Broadband stimulus: Clarity is needed, say service providers

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Last week, Qwest and its RBOC brothers announced they would not apply for the first round of funding from the Obama administration's $7.2 billion broadband stimulus program. 

Qwest, whose 14-state territory spans a number of rural communities, has been the most vocal proponent of the Act to help extend broadband to so-called "underserved" areas. However, the Denver, Colo-based telco was concerned that the rules that define underserved communities was too restrictive.

Qwest's RBOC brothers (AT&T and Verizon), and Comcast echoed similar sentiments in a Washington Post article

These service providers believe they not only have the deep pockets to enhance their broadband networks, but if they did take the money they would be subject to strict requirements on how to use the money. Other service providers cried foul, saying the net neutrality rules tied to the grants would also compromise the way service providers manage the traffic that traverses their networks. 

In response, the National Telecommunications and Information Administration (NTIA) and the U.S. Department of Commerce's Rural Utilities Service, which are doling out the initial $4 billion in grants and loans, said they will go back and look at the rules after the first round of funding is done and consider changing them for the remaining $3.2 billion funding round.

I can only hope the NTIA spends more time analyzing how their rules affect smaller service providers seeing greater demand for high-speed connections in smaller communities.

Right before I joined FierceTelecom in July, I interviewed Hancock Telephone, a 2,000-line ILEC in Hancock, N.Y. At the time, Hancock was updating its Nortel DMS-based TDM network with softswitch capabilities and evaluating Nortel-LG's WDM-PON Fiber to the Premises (FTTP) solution.

So what was driving a 2,000-line ILEC to consider a fiber-based broadband deployment? The area Hancock serves is known for its good fishing; the company told me it was seeing more and more out-of-towners who wanted to stay connected with a broadband connection during their stay.

Hancock also told me it had DSL deployed to about 99 percent of its small customer base, but at the time the ILEC was still leery about the NTIA's award schedule and how it could affect potential FTTP deployments.

Now, I am finding that other small towns--and even cities--where you would think making a case to get funding would be as easy as building out water lines also are facing challenges in meeting the government's underserved definition.   

A BusinessWeek article points out that even in large cities, such as San Francisco, there are neighborhoods where broadband is nonexistent.

Chris Vein, San Francisco's CIO, said he did not want to apply for a broadband grant because he knew his application would be turned down since the likes of AT&T and Comcast are widely present in the city. However, their service is often too expensive for some segments of the city's population.

"I don't want to be seen as criticizing the Administration's efforts on the broadband problem around the country," Vein said in the BusinessWeek article. "I applaud its efforts. But the rules are written in such a way that it's difficult for a city like San Francisco to meet the requirements."

What's even more surprising is that meeting the underserved concept is just as hard in much smaller towns like Pulaski, Tenn.

While Pulaski's local electric utility built an optical network to provide business and residential broadband services, it's apprehensive about applying for further funds to expand into other outlying rural areas because these towns already are served by a mishmash of wireless, cable and DSL operators. The problem is that these providers only reach some, but not all of the surrounding population.

These issues should send a message to the NTIA that the government's definition of "underserved" needs to be clarified, and that it should take into account each community's unique profile.-Sean