Broadband Stimulus Plan Keeps Looking Worse And Worse

from the that's-not-stimulus dept

Tue, Aug 11th 2009 6:59pm — Mike Masnick

From the beginning, we've questioned the broadband stimulus plan, which was designed not to actually stimulate broadband so much as it was designed to stimulate jobs by getting people to install broadband in places where people weren't that interested in getting broadband. It had little to do with actually increasing broadband in a meaningful way. For that... all we kept hearing about was about how we'd also get some magical broadband mapping solution with hundreds of millions of dollars given to Connected Nation -- an organization favored by incumbents, because it lets them retain control over the mapping process. And, indeed, it looks like the broadband stimulus remains something of a boondoggle. As Stacey Higginbotham notes, there's "no map for success," and the plan itself has been watered down. The mapping plan has been cut back to appease telcos, and the focus of stimulus money will go to those not served by broadband, rather than those underserved by broadband. Installing broadband in far off places where there's no current access may sound good, but those are sparsely populated areas where broadband doesn't do all that much. Meanwhile, folks in densely populated regions have only one or two very slow options. Focusing on boosting broadband competition and speeds in those areas would seem to have a lot more bang for the buck... but doesn't seem to be in the current plans.

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Filed Under: boondoggle, broadband, broadband policy, broadband stimulus
Companies: connected nation

38 Comments

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R Cannon, 11 Aug 2009 @ 7:46pm

M'K but you are confusing things
You are confusing Broadband Stimulus with the Broadband Plan. Broadband Stimulus is a Dept of Commerce function of grants to support broadband. Broadband Plan is a proceeding before the FCC which is currently ongoing, with the second workshop Wednesday, with a report to Congress on what the plan should be due in February.
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Anonymous Coward, 11 Aug 2009 @ 8:00pm

Broadband stimulus is something that has gone on for a long time. Originally, it was used to help pay to haul huge ass internet pipes to rural cable and phone operators / head ends. Someone I knew ran a hosting company a building next to a cattle field in Montana, basically for free on a huge ass pipe that was brought in on government money.

Now they are paying to get the final mile done for the same areas.
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Anonymous Coward, 11 Aug 2009 @ 8:22pm

What really sucks is that telco's get a monopoly over our cable lines and phone lines yet the government is here funding most of the infrastructure. Why should special interest groups get a monopoly, under the pretext that telco's pay a lot of money to build infrastructure, when it's the government that funds most of the infrastructure to begin with?
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Anonymous Coward, 11 Aug 2009 @ 8:25pm

Re:
It wouldn't bother me so much that the government funds most cable, phone, and internet infrastructure if anyone was allowed to compete on them and provide service. Not only does the government fund most of this with grants and stimulus plans, they grant monopolies to special interest groups so that they can rip off customers with higher prices.
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Anonymous Coward, 11 Aug 2009 @ 8:28pm

Re:
That's why broadband in America is desperately falling behind.
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Anonymous Coward, 11 Aug 2009 @ 8:31pm

"The mapping plan has been cut back to appease telcos, and the focus of stimulus money will go to those not served by broadband, rather than those underserved by broadband."

I don't mind this, I want those people to get their news from places other than mainstream media and I want them to also join blogs like techdirt and I want to get their opinion and I want them to read everyone else's opinion. It would be nice to have more participants on the Internet. Again, what bothers me is the fact that the govt often funds these ventures to expand broadband and then the govt grants special interest groups monopolies over the infrastructure. They shouldn't have it both ways.
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Cody Jackson (profile), 11 Aug 2009 @ 8:34pm

It's a government project
What did people expect? The gov. is running this and very few gov. projects are successful. Plus, these sorts of projects are, almost by nature, designed to help the incumbents and maintain the status quo.

