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Risk factor could affect broadband stimulus payouts

Various organizations and companies debate at a public meeting whether broadband stimulus money should fund projects with varying degrees of risk involved.

WASHINGTON--A diverse group of organizations Tuesday agreed that the criteria for choosing which broadband projects to fund with stimulus dollars should be largely based on the potential for job creation, but they could not agree on the degree of risk the federal government should take in its broadband investments.

The departments of Commerce and Agriculture have a combined $7.2 billion from the stimulus package to dole out for broadband deployment and expect to receive more than 10,000 applications for funding. The departments gathered together a number of different organizations at a public meeting Tuesday to discuss how to distribute those funds effectively and fairly, and how to hold grantees accountable.

The most important criteria, the panelists said, should be a project's potential for job creation. Other items mentioned included timeliness, sustainability, cost, and interoperability. There was dispute, however, over whether the stimulus funds should focus on clear, immediate benefits, or potential long-term results.

Jeannette Wing, assistant director of the computer and information science and engineering directorate at the National Science Foundation, suggested the government should invest not only in projects that will have short-term economic impact but also those that will pay off decades down the road.

"Broadband investments should be a strategic down payment on our future," she said. "Today's students are tomorrow's workforce and tomorrow's customers."

Since the stimulus funding is seen as a down payment on universal broadband access, the program provides a good opportunity to form a broader deployment strategy, said John Muleta, the CEO of M2Z Networks.

"You want some level of diversity to see what will work to reach underserved and unserved communities," he said. "By its very nature, (the stimulus is) trying to do projects that otherwise wouldn't be funded. This is a bit like venture capital where you'll fund 10 ideas to get one that really breaks out."

Others insisted the funding criteria should focus more strictly on jobs.

"We're talking about taxpayer money, we're not here to try experimental projects," said Lisa Scalpone. "This is a one-time jump-start and needs to be viable in the long term."

In either case, panelists said, clear objectives for grantees will make it easier for the government to provide effective oversight of the broadband stimulus funds.

"We're going to have programs that are going to be funded from all different shapes and sizes, and it's important they all have to meet the same goals," said Amina Fazlullah, a media and telecommunications attorney for U.S. Public Interest Research Group.

The broadband provisions of the stimulus package included an initial set of criteria for the two departments responsible for the funds to consider, such as whether a project will increase affordability and subscribership, whether it will provide the greatest broadband speeds to the greatest population, and whether it will enhance service for health care delivery and education.

Meeting those goals--not to mention a host of others numerous groups would like to see addressed--means the Commerce and Agriculture departments will be in the business of picking winners and losers, panelists acknowledged.

"There's going to be an enormous amount of subjectivity," Muleta said. "What we have to do is have some discretion for the people developing the program to determine how to mechanize this."