Wisconsin's stimulus rejection: Too many strings, or too much scrutiny?

Samantha Bookman, FierceTelecomThe return of $23 million in federal broadband stimulus funds by the state of Wisconsin may have come as a surprise to anyone who rarely sees a state government back away from money of any kind. (It's practically unheard of in my home state of Massachusetts.) But the strings attached to the grant, meant to improve Internet speeds at schools and libraries across the state, were too much, Milwaukee's Journal Sentinel reported Wednesday.

State lawmakers complained that the requirements of the grant were very precise, and that failure to meet those requirements might mean Wisconsin taxpayers would have to repay the $23 million. (Bear in mind that few or no details have emerged about which requirements, exactly, the state wasn't sure it could meet.) Top that with questions about how the grant would be applied to the state's existing high-speed network run via a public-private partnership with AT&T, and the risks became unacceptable, according to Mike Huebsch, secretary of the Wisconsin Dept. of Administration.

Wide area networks operated by the state's agencies, as well as its schools and public libraries, are connected to a statewide IP-MPLS switched network known as BadgerNet Converged Network (BCN), which runs on infrastructure supplied by AT&T. (Internet access for Wisconsin's schools, libraries and agencies is provided not by BCN but by WiscNet, a nonprofit service operated under the auspices of the University of Wisconsin at Madison., along with other ISPs.) The stimulus award was meant to upgrade that infrastructure from its current range of speed--512 Kbps to 20 Mbps--to 100 Mbps broadband speeds, with the requirement that the fiber-optic cable installed be used for 20 years.

However, as a FierceTelecom commenter concisely pointed out, "the NTIA wanted the fiber to continue to be owned by and benefit the schools and libraries it was given to. AT&T wanted the money to pay for one-time install costs for a 5 year service contract. At the end of the contract, the schools and libraries have nothing. The NTIA didn't think that was a wise investment and AT&T/State of Wisconsin couldn't come up with an acceptable solution."

AT&T's relationship with the state is certainly a sticking point here and opens up more than a few questions about the nature of similar public-private partnerships in the telecommunications industry. "What the Journal Sentinel doesn't really tell you is that if the BadgerNet operation had taken this new federal funding--it likely would have opened AT&T's agreement with the state to new federal regulatory scrutiny and put a very large AT&T cash cow at risk," writes Karl Bode of DSLReports.

Wisconsin is the first state to return broadband stimulus funds, although it likely won't be the last if other states have similar issues.

The problem here is that at the end of the day, the schools and libraries of Wisconsin still have nothing. And that's not five years down the road; that's today. Stimulus funds that were meant to boost connection speeds for 385 libraries and 82 schools in communities across the state are no longer available. There's no changing their mind on this one; the returned funds will be distributed to another state.

The schools and libraries aren't entirely without options, however. They can renew their contract with AT&T for BadgerNet and hope improvements in broadband over copper wire will be enough over that period. Wisconsin communities can hope that the free market certain Washington pundits keep touting will spur buildout of fiber infrastructure sometime within this decade.

I sure hope they can wait that long.--Sam

P.S. In observance of the President's Day holiday, FierceTelecom will not be published on Monday. Have a great holiday.