Stimulus bill includes $7.2 billion for broadband

President Obama signs the economic recovery package, which includes billions to be spent on broadband within the next two years.

Stephanie Condon Staff writer, CBSNews.com
Stephanie Condon is a political reporter for CBSNews.com.
Stephanie Condon
4 min read

Updated at 3 p.m. PST with comments from industry representatives.

President Obama signed into law on Tuesday the $787 billion stimulus package, which includes $7.2 billion for broadband grant and loan programs.

Both the House of Representatives and the Senate on Friday approved a conference report that reconciled the two chambers' versions of the bill.

The bulk of the funds directed at broadband--$4.7 billion--will be distributed through a program run by the Commerce Department, while $2.5 billion will fall under the jurisdiction of the Agriculture Department, giving particular emphasis to broadband deployment in rural areas.

The final version of the bill maintains that projects funded by the Commerce Department's National Telecommunications and Information Administration must adhere to nondiscrimination and openness principles. The funds must also be distributed before September 30, 2010, to projects that can be completed within two years.

The NTIA's "Broadband Technology Opportunities Program" is intended to "award competitive grants to accelerate broadband deployment in unserved and underserved areas and to strategic institutions that are likely to create jobs or provide significant public benefits," the bill says.

No part of the bill, however, defines the terms "broadband," "unserved area," or "underserved area." The NTIA is instructed to work with the Federal Communications Commission to define these terms.

The House version of the bill had included specific broadband speed thresholds for grant recipients, but the compromise version simply instructs the NTIA to fund projects that provide the highest possible speeds to consumers.

"A specific speed threshold," the bill says, "could have the unintended result of thwarting broadband deployment in certain areas."

Rather than specify that certain portions of the NTIA funds go to rural areas, the bill says the $4.7 billion is intended to serve all parts of the country, including rural, suburban, and urban areas. The money may also go to any recipient that best serves an area's needs, including wireless providers, wireline providers, or any provider offering to construct last-mile, middle-mile, or long-haul facilities.

The trade association Wireless Communications Association International said it is particularly pleased that commercial entities are clearly eligible for direct grants from the NTIA.

"WCAI members stand ready to move forward with plans to bring wireless broadband to rural and underserved areas," said WCAI President Fred Campbell. "Having direct access to grant funding will allow them to do so in a timely manner, helping create jobs fast, enable productivity, and jump-start our economy."

At least $200 million of the NTIA funds must go to competitive grants for programs that encourage sustainable broadband adoption, while an additional $200 million in grants is set aside for expanding public computer center capacity. Another $350 million will fund the Broadband Data Improvement Act, to develop a broadband inventory map and provide for certain grants.

The legislation also requires the FCC within one year to create a "national broadband plan" to ensure that everyone in the U.S. has broadband access.

While the Senate intended to distribute only $100 million in broadband funds through the Agriculture Department's Rural Utilities Service, the final number--$2.5 billion-- is much closer to the House's plan to allocate about $2.8 billion through the RUS.

Some have expressed concern that the funds may not be allocated efficiently if distributed through two agencies. Derek Turner, research director for the public policy group Free Press, told CNET News last week that groups eligible for grants may not know whether to apply for grants through the RUS or the NTIA. Grant recipients may not receive funds from both.

"With a program this massive you need it to be overseen by a single agency," Turner said, "and the NTIA is essentially the policy adviser for the president on telecommunications."

The RUS funds focus more on rural broadband access, requiring that at least 75 percent of an area receiving funds be in a rural area without sufficient high-speed broadband access. The RUS will give priority to projects that give consumers a choice of more than one service provider.

Advocates of universal broadband access were, overall, very pleased with the legislation.

"The broadband stimulus package is a clear sign that Congress is committed to connecting our country and maintaining an open Internet," Turner said. "These funds will provide a much-needed shot in the arm to those communities still stuck on the wrong side of the digital divide."

The American Cable Association, which represents more than 900 smaller and medium-size independent cable companies, praised the legislation's emphasis on providing rural areas with broadband.

"ACA and its members understand more than anyone what it takes to provide high-speed Internet service in small markets and rural areas across the country; they have been doing it for years," ACA President and CEO Matthew Polka said in a statement. "Funding broadband programs will enable small and medium-sized cable operators, who have already invested significant private capital into their communities, to receive funds to invest in the infrastructure improvements necessary to offer more advanced broadband services."