Broadband stimulus puzzle

With the ink from Barack Obama’s signature still wet on an economic stimulus bill that includes billions for broadband deployment, IBM says it plans to use some of those funds to offer broadband-over-powerline services.

IBM said this week that it wants to use funds from the recently passed federal economic stimulus package to roll out more BPL — a technology with a history of false starts — in rural parts of Alabama, Indiana, Michigan and Virginia, according to Reuters.

Interestingly, the Reuters article states, “IBM said it did not know how much government funds it could receive, but that the venture would proceed regardless,” which calls into question whether “stimulus” is the right word to use in this case.

I have been skeptical of some of the aims of the government’s broadband stimulus efforts, and I’m not the only one. Robert Crandall, an economist with the Brookings Institution, told the Los Angeles Times this week: "The problem with broadband subsidies in the stimulus bill is that they focus so much on rural areas. Those areas already get lots of subsidies for telecommunications, and there is no evidence that those subsidies work."

However, I also have acknowledged the difference between the long-term economic impact of increased broadband availability and the near-term impact of broadband stimulus on job creation. That’s a distinction the administration’s messengers are emphasizing as well, calling the broadband stimulus package “not the puzzle but just a piece of the puzzle.” Though I’m unclear about the aptness of the word “stimulus” in the above example of IBM, I do think the word “puzzle” fits well.

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