Telecom Waits, Hopes For Boost From Stimulus Funds

By Jeff Griffin, Senior Editor | September 2009 Vol. 64 No. 9

Various federal economic "stimulus" programs are under way to help bring America out of the crippling recession that has been affecting almost every segment of the economy.

Stimulus programs are not without controversy: some question whether money appropriated is being directed to the proper recipients and whether the spending funds will produce the intended results.

Of interest to the telecommunications industry, and its suppliers and contractors who serve telecom markets, is the U.S. Department of Agriculture Rural Utilities Service (RUS) Broadband Investment Program authorizing $2.5 billion in federal loans and grants to expand broadband services to rural and under served areas. The program is part of the American Recovery and Reinvest Act of 2009, signed into law last February. A key element in the program is an aggressive time frame for completing projects within 24 months of funding.

Agriculture Secretary Tom Vilsack said the Broadband Initiatives Program will bring high speed internet service to communities across the country, create thousands of jobs, and improve economic, healthcare and educational opportunities in rural communities.

Public workshops to share information about funding availability and the application process were held in several cities across the U.S. in July with applications for loans and grants accepted from July 14 through Aug. 14.

Cautious optimism
Reactions from the industry have been generally optimistic, but one researcher expressed doubt that the stimulus incentives will result in a large number of new construction projects.

Robert Rosenberg, president of Insight Research, points out that the internet has come to play an important role in education and that we should appreciate the impetus for this type of upgrade. Insight provides market research, strategic information and analysis for the telecom industry.

"Broadband deployment is market driven, and this program provides subsidies for companies willing to wait longer for a pay back of their investments than carriers that serve urban and suburban areas," Rosenberg said. "It is analogous to what was done in my grandparents' time to subsidize bringing basic telephone service to rural areas."

Rosenberg said lack of availability of broadband in large areas of the country is one indication that the United States is falling behind other countries in many areas of technology.