Stimulus fun has just begun

The broadband stimulus funding plan of about $7.2 billion accounts for less than 1 percent of the overall $787 billion national economic stimulus package. However, when it comes to allocating and spending all those billions of stimulus dollars, do not expect broadband activity to shrink into the background. How the broadband money is put to use ultimately will be one of the most closely-watched aspects of stimulus spending, largely because it remains one of the most controversial areas.

Though details of how the money will be allocated, spent and monitored remain sketchy, the broadband stimulus fund already is generating controversy for how it is being split between agencies affiliated with the U.S. Department of Commerce and the U.S. Department of Agriculture. Many industry watchers preferred a stimulus package more organized under a single entity--the Commerce Department--rather than two separate departments, and some have alluded to the Agriculture Department's legacy of mismanagement allegations as reason why that department should not have control over any of the funds (It will have about $2.5 billion of the total $7.2 billion under its roof).

Also unclear is how many rural service providers will be able to access the funds, assuming they don't retain grant writers and legal teams that can help them. In addition, some small telcos that are essentially sole proprietorships may not be able to gain access to funds without incorporating.

Meanwhile, because bandwidth speed requirements were yanked from the stimulus plans, U.S. broadband service providers are left without goals or minimum baselines for what constitutes broadband. The government likely will have to offer guidance on this, even as stimulus funds are being used to create a better database of information about where broadband penetration stands.

Such an open issue may require a level of unprecedented--or at least long-absent--government involvement in the telecom industry. Broadband arguably has succeeded in other countries more rapidly than in the U.S. for exactly that reason--that government guidance on broadband principles and goals in those countries has been strong.

Yet, there's also another element of ongoing criticism with which to contend: Some people still feel there is no need for broadband stimulus at all, only more forceful government guidance to drive issues such as ubiquitous broadband availability and balanced treatment of all Internet traffic.

In any case, a new broadband day is dawning. It may be what many in the industry wished for, but as a whole cadre of uncertain issues plays out, we may find broadband stimulus to be a rapidly-evolving animal, and ultimately a different one than we expected.

-Dan [1]