UBS: Details emerge on Obama's $40B broadband stimulus

UBS does not expect cable operators to benefit much from the grants in the plan due to their already deep broadband penetration. But the loans for higher speeds could well spur many of them to follow Comcast in deploying DOCSIS 3.0 technology and push fiber closer to their customers.

In contrast, rural incumbents may benefit “to a small degree” from federal grants to extend broadband, UBS said, but they are unlikely to participate in the loans-for-speed program, given the harsh economics of FTTP in rural areas.

Because wireless operators such as Clearwire are likely to roll out 4G networks in already well-served urban areas, UBS doesn’t expect them to benefit much from the stimulus grants, either. To benefit from the loan program, UBS said, Clearwire in particular would need to re-engineer its network, more than doubling downstream speeds, in order to qualify.

“Given that Verizon’s FiOS network likely already meets the 50/20 Mb/s threshold currently proposed, we see Verizon as the largest beneficiary,” UBS said.