Federal Broadband Stimulus Funds to Come in as Soon as Three Weeks

CHICAGO, November 17, 2009 – As the 121st meeting of the National Association of Regulatory Utility Commissioners kicked off Tuesday, the usual presentations on energy efficiency, commodities and electrical grid jiggering couldn’t match the drama and dilemma surrounding a topic that didn’t even exist a few decades ago: the future of broadband, and broadband stimulus money in particular.

That’s a $7.2 billion question—that number representing the amount of money federal agencies can deploy before September 2010. And the good news coming from three key federal players is that the money will start coming to states as soon as early next month, with grants rolling out through early 2010.

The first rounds dished out by the National Telecommunications and Information Administration (NTIA) and the U.S. Rural Utilities Service (RUS) won’t nearly match the demand, though. With 2,200 applications on file, Washington would need many times the available funding. “It’s just stunning the creativity and industriousness in these proposals,” said Lawrence Strickling, NTIA’s director. “It’s sad we don’t have the money to fund them all; we were oversubscribed seven times.”

The good news is that the NTIA and RUS have a request for information (RFI) out, with a November 30 deadline, as it seeks input from states to tweak and streamline the application process. This marks a prelude to second round of funding that would include a longer application window before funds must be distributed by September 2010.

Of the $2.5 billion available to the RUS, loans to applicants would allow some leveraging, said Jonathan Adelstein, RUS administrator. “We can leverage it up to $7 billion or $9 billion; whatever we use for loans we can leverage up to 14 to 1,” he said. “We want to use that money to service the more rural and difficult-to-reach areas.”

The RUS oversees quite a large footprint; 72 percent of the United States is rural land mass. Quite a bit of that represents underserved or unserved area, and Adelstein said his agency is doing all it can to get his funds out, also starting in early December.

The time crunch has meant viewing funding and loan applications at breakneck speed, and Adelstein told about 200 attendees “you can help us with the map, to flag the areas that are truly unserved or underserved.”

In reviewing its 2,200 applications, the NTIA has certain hoops that must be cleared by those hoping to get that broadband money. In terms of the middle mile paradigm, “We’re finding it’s very important that communities have high-speed fiber, and that [public and private] institutions are able to subscribe to this fiber,” Strickling said. For example, applicants who know, and can demonstrate, that a private hospital had $30,000 to branch into a fiber-optic trunk have gone the extra mile in impressing the NTIA. We’d like to see that applicants have dealt with that on the front end. We have a higher degree of confidence when we see that.”

Second is sustainability; “Is the project going to be there in five years? Part of that is seeing how reliable the numbers are,” Strickling said.

In a move that likely deflected criticism and tough questions, Strickling and Adelstein acknowledged that the application process needed reform and streamlining—and that this remained an ongoing priority, as shown in the current RFI.

Both men urged attendees to keep their eye on the big picture, and what the broadband stimulus funds could accomplish. “This is such an extraordinary opportunity,” Adelstein said. “The whole time I was [a commissioner] on the FCC, I was talking about doing this, and here we are. We can’t let the rural areas fall behind. We’ve got to get it out there.”

That theme was echoed by Illinois Gov. Pat Quinn, who anchored Tuesday’s opening meeting by touting his state’s ongoing efforts to achieve broadband parity between rural areas and the city—and efforts to bring health care and public safety information sharing into the 21st Century and beyond.

A longtime advocate for citizens in the utilities sector, Quinn took over from impeached Gov. Rod Blagojevich in February, making a forceful turn in state policy regarding broadband policy and implementation.

Tipping his hat to fellow Illinois politician—President Barack Obama—Quinn said: “It’s time to take the ideas and visions of his campaign and turn them into reality. That’s why I’m impressed with the federal stimulus bill; it provides a lot of money for broadband initiatives.”

Quinn, who founded Illinois Citizens Utility Board 25 years ago, stressed that states can’t merely wait for Washington to solve their broadband issues and shortcomings. “We try as much as possible to work with our communities in broadband development on Main Street,” he said. “But clearly, the broadband initiative represents the opportunity of a lifetime.”

And the challenge of a lifetime as well. Quinn said that as governor, perhaps his most urgent broadband goal remains creating new infrastructure. That is, as roads are renovated, Quinn wants an information highway built into every highway.

“The opportunity to link up with the federal government and form an information highway that links so many aspects of our society—health care, public safety, education—is our biggest challenge,” he said. “We have some catching up to do with other countries in terms of creating a robust system. But if 50 years from now, we can look back and say the information highway got done, I’d be happy.”

Not that the Obama administration is intent on hurrying things too much to meet the crushing need. Asked if he might be tempted to shortcut due diligence in reviewing applications in a rush to funding, Strickling broke up the audience with his one-word, emphatic answer: “No.”

Editor’s Note: BroadbandCensus.com Special Corresponent Lou Carlozo can be reached at feedbacker@aol.com.