BTW, whatever happened to that billions of dollars that was given to the telecom companies to install broadband across the nation? That was over a decade ago and they never fulfilled their obligation. Now we're giving out more money to do effectively the same thing?
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Bubba Nicholson (profile), 11 Aug 2009 @ 8:36pm

How about civil defense?
The iTablet could use an automotive application that will turn on car horns as a civil defense alert measure. See: http://www.sciencedaily.com/releases/2009/07/090720083423.htm

However, they could also just text people about the disaster, too.
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Skeptical Cynic, 11 Aug 2009 @ 9:14pm

I am lucky!
For 4 years I have been a hostage to the cable company because BellSouth could not see clear to get any faster DSL to my house. Now my house is in a fairly upper income neighborhood (not rich but above average) but we could get nothing but 1.5mb down. So I was stuck with Charter cable (which is the butt crack of the cable industry) to get any speed above that. Well I want to say that I am blessed now because Clear WIMAX now serves my area and it works better than cable internet!!!! I get a full meg faster download and unlimited mobile internet via a dongle for less ($2.47 less) than I was paying them. WIMAX may not be around forever but I am ecstatic that now I have a choice. Oh and Charter and Bellsouth have started to offer some specials in my area!
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Hmmm, 11 Aug 2009 @ 9:25pm

Read It
Actually the broadband stimulus plan will probably help more areas that are underserved because it isn't cost effective to hit the unserved. Businesses are still going to think about their bottom line. Also, how many applications have you read? You have no idea where the money is going...just wait and see before complaining.
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AlwaysBreaking (profile), 11 Aug 2009 @ 9:43pm

Underserved areas
It's a government program, so it's going to be flawed. However, many rural areas desperately need broadband. The telcos won't run service in sparsely populated areas because they won't see a payoff within a couple of years. They are beholden to shareholders. The stimulus is the only way some areas will get broadband. Small telcos in rural areas are generally more will to run services out in the middle of nowhere. The big telcos only care about squeezing money out of existing subscribers. There are plenty of rural areas in California that are under served by AT&T, but I doubt this stimulus package will help them. And I'm talking about areas well with DSL range of an AT&T office.

Yes, urban America needs competition, but rural America still needs access.
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Anonymous Coward, 11 Aug 2009 @ 10:20pm

Re: Read It
It's going to special interest groups who then get government granted monopolies over the infrastructure. That's how it's always been.
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Anonymous Coward, 11 Aug 2009 @ 10:27pm

Re: Re: Read It
Here

http://www.muninetworks.org/content/how-ntia-dismantled-public-interest-provisions-broadband -stimulus-package

It looks like nothing but a scam to fund private interests at public expense.
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Fred McTaker (profile), 12 Aug 2009 @ 12:52am

Re: It's a government project
The US Government has many successful projects, but they are almost never "public-private partnerships" that involve for-profit companies, with an incentive to lobby and cheat. That's why I think they should have let GM go bankrupt and sold off the pieces. "Too big to fail" needs to become "too big to not sell it off in smaller pieces." The recombined AT&T monolith needs to be pieced apart in the same way, and should cleanly separate the lines from the services that run over those lines -- just as auto makers aren't allowed to own roads anymore.

This broadband 'stimulus' is looking a lot like Universal Lifeline taxes all over again. At least the incumbent monopoly telcos aren't allowed to add a "service fee" to our bills for it, and keep on charging it long after the program intentions have been fulfilled. Now they just get all the tax money up front.
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aseg, 12 Aug 2009 @ 5:16am

"...those are sparsely populated areas where broadband doesn't do all that much"

Well, if we get it, it will do much for the millions of rural Americans like me who have no broadband access. I read an earlier comment from someone who is complaining about only getting 1.5MB download speeds and laugh. You don't know how lucky you are. Try dial-up sometime, or pay $70+/month for a crappy satellite connection.

I am not optimistic that this program will make much difference to the availability of broadband in rural America, but at least it has its priorities right.
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The Cenobyte, 12 Aug 2009 @ 6:07am

So city people are worth more than country people?
Would you say this is we where talking about water? Really you think it's more important for me to have a few extra options because I live in a metro area than it does for the people that have nothing at all to get something at all.
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Duramax08, 12 Aug 2009 @ 7:24am

still have dial up here in san antonio, texas
Im still using dial up here. Im less then a mile from city limits and twc ends like 1.4 miles from my road and im on the edge of dsl. Im hoping that this funding will help me out get something. Its funny people are whining about 1.5mbps, Im on a 44kbps connection with my high speed dial up modem. Blazing speeds here. Recently seen twc drive up and down the road so maybe thats a sign of them coming down the road soon. Also sprints 4G has just been announced to come in town and I may go for that. First come first serve.
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hegemon13, 12 Aug 2009 @ 7:46am

Selfish much?
"The mapping plan has been cut back to appease telcos, and the focus of stimulus money will go to those not served by broadband, rather than those underserved by broadband."

