Posts Tagged ‘broadband’

Fresh Hope for Broadband: 4 States to Apply for Stimulus Funds

April 16, 2009

Today, Arik Hesseldahl and I broke some news on the broadband beat. Colorado, Ohio, Tennessee, and Virginia are all aggressively going after some of the $7.2 billion being handed out by the federal government as part of the stimulus program.

Here’s the top of our story.

On the campaign trail and in the White House, President Barack Obama has embraced the idea of providing high-speed Internet access to every community in America. But the plans for universal broadband have gotten off to a rocky start. Some technology executives complain that the $7.2 billion allocated in the federal stimulus plan isn’t half the amount needed to do the job. Telecom companies, including AT&T (T) and Verizon Communications (VZ), are so wary of the program’s potentially onerous rules—the strings that usually come attached with federal money—that they may sit out the first round of grants.

Now, the Obama Administration’s broadband plan looks to be getting a new group of unexpected partners: state and local governments eager to play a leading role in bringing fast Internet connections to the nooks and crannies of the American landscape. Colorado, Ohio, Tennessee, and Virginia are planning to seek broadband stimulus money, BusinessWeek has learned. Tennessee says it expects to receive as much as $150 million in broadband grants.

Click here to read the rest of the story.


Obama’s $8 Billion Broadband Stimulus: Opportunity or Risk for Big Telecom?

March 23, 2009

Check out the new video I shot about the $8 billion Obama broadband stimulus and what it means for the nation’s largest telecom companies such as AT&T, Verizon Communications and Qwest. I shot it in preparation for the big online Web video project launching in late April. Hopefully I can tell you more about this very soon. But in the meantime, please enjoy the video!

Secrets of Big Telco: Why They Are Not Lining Up for Obama’s Broadband Plan

March 17, 2009

Today, BusinessWeek published a story written by Arik Hesseldahl and I, “Big Telcos Drag Their Heels on Broadband Stimulus.”

It reveals for the first time why some of the major telecom companies are dragging their heels on asking for federal money, and includes text from a letter we obtained from industry trade group, USTelecom (see it below).

Here’s the top of the story:
Big Telcos Drag Their Heels on Broadband Stimulus
Telecom giants are concerned that Washington’s $8 billion plan to promote broadband access will force them to open their networks to other providers

As Washington prepares to dole out some $8 billion to promote the spread of broadband access, don’t expect Big Telco to rush to the front of the line.

Some of the largest U.S. telecom operators, including AT&T (T), Verizon Communications (VZ), and Qwest Communications International (Q), are dragging their heels on asking for federal money. Some may sit out early funding rounds entirely or ultimately ask for only a sliver of the total.

Telecom giants are concerned that once finalized, the program will include burdensome regulations that will force them to open their equipment to rivals or otherwise hamper their ability to manage broadband networks, according to three people familiar with the thinking of the big service providers.

That sentiment was captured in a Mar. 16 letter sent by industry group