The Texas broadband follies

For signs of serious sickness in what passes for U.S. Internet policy, look no farther than the "golf-themed" Houston suburbs that are about to get government-subsidized broadband.

Early this month, the U.S. Department of Agriculture announced its latest round of funding for rural broadband projects, a program aimed at bringing farms, ranches and other rural communities onto the Net. Agriculture Secretary Ann Veneman praised the loans as part of President Bush's efforts to bring broadband "to every home in America by the year 2007."

But it turned out that almost a quarter of the money was going to a company that serves high-end, master-planned suburbs just outside of Houston, with homes costing up to $1 million--hardly the type of community that needs subsidized Net infrastructure. Particularly when there are plenty of people in places like Hell, Mich. that still have to make a long-distance call to get on the Internet at all.

Is it just coincidence that these lucky Houston suburbs are part of House Republican Leader Tom Delay's congressional district?

Pork? Maybe. String pulling by DeLay or the Texas-friendly White House? That's hard to say. An Agriculture Department official speaking on background said the agency's staffers didn't get any calls from "DeLay or anyone else" on the loan, slated for Houston-based ETS Telephone & Subsidiaries.

But the alternative explanation isn't much better: Bush's plan for broadband isn't working.

According to the USDA official, the agency is having a hard time finding people to take the $2.2 billion in funding available this year. That's why a bunch of ritzy suburban developments are getting money that was supposed to be earmarked for genuinely rural areas--they asked, and nobody else was standing ahead of them in line.

If that's true, it's time for some serious rethinking of federal broadband policy.

The rural broadband program has been among the few active steps U.S. policymakers have taken to address a growing digital divide, amid concerns that other countries, such as Canada, South Korea and Japan, are far ahead in broadband penetration and average speeds. Indeed, recent news that many Japanese consumers can now get 100mbps connections for just $38 has made our cable modems look like tin cans and string.

The program, passed as part of a farm support bill in 2002, provides low-interest loans to private companies building networks in communities with less than 20,000 people. It requires recipients to invest their own money as well and to have real, potentially sustainable business plans in place.

"If government dollars are to be spent, then rural areas having that kind of access is beneficial," said Gene Hall, a spokesman for the Texas Farm Bureau. "The reason the Farm Bureau is for this concept is to make sure farmers and ranchers (live) where there really is limited access...to those services."

That doesn't quite describe what's happening in Houston.

ETS Telephone & Subsidiaries, which operates in the Houston area under the name En-Touch Systems, is getting $22.7 million in rural broadband funds, one of the largest allotments in the program's two-year history. The company's mandate, as advertised on its Web site, is to "provide bundled telecommunications services to quality master-planned communities." A map of its coverage areas shows the company staying squarely inside the suburban reach of Houston, as opposed to reaching the outlying open-space areas.

The advertising copy for one of the En-Touch communities tells it pretty much like it is: "Water and golf are the themes for Avalon at Seven Meadows, where 96 percent of all home sites will have views of 28 acres of lakes with fountains, or of the Meadowbrook Farms Golf Club, featuring an 18-hole championship course designed by Greg Norman."

That company's president, Rich Gerstemeier, did not return repeated calls for comment.

None of this is to say that the USDA isn't doing excellent work with other projects. More than $600 million in low-interest loans have been given out under the rural broadband initiative, to some genuinely needy areas.

But if the administration is having such difficulty finding broadband-impaired regions that it has to give En-Touch a helping hand, the program is seriously flawed. Both Bush and Kerry have noted that broadband access can make an economically challenged region viable again. This is money that could literally save rural towns from extinction.

A bunch of million-dollar homes built around golf courses don't need that kind of help. If DeLay and Bush have any real concern for rural broadband and the jobs it will bring, they'll find a way to get this money to communities that really need it.