That attitude right there is precisely why the inefficient and sometimes maddening electoral college was and is still necessary. Otherwise, the needs of those in more sparsely-populated areas are ignored for the needs of the all-important majority.

What do you think would be harder in today's world? Being in an urban/suburban area with an always-on connection limited to, say, 768K (the minimum threshold to be considered broadband)? Or being in a rural area, limited to 56K? Web sites are now built for broadband. A dial-up connection has become virtually unusable. Those not served by broadband are increasingly closer to being completely unserved by the Internet.

Personally, I have reservations about the idea of the government paying for broadband expansion. However, if the government is going to fund anything, it should be the unprofitable "last mile" connections, which are not likely to happen without government involvement. Improvements to infrastructure to help those poor "underserved" users can be paid for by the telcos. Those kinds of improvements would come naturally if the government did something about the lack of broadband competition. They don't need to pump in money to solve the "underserved" problem. They probably do need to chip in to get broadband to much of the rural Midwest.
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Anonymous Coward, 12 Aug 2009 @ 8:36am

Re: Re: It's a government project
"The US Government has many successful projects"

You're kidding, right?
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Ken, 12 Aug 2009 @ 8:39am

Increase competition
I do not believe that using government money to increase competition would work in this case. If you have two ISPs in the same region then funding a third ISP to come into the region would only hurt the two existing ISP. I do not think that putting a third ISP in place using govt money would be a good thing if the free market isn't able to support it naturally.
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Roland Cole (profile), 12 Aug 2009 @ 8:48am

WRONG on Rural
Techdirt said "but those are sparsely populated areas where broadband doesn't do all that much" Wrong! Numerous other commenters have preceeded me to make similar points. Broadband has NETWORK effects -- the more people with it, the more valuable to me. More readers for Techdirt, for instance -- more contributors to Techdirt -- and more goods and services to and from those people. Plus - broadband enables and facilitates -- it may be faster, better, cheaper to deliver some forms of health care, education, et al. via broadband, ESPECIALLY if the recipients are few and far apart. So broadband does MORE in rural areas, not less. Admittedly, it also costs more, so cost/benefit analysis is relevant. But if we start assuming the benefits are less, when in fact they are more, the analysis will be wrong from the start.
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hegemon13, 12 Aug 2009 @ 9:15am

Re: Increase competition
The government does not need to spend money on startups to create competition. All they need to do is declare all publicly-subsidized infrastructure to be open and neutral. Therefore, any company could start up and use the infrastructure to provide service. The free market may only be able to support so many providers, but it can certainly support more than it currently has. Competition is only a good thing. I agree that the government buying a third ISP would be a huge mistake, but that's not what most people are talking about when they say that the government needs to increase competition.
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Industry Analyst, 12 Aug 2009 @ 9:24am

government funding of cable infrastructure
You are wrong Anonymous Coward. Cable infrastructure is funded by private risk capital. The government does not fund the building of cable Internet infrastructure with grants and most cable operators are not applying for stimulus grant money. I suggest you read and learn about what is really happening out there before you make such outrageous comments. Publicly owned Cable companies have been investing $12-$15 billion/year of their own private money to build their networks over the past 10 years. You can look it up in their 10Ks and add it all up... no public money there.
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Industry Analyst, 12 Aug 2009 @ 9:44am

rural areas NOT that interested in getting broadband? Says who?
Michael: Re your comment: " ...it was designed to stimulate jobs by getting people to install broadband in places where people weren't that interested in getting broadband." What kind of a snarky statement is that" What makes you think that rural areas are not interested in getting broadband." Really? Here's my advice: Get it right or don't print it. With low homes/mile density, many incumbent telcos (or cablecos) just couldn't justify return on investment of copper/fiber lines or to upgrade central offices to support DSL--which would have too long a reach in terms of miles to get to a home in order to work. So fundamentally rural areas/and even some not so rural areas, are either stuck with dial up or satellite Internet. So just because they can't get it means they have no interest in getting broadband? Honestly, this is a ridiculous statement on its face.

