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Stimulus awards – maybe
Nov. 7 is the target date for stimulus rural broadband construction monies to be awarded. However, nobody is holding their breath that this date is set in stone. There have been too many stumbles, negotiations and rewriting of definitions generating numerous delays already. Most expect another delay though indications are that the awards will be released before the end of 2009. That’s keeping on par with most of the other “fast-action” stimulus awards for construction – even shovel-ready projects are taking six months to a year before work actually starts.
Once the rural stimulus projects are awarded, there is a 30 to 60-day contract period. All projects must be 67 percent completed within two years of the award and fully completed within three years of the award. The $7.2 billion being spent on rural or under served areas (I recently saw how those two terms are defined within the stimulus program – very bureaucratically complicated), spread over three years will probably make only a moderate impact on the underground telecom, electric and cable construction markets. However, the projects will finally work toward achieving the elusive goal of bringing broadband to rural areas. Major carriers are in no hurry to serve those markets – in fact, most didn’t bother submitting stimulus proposals. Their business plans are still focused on high density areas.
Another FTTH Conference speaker from an independent carrier said that they expect to bring their home connection rates down to less than $900 in the near future. That’s a far cry from traditional cost-thinking of $2,000.
I know there are many cost factors and strategies involved when it comes to deploying fiber to the premises. But when the price starts dropping below $1,000, it makes one wonder why major carriers don’t finally bite the financial bullet and implement a comprehensive roll-out of fiber to mass consumer market, rather than using transition technology or cherry-picking areas to connect with fiber. The time is right: consumers’ digital appetites are ravenous, the economy is gaining steam and fiber capabilities are growing at almost geometric rates. What’s the hold-up?