The broadband stimulus scramble

Uncertainty surrounding exactly how broadband stimulus funds will be awarded already is stimulating spending, we’re told -- on lawyers and consultants (and perhaps even lobbyists). As I reported, merely overseeing the distribution of these funds creates jobs, too.

But some say this uncertainty actually is chilling the broadband sector. “RLECs are paralyzed right now,” Joseph Upton, president of Upton Consulting, wrote last week. “One CEO told me that she had six previous quarters of 25% growth in a company that had been on the skids, but the minute the stimulus word came out, all business just stopped.” 

At the government’s first public meeting on this subject last week, one carrier representative said he was ready to award contracts to fiber and tower providers for a rollout, but he was afraid that if he did so before getting more specifics about the grant process, he might disqualify himself from getting federal funds.

The government might respond to this notion that the current knowledge vacuum is freezing deployment by pointing out that, according to the new law, federal funding will only go toward projects that would not have occurred without that federal funding. In other words: If you’re halting a project in order to get stimulus money, you probably weren’t going to get it for that project anyway. (And let’s be honest: The broadband space started to slow well before the stimulus law was passed.)

Nevertheless, until we know -- at least -- the definition of some of the key terms being used to determine grant awards, such as “unserved” and “underserved” in particular (not even my spell-checker recognizes the former), most telcos with a shot at winning stimulus money will be looking at their entire deployment plans in order to best determine where they should be standing when the candy in this $7.2-billion piñata starts to fall.

As if the process weren’t complicated enough -- with intersecting criteria such as whether a project enhances service for health care, education and children or whether the applicant is a “socially and economically disadvantaged small business” -- even the simple goal of achieving the most broadband bang per buck creates a lot of complexity because it encourages applicants to hurriedly marry up with partners for joint proposals. So no doubt WiMAX folks are frantically calling up fiber people, who already are on the phone with satellite folks. And on and on.

Meanwhile, the answer to most questions from the government has been, “You tell us,” which means applicants must also get busy lobbying for their own definition of unserved, underserved -- and even broadband itself. Meanwhile, another vague component of the law, which describes a preference for customer choice, may -- depending on exactly what it means -- cause some would-be applicants to question whether they want the money at all.

One thing's certain, It’s going to be a busy, hazy summer.

E-mail me at ed.gubbins@penton.com.