When there is a market failure, as is the case in most rural areas where density of home per mile makes it cost prohibitive to build the infrastructure and/or to support broadband services based on take rates, we should do nothing?

And to all the other snarky posters who say that government will ruin it if they get involved, well, look I'm no booster-cheerleader for governments, but if there are public private-partnerships that can subsidize the cost of building the infrastructure, why shouldn't people in rural areas get broadband?

The key to success will be to find a way to make the ongoing operations profitable, and that's the issue. There is plenty of demand for broadband in rural markets,it's access to networks and services that it the issue. Ultimately, it's likely to come down to wireless infrastructure that serves users in those markets, which is cheaper to install than either fiber or copper.
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Mike Masnick (profile), 12 Aug 2009 @ 10:39am

Re: Selfish much?
That attitude right there is precisely why the inefficient and sometimes maddening electoral college was and is still necessary. Otherwise, the needs of those in more sparsely-populated areas are ignored for the needs of the all-important majority.

So I live in a densely populated area, but I wish I had all the luxuries of living in the country. Should I expect the gov't to make that possible for me?

So why should we expect the opposite?
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Bob Frankston (profile), 12 Aug 2009 @ 11:00am

More Broadband is not the same as more Internet
No surprise then that it's a boondoggle. Broadband Internet?
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Fred McTaker (profile), 12 Aug 2009 @ 11:42am

Re: Re: Re: It's a government project
No, I'm not kidding. I suppose you don't like having a military, veteran's hospitals, a post office, or Medicare? You're the one kidding yourself when you claim private for-profit industry will do any of that better or for less money. In any monopoly or trust, profits=rents=tax. The taxes I currently pay on things like health insurance and Internet access are much higher overall than what I pay on government services, and I consider that taxation without representation. Tea bagger idiots would claim not to have representation in government, but they don't understand how basic democracy works, nor the limits of shareholder rights in corporations.
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Mumble, 12 Aug 2009 @ 12:54pm

What about electricity?
If the electricity build-out were not undertaken by RECs, lots of us living in rural areas would still be without power. It is the same with broadband access. Wireless may be the answer, but it will have to be done well - I am only 4 miles from all the TV transmitters in my area, but DTV reception often gets sketchy, and satellite reception is not always stable either. I also agree that if the government funds the infrastructure, the telcos should not be allowed to act like they own it....
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hegemon13, 12 Aug 2009 @ 1:00pm

Re: Re: Selfish much?
All the luxuries? No. However, the basic premise behind broadband stimulus is that the Internet is no longer a luxury. Rather, it is a necessary service in most homes, especially those with children in school. Therefore, the goal to extend functional internet to all households. Today, functional means broadband, as the Internet is increasingly unusable on a dial-up connection.

Speaking of luxuries, why should the government pay to up the speed in your so-called "underserved" areas? Speeds of 1.5MB, or even 768K, are perfectly adequate for most tasks, educational purposed, etc. Anything faster truly is a luxury, no matter where you live.

If the government took your attitude back when phone service or electricity were considered "luxuries," how many rural areas would still be without such essential services?

No one is saying that cable TV, skyline views, nearby shopping, etc should be extended to rural areas on the public dime. However, the Internet has become completely integrated into society. It is really no longer any more optional than a telephone, and basic broadband is not a luxury.

