TMCnews Featured Article

September 30, 2009

$7.2 Billion in Broadband Stimulus Funding Pales beside What's Needed

By Michael Dinan, TMCnet Editor

A task force of the Federal Communications Commission this week reportedly said it’ll take as much as $350 billion in infrastructure upgrades to effectively expand broadband usage throughout the United States.


John Poirier of Reuters (News - Alert) is reporting that the panel – whose full report on the broadband stimulus plan is due in February – is calling for investments ranging up as high as $350 billion for landline and wireless infrastructure in order to deliver broadband Internet capabilities to rural and urban areas. The full report is expected to go to Congress in mid-February.


“The report, which reflects information from dozens of workshops, did not provide initial recommendations,” Poirier said. “Panel members said they are still collecting data and studying how consumers are affected. It is expected to issue recommendations in the final report. The potential costs for investment dwarfs the $7.2 billion set aside in President Barack Obama’s massive economic stimulus package. The panel said transferring the universal services fund collected for traditional phone calls for broadband usage will not suffice.”


“Dwarfs” is right. Even the low end of the panel’s findings call for at least $20 billion.


The announcement comes as officials with the federal agency that will oversee broadband stimulus fund distribution announced that they’re expecting to award funds in early November to the first of two rounds of applicants.


As TMCnet reported, an Englewood, Colo.-based company that specializes in digital TV entertainment, set-top boxes, and end-to-end video delivery systems reportedly has emerged as the largest single applicant, after putting in for an ambitious broadband stimulus package that seeks $483 million funds.
According to Greg Avery of the Denver Business Journal, EchoStar Corp. is joining Carlsbad, Calif.-based ViaSat (News - Alert) Inc. in one of at least three projects in which EchoStar is involved, seeking a total $1.1 billion-plus in stimulus money. That would make make EchoStar the largest single applicant for the broadband stimulus funds.
“EchoStar and ViaSat would invest between $36 million and $114 million toward the satellite, depending on how much in stimulus money they win, if any,” Avery reported. “The project is estimated to cost $519 million. The satellite would provide download speeds of up to 8 megabits per second in all or parts of 20 states west of the Mississippi River, including Colorado.”
That might make it seem as though most the United States has no Internet service – but that’s not true, according to the FCC (News - Alert) panel. In fact, most U.S. residents have Internet service, and one-third have access to broadband but have not subscribed, while another 4 percent have no access.


Yet, as Poirier reports, the panel says that those with broadband are receiving slower speeds than what is being advertised, and speeds lag by at least 50 percent during busy hours.


“It is actual speed we should be thinking of,” Shawn Hoy, a business analyst for applications on the task force, reportedly said at an open meeting with FCC commissioners.


According to Poirier, the panel, which is trying to envision a broadband ecosystem one decade from now, “also said broadband usage for online videos and music is increasingly used on mobile devices and putting a strain on networks, driving a need among carriers for more spectrum to meet consumer demand.”


“Big wireless providers such as AT&T Inc, Verizon Wireless, Sprint Nextel Corp and T-Mobile (News - Alert) are seeking more spectrum as they roll out more sophisticated bandwidth-hogging smartphones such as Apple Inc’s popular iPhone,” Poirier reported.


Michael Dinan is a contributing editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To read more of Michael's articles, please visit his columnist page.

Edited by Michael Dinan