In the words of president Barak Obama, “There you go, it’s done,” signaling that the broadband stimulus program is official. Now comes the fun part – divvying up the $7.2 billion earmarked for rural broadband construction. It’s going to be interesting to watch as traditional wireline telcos, cable companies, and wireless providers line up to take advantage of the grants. “Funding broadband programs will enable small and medium-sized cable operators, who have already invested significant private capital into their communities, to receive funds to invest in the infrastructure improvements necessary to offer more advanced broadband services,” said Matt Polka, president of the American Cable Association, a trade group representing small cable companies. Wireless carriers are also interested in pursuing the funding. William Wallace, chairman of DigitalBridge Communications, a rural WiMAX operator told us, “We view the stimulus plan as a very strong growth opportunity for DBC,” indicating their intention to use it for ‘shovel-ready’ projects.
The inclusion of NTIA as the administrator of majority of the stimulus money, to the tune of $4.5 billion, is probably a plus for both cable and wireless carriers. The other agency responsible for managing the program, the Rural Utility Service, has a much more historical bent towards traditional rural telcos. Although they would probably argue that’s changing. More than likely, this program represents a ‘new day’ in funding of telecom projects with government sponsored money. Historically, these programs have largely flowed to traditional telecom carriers. Bigger telcos like Qwest are also in the stimulus mix. But cable and wireless now wield some pretty powerful influence, albeit lesser than the telecom lobby, themselves. They have every intention of securing as much of this funding as possible, and growing their broadband footprints, and consequently, their competitive prowess.