Last, on a less-related note, the "luxuries" of the country really only apply to a select few wealthy sub-suburbanites. For most, rural living is not a luxury at all.
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Whatnow, 12 Aug 2009 @ 1:55pm

It's not free
In the rural areas most of the articles give a figure of around $4k to $6k for fiber. Fiber and some type of wireless are the only two delivery systems that will work. many of the households in these areas can barely afford basic phone service below $20/mo.
The town of Wilson, NC took $28 million to build an in town fiber system. In 2007 Wiki listed 48k population and 18660 housing units. The cost would come out to $1500 per housing unit. The lowest internet only of $35 would take 3 years to repay the $28 million. This is at 100% uptake in a town. You can go to the town site and see all they offer TV phone internet and the price.
Rural may be 3 to 4 times that about with an uptake of less then 100% I have seen figures of around 25% to 50% uptake. Some body has to come up with the up front money and these figures do not include the on going costs.
It is easy to say do it but let somebody else pay for it. The posters on this forum are the somebody else and they already have some broadband.
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eh, 12 Aug 2009 @ 2:01pm

Re: Re: Re: Re: It's a government project
Military, military, military...everyone thinks that mentioning the government should be an opportunity that people are in the military dying. It the worst of our programs! It hemorrhages money quicker than AIG or Chevy because the money has to be spent on tools to compensate for people that wouldn't be competent to drop fries at McDs. That's throw good money after bad...this has the ability to bring all parts of society in all parts of the country together and create a ton of economic development. But don't believe me, just watch and see.
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Al Mozi, 12 Aug 2009 @ 2:46pm

Broadband in area not served
You obviously don't know what your talking about. I am between Chicago and Milwaukee, nearset large city Kenosha, population 95,000 and small local cities. The local telco installs DSL in new subdivisons yet has no money for existing customers unless right next door to a new subdivison.

Not exactly rural by any standards.
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Gene Cavanaugh, 13 Aug 2009 @ 9:14pm

Stimulus plan
Yeah, we've made a lot of mistakes, right? Electrifying the nation (sparsely populated areas, no money for heavy areas), telephone systems (same),
I suppose it is easier to gripe than to think.
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Mike, 21 Aug 2009 @ 2:11pm

Re: Broadband in area not served
True. I have been a telo eng for 30 years and have placed fiber to the home in at least 40 new subdivisions over the last 4 years. These subdivisions stand 50 to 100% empty now. What a waste of money we could have served a lot of people around these subdivisions with real highspeed but no one cares about them. I worked on stimulus planning over the last couple of months with a team and we designed over 400 exchanges with fiber to do up grades in unserved and underserved areas for one of the larger telco's they said at the last minute to hell with it and pulled the plug with the plan. They had little fiber in most of the are's I worked on. I think state PSC's should look at these holding compines and say if you don't expand sell or we will cut your billing rate, they are making a killing and raping the consumer.
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Jesse, 9 Dec 2009 @ 10:24pm

Broadband Stimulus Plan Keeps Looking Worse And Worse
I support installation of broadband lines in areas where there are not ones. I used to live in the country and badly wanted broadband internet. The only choice I had for internet was satellite. As we all know, satellite broadband is a pain in the ass. Now, that I live in town I have a cable modem. I can also opt for: D.S.L., cellular, and of course satellite. Don't bitch that densely populated areas are under served. They are the most served (almost exclusively). Areas such as the one where I used to live are really not served.
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Jesse, 9 Dec 2009 @ 10:29pm

Re: I am lucky!
Fucking eh, you had 1.5MBPS down and you bitch about that?
You are wholly ungrateful. Whah, you poor baby, you could download a three hour long movie in thirty minutes instead of downloading a three minute video in an hour.
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Free iPad, 8 Apr 2010 @ 6:22pm

I will have you do some updates to the site.

Here’s the video link:

task 1 – replace the text on the main page

task 2 – switch the sign up page and the registration page. The payment page needs to be first, and then the registration page second. Also, replace the text at the top of the payment page where it says “Membership Step 2 of 2” to “Membership Step 1 of 2”

task 3 – insert the new text into the payment page. the text has been attached to this task.

task 4 – I need you to create a basic ‘sign in’ page that people will see after they register. You will put the following text on the site, so they know that is where they sign in:

Congratulations, and welcome to the Prime family! Now that your registration is complete, simply use the login and password you selected to login to the members area now. We’ll see you on the other side!
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Free iPad, 11 Oct 2010 @ 9:39am

You’ve got a really nice site here, I’ve been having a good read! Thanks for all the info, its been a great help. Dan from free iPhone
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