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December 30, 2008

Federal Broadband Money Should Go To States

The carriers and cablecos are hard at work trying to influence the broadband portion of the Obama stimulus package according to an article by Amol Sharma in today's Wall Street Journal. That's no surprise, of course, and their lobbyists are just doing what they're paid to do. But it would be a terrible mistake to have any of this money strengthen the duopoly whose uncompetitive nature has resulted in the US slipping from fourth to fifteenth place in broadband deployment since 2001.

The money should be given to the states with a requirement for state matching funds to assure that the states only spend federal dollars where they are willing to put some of their own very limited money. The allocation to the states ought to be similar to the allocation of federal highway funds which takes into account both population and the higher cost per capita of building infrastructure in rural areas. There should be no earmarks or congressionally-mandated "demonstration" projects. (Obama spokespeople have already promised no earmarks in the stimulus package. If Congress goes along, that will be change that I can believe in.) In 1981 and 1982 I was Secretary of Transportation in Vermont and saw firsthand both the strengths and the limitations of the federal highway program including the damage done to local planning by earmarks..

There should be very little restriction on the funds other than that they be used to build backbone and middle mile infrastructure open for any legal use by wholesale and retail providers as well as commercial users (like the highway system but with tolls). It should not be permissible for the funds to be used to have the states themselves become retail ISPs (too much big brother potential). However, separately, universal funding should be reformed and made available to the needy in order to allow them to purchase connectivity services from providers of their choice.

The states don't own the equipment to build infrastructure any more than they own the equipment to build highways: they will contract with the private sector for building and possibly operating infrastructure. They may buy or lease existing infrastructure from the carriers and cable companies that have built it; they may simply decide that in some areas there is already sufficient backbone and middle mile so that they don't have to spend any money.

The federal money should not mandate whether fiber, radio, or other technology is used to provide the needed facilities. The states'll figure that out on their own and have the opportunity to build infrastructure appropriate to their own needs. States should assure that any roadwork they do with federal highway money includes conduit for fiber whether the fiber is placed in the conduits now or not. Federal money spent to improve the electrical grid should have the proviso that high capacity fiber is part of the build.

Here in Vermont the legislature has authorized forty million dollars of state revenue bonding for communication infrastructure. The Vermont Telecommunications Authority (VTA) has already issued an RFI so that carriers and others can help shape the process of putting together the infrastructure improvements we need in Vermont. We'll go ahead with or without federal help but we'll do more faster if there is a federal allocation. On our own, we'll give Vermont equal or better telecommunications to any other state in the US; with federal money we could be part of a plan to raise the standard for the whole country so that America again leads the world in Internet quality and availability.

Full disclosure: My wife, Mary, is Chair of the VTA (a volunteer position) and I also volunteer doing odd jobs for that organization. We have a personal although not a financial stake in the success of this program. The opinions in this blog, however, are mine alone and are neither approved by or attributable to any organization.

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