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Government moves to speed broadband stimulus

After a delay and criticism over the application process, the federal government said today it will consolidate its $7.2 billion in stimulus funding for broadband Internet into two rounds instead of three.

The first round of grants and loans for $4 billion is being considered now and will be awarded in December. The agencies overseeing the program didn't indicate when the remaining $3.2 billion in funds will be released. Administration of the funds are split between the National Telecommunications & Information Administration and the USDA.

Jonathan Adelstein, administrator of the Rural Utilities Service, a branch of the USDA responsible for a portion of the funds, said that by shortening the process, more funds will get out the door quickly to help stimulate jobs and bring broadband access to hard-to-reach areas.

Critics of the broadband stimulus plan say the process has been slow. Ten months after the program was announced, money for mapping programs has been distributed, but so far no ground has been broken to lay down new pipes or raise new towers for cell services. The nation's biggest carriers of Internet service, AT&T, Verizon and Comcast didn't apply for any grants, saying they don't need the public funds. Privately, companies have complained that open-Internet conditions attached to the loans deterred some applicants.

The long process has brought confusion to some private companies, which are waiting to see if their applications are approved. Others are sitting on budgets and business plans as they wait to see whether funding will bring new competition to markets where their services exist, one private investor told me.

“We are listening to applicants, reviewing applications received, and all indications suggest a need to revisit the application process," Adelstein said in a statement. "We will consider changes ... to make the process more 'applicant friendly' -- from beginning to end.”

As such, the NTIA and RUS have opened comments from the public on how best to administer the remaining funds.

The first round the grant and loan programs produced about 2,200 applications requesting nearly $28 billion in funding – almost seven times the amount of funding available in that round – for proposed broadband projects reaching all 50 U.S. states, five territories and the District, the agencies said.

The stimulus funds are considered the first part of a strategy by the Obama administration to bring Internet access to all U.S. homes and businesses. The FCC is working on a plan to deal with hurdles to adoption and questions over how to bring broadband services to hard-to reach and under-served areas.

By Cecilia Kang  |  November 10, 2009; 11:04 AM ET
Categories:  Broadband  
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