Consumer Groups Attack Broadband Stimulus Rules

capitolGroups representing municipal broadband advisers and consumer-oriented nonprofits have written a letter protesting the way the first tranche of $4 billion in broadband stimulus funds is being distributed. They sent the letter to Larry Strickling, the administrator of the National Telecommunications and Information Administration, which is in charge of distributing $1.6 billion in stimulus funds in the first of three rounds. The groups, which include Consumers Union, Public Knowledge and the National Association of Telecommunications Officers and Advisors, say that the definitions used in the rules mean that the money won’t go toward advanced technology such as fiber or projects aimed at delivering cheaper broadband to constituents.

The issue they raise is one we wrote about two weeks ago when we noted that most of the money allocated in this first round of grants and loans is limited to projects that will reach areas that have no broadband at all, while excluding efforts to boost speeds or provide cheaper services. Part of the problem lies with the government’s definition of broadband as 768 kbps. According to the rules, areas that already have Internet speeds at that level or higher aren’t eligible for loans or grants.  From the letter:

The definition of “underserved” has the effect of precluding any residential infrastructure program in an area where a minimal level of broadband, even first-generation DSL, is generally available. This preclusion occurs regardless of whether advertised speeds are actually delivered; whether service is affordable; whether systems are capable of serving all interested consumers (in many communities where DSL is advertised, residents and small businesses are refused service because circuits are tapped out); and whether the speed of service meets the needs of the consumer (for example, DSL and even cable modem service are woefully insufficient for home-based business and teleworking).

The letter asks the NTIA to pay attention to how affordable broadband services are within a given area and also asks that the rules be changed to allow schools and other public institutions located outside of underserved areas to be eligible for grants. Another troubling aspect of the funding rules alleged in this letter is that carriers have the potential to veto projects in underserved areas if they already offer service in those regions. This is only the first of three rounds of funding that the NTIA will deploy, but it’s still $1.6 billion spent delivering the least amount of broadband to the people who need it the most.