go through the NTIA, which is likely to offer matching grants. Even if the Department of Agriculture favors prior grant recipients and Verizon would not qualify, large carriers such as Verizon could benefit from those funds if they're asked to lay the infrastructure for smaller providers.

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