What Worked in Broadband Stimulus, and Why Washington Should Pay Attention (Updated!)

When Washington thinks about the “broadband stimulus,” what should it remember? The federal government spent nearly $7 billion on new, broadband-related activities, that in many respects were completely unlike traditional federal telecommunications spending on telephone service.

Incumbents cable and telecommunications providers largely avoided the party: was that a good decision? Two major federal bureaucracies, at the Department of Commerce and the Department of Agriculture, stepped up to aggressively spend these funds, and appeared to meet their deadline, less than three weeks ago, on September 30.

With election season on many people’s minds, there’s clearly a question in store: what can the telecommunications world, writ large, learn from this vast experiment? Was it social engineering at its worst, or at its best? Did it meet, or will the project funded by this $7 billion, meet the expansive broadband expectations that it raised?

Tomorrow’s Broadband Breakfast Club, from 8 a.m. to 10 a.m. on Tuesday, October 19, at Clyde’s of Gallery Place in Washington, will be one of the first post-stimulus forums to convene the major players and consider these “big-picture” questions. Registration for the event is available at http://broadbandbreakfast.eventbrite.com, and (for those outside of Washington) a free video of the event will be made available here later in the week.

The Basics of Broadband Stimulus

To refresh everyone’s memory, let’s think back to the first months of 2009, with the economic crisis in high-gear, the passage of the federal stimulus legislation — and the decision to include broadband in the package.

Although some with in the broadband world had encouraged much higher subsidies — on the order of $30 billion to $100 billion — for broadband “capital expenditures,” a $7.2 billion figure emerged from the House-Senate agreement.

The bill passed in the first part of February 2009, and was signed by President Obama on February 17, 2009. Of the $7.2 billion originally allocated, $4.7 million was to be spent by Commerce’s National Telecommunications and Information Administration, and $2.5 billion by the Agriculture Department’s Rural Utilities Service.  NTIA’s program went by the name of BTOP, for the  Broadband Technologies Opportunities Program, and RUS’s was BIP, for the Broadband Infrastructure Program.

Of the $4.7 billion in funds originally allocated to the NTIA, up to $200 million were reserved for “public computer center capacity,” specifically community colleges and public libraries. Another $250 million were set aside for competitive grants for “innovative programs to encourage sustainable adoption of broadband services.” Another $10 million will go to oversight by the department’s inspector general. Up to $350 million was to go to broadband data and mapping.

But the vast bulk of the funds — both from BTOP and BIP — went to “infrastructure projects,” or projects to build “middle-mile” broadband connections to anchor institutions within communities, or to “last-mile” projects that would provide broadband access to unserved or underserved areas.

Before all the funds were spent, Congress passed a measure rescinding about $300 million of the funds. At the end of the day, NTIA awarded $4 billion in funds for 233 BTOP projects, and $300 million under the State Broadband Data and Development (SBDD) grant program for broadband data, mapping, verification and display.

What Lessons Should Be Learned from Stimulus + National Broadband Plan?

The broadband stimulus was about a lot of things, but one thing that cannot be forgotten is that the stimulus didn’t happen in a vacuum. Indeed, one crucial aspect of the broader measures, the American Recovery and Reinvestment Act, was its injunction for the Federal Communications Commission to create a National Broadband Plan.

In the spring of 2009, the FCC was still being run by holdovers from the previous agency. But it was clearly gearing up for some major activity. In April 2009, BroadbandCensus.com Weekly Report wrote of the National Broadband Plan:

So why should anybody pay any attention? Why is the FCC beginning an elaborate new exercise with full administrative process?

The answer must be two-fold: the $7.2 billion is but a “down payment” on untold future billions, in the words of former Obama telecom advisor Blair Levin (now back to Stifel Nicolaus). If Australia, at less than 1/10 the size of the U.S., can spend US $31 billion on broadband infrastructure, how much should we be spending?

Second, a broadband strategy is about more than building broadband capabilities. It’s about intelligibly understanding and using them. Broadband is a transformative technology. But many in the U.S. don’t have “it” – meaning, under the current FCC definition, 768 Kilobits per second (Kbps), either upload or download speed.

And those that do have 768 Kbps want 3 Megabits per second (3 Mbs), or 10 Mbps, or 100 Mbps, or 1 Gigabit per second. There’s a lot of room for growth in understanding speeds that are needed applications of the future– and getting them as soon as possible.

