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Policy questions may affect broadband payouts

Regulators will have to decide whether it is necessary to hold off on distributing stimulus funds until more accurate data on broadband access is available.

WASHINGTON--Federal regulators have some critical decisions to make in the coming weeks that could determine whether the $7.2 billion in stimulus funds designated for broadband will create the optimal number of jobs or be distributed wisely, Internet experts said Wednesday.

The stimulus funds will already take too long to distribute, contended some speakers on a panel at the U.S. Chamber of Commerce, but decisions such as whether to withhold the money until new policies are developed or broadband data is collected could make the funds even less effective at creating jobs.

"It starts to blur the line between stimulus and just good national investment," said Rob Atkinson, president of the Information Technology and Innovation Foundation. "There's a sort of half-life on stimulus funds. At the end of the day, (the economic recovery package) was sold to the American people as stimulus."

The stimulus package includes $350 million for the creation of a broadband inventory map that will lay out, in detail, areas of the country that lack broadband access. Atkinson said he has heard some in Washington suggest that the rest of the broadband money be withheld until the mapping exercise is complete--something he says would significantly mute the stimulative impact of the money.

"I really think we should not try to layer on a lot of reforms here," he said. "The perfect should not be the enemy of the good."

Yet without accurate information about where broadband is already deployed, agencies run the risk of distributing money inefficiently or to fraudulent programs, said Raquel Noriega, director of strategic partnerships for ConnectedNation, a nonprofit that promotes broadband adoption.

"While the stimulus bill is not about policy making, it does not want to waste dollars," she said. "We believe it is have this information in order to avoid chaos--in order to run a grant program that avoids fraud, but also for the expediency of making decisions about what is served and what is unserved."

ConnectedNation has completed mapping broadband access in eight states and could finish the rest of the mapping before the end of the year, Noriega said.

"Unfortunately, those maps are not going to be available tomorrow," she said.

Regardless of whether the mapping is a consideration, the funds will be distributed slowly because the grant allocation process is complicated, said Jeffrey Eisenach, chairman and managing partner of Empiris, an economic consulting firm.

"The grant process is not simple and straightforward," he said. "There is a lot of paperwork involved and a lot of due diligence that needs to get done."

Moreover, he said the Agriculture Department's Rural Utilities Service--which is responsible for allocating $2.5 billion of the broadband stimulus funds--does not have the best record for distributing broadband funding effectively. Much of the broadband funding the RUS is already responsible for has gone to areas that already have high-speed access, he said.

To make the grant distribution process more effective, Eisenach said the RUS and the National Telecommunications and Information Administration--the other agency responsible for broadband stimulus funds--should work with the states to find worthy projects.

"The task is too large for any group of grant reviewers," he said. "There have to be intermediaries, and the natural intermediaries are the states."