Maybe they meant stimulating conversation?

by Steve Blum • , , , , , , ,

Following a couple weeks of meetings and conference calls with industry, government and community people, and doing some reading, the broadband portion of the stimulus package isn’t looking so stimulating…

  • The real fight is on now. Lobbying groups are fully engaged as the NTIA determines the scoring criteria it will use. The process will continue over the next two to three weeks. There are more hearings scheduled for Washington, plus two others next week, one in Las Vegas and one in Flagstaff. Expect wonks from all sides to parachute in, trying to tweak details and definitions to their advantage. Same story for the RUS money.
  • The deck seems stacked against urban community broadband projects. The focus at this point is on two criteria, 1. job creation and 2. reaching unserved and underserved areas. In that order. Big city interests want to equate “underserved” with “unaffordable”, but even if they are successful, they’re pitching jobs tomorrow against jobs today.
  • There are three kinds of jobs that could be created via broadband process: one-time system construction, ongoing system operations, and second order effects where the availability/affordability of broadband creates and/or preserves jobs down the road.
  • The consensus within the industry is that priority will go toward construction jobs, because those will get money into peoples hands and then into the economy most quickly. I wrote about this subject earlier.
  • At the state level, the expectation is that substantially all of the NTIA money will go through the states. That’s probably not realistic. The broadband portion of the stimulus bill, unlike nearly all of the rest of the bill, does not require the money to flow through the states.
  • Community and municipal people think that taking the state out of the funding stream means the NTIA will direct more money directly to community projects. That possibility becomes likelier if the current lobbying efforts directed at NTIA’s scoring criteria are successful. But the prevailing industry view is that the reason the NTIA money doesn’t necessarily flow through states is because the big incumbent carriers, like AT&T and Verizon, won the day in Congress and will be at the head of the line.
  • The prevailing industry view also assumes that some money will go to community projects, if only for appearances sake. If so, cities could be in line for a bit of funding if a concrete job creation case can be made.
  • The California Emerging Technology Fund has identified a substantial amount of money – more than $60 billion – that the stimulus bill directs towards broadband-related technology projects, with health-related IT projects at the top of the list. Most of that money ($55 billion? More?) will flow through the states, and CETF and the California governor’s office are well positioned to claim a nice chunk. The $7.2 billion of NTIA and RUS money could slipt away from them, though.
  • Everyone agrees that the process is moving quickly, that the fact that several key positions in the new administration are unfilled makes the process very difficult, and that presenting a unified message, if not speaking with one voice, is the key to being heard before the scoring criteria are set. The game could be all but over by the end of March or the beginning of April.
  • The FCC is in the act as well. It’s planning to come up with a national broadband strategy by the end of May. I think it’s a mistake to think that it will have much influence on NTIA and RUS grant decisions. The grants, and the process of making the grants, will create jobs, or so the Obama administration thinks. The FCC process will create or save jobs — mostly for lobbyists, lawyers and other Beltway bandits, but a job is a job, I guess. It’s about jobs, not grand broadband policy or even coherent management.

The mantra so far is “fast, fast, fast”. Fair enough. But everyone will want a say, then everyone will want a say regarding what everyone else said. It would be nice if the serious money actually started to flow by this Summer, or even by Fall. It would be nice. But I’m not counting on it.