The agency, of course, issued the national broadband plan on March 16, 2010, or roughly the half-way point in the broadband stimulus process.

Now, in October 2010, the ultimate fate of the National Broadband Plan isn’t clear, seven months after its unveiling. Most of the staffers who led the charge for the plan at the FCC (including Blair Levin, who returned to the agency in the summer of 2009 to lead the effort), have since departed. Still, this plan is an extraordinary document.

It is comprehensive in its inventory of broadband resources. It had the most current public broadband data current available at the time of its publication. It offers ambitious, yet reachable, goals. And it so without being fiscally imprudent. It had the potential to set into motion comprehensive new opportunities for ensuring that the nation has broadband widely available and well-used.

The challenge of broadband is that it spans across so many fields, departments and jurisdictions. As the National Broadband Plan highlights, broadband can benefit health care, education, energy the environment, economic development, government performance, transportation networks, and assist and expand options for public safety. But this doesn’t just happen. It requires active coordination.

Broadband Breakfast Club and Its Role in the Broadband Dialogue

Broadband stimulus funds have been allocated, and are now about to be spent. How will the country ensure that the funds go to serve the purposes of the National Broadband Plan?

The October 19 Broadband Breakfast Club will be a unique gathering for other reasons, too. As readers of this web site are aware, BroadbandBreakfast.com is a news and events company building a community of interest around the broadband stimulus, the national broadband and intellectual property. The company has evolved in many ways since its launch in January 2008, but at its core, BroadbandBreakfast.com is about building consensus and informing the public debate on our core areas of focus.

Tomorrow’s gathering will bring together many individuals who have been pushing for universal broadband in a sensible and determined way — including key national experts including Charles Benton, Chairman of the Benton Foundation, and Consultant Craig Settles, author of the book “Fighting the Good Fight.” At tomorrow’s events, we’ll also be hearing from both a winner and an unsuccessful applicant in the BTOP process.

Many readers know that I’m now involved — more deeply than ever — in making sure that broadband-related investments are well coordinated and aim to improve the infrastructure and universal availability of broadband.

Since February 2010, I’ve been serving as the Executive Director of the Partnership for a Connected Illinois, the non-profit entity that is the recipient of SBDD funds for the State of Illinois. We’ve recently launched a new web site, at http://broadbandillinois.org, centered around a series of events in late September that brought BTOP and BIP award-winners together with broadband enthusiasts throughout the State of Illinois. And I’m very pleased that the new Chairman (as of August) of the Partnership for a Connected Illinois is none other than Charles Benton, who will be speaking at tomorrow’s Broadband Breakfast Club.

It needs to be and should be clear, of course, that BroadbandBreakfast.com (technically, Broadband Census News LLC) is in no way affiliated with the non-profit Partnership for a Connected Illinois. Still, the opportunity to consider the impact of the broadband stimulus — and set the stage for a high-quality evaluation of its social and economic impacts — makes it well worth hearing the perspective that individuals from Illinois, including Charles Benton, can bring to illuminate the Washington debate.

Details About the October 19 Event:

Speakers at the October 19th event include Charles Benton, Chairman of the Benton Foundation; Jacquie Jones, Executive Director, National Black Programming Consortium; Craig Settles, President, Successful.com and Independent Industry Analyst; Lori Sherwood, Inter-County Broadband Network.

The event is hosted by Drew Clark, Chairman and Publisher of BroadbandBreakfast.com and moderated by Bernie Arnason, Managing Partner & Founder, Pivot Media.

The Broadband Breakfast Club series meets on the THIRD Tuesday of each month (except for August and December). This season we will probe topics including “Public Safety’s Role in and the Need for Better Quality Broadband” (November 16th) and “Will Congress Re-Open the 1996 Telecommunications Act?” (January 18th). For complete details about events, including the 2011 calendar, please visit http://broadbandbreakfastseries.eventbrite.com

BroadbandBreakfast.com also hosts the Intellectual Property Breakfast Club on the SECOND Tuesday of the month (except for August). Details of events in that series can be found at http://ipbreakfastseries.eventbrite.com

The Broadband Breakfast Club is sponsored by the National Cable & Telecommunications Association (NCTA), Telecommunications Industry of America (TIA) and United States Telecom Association (US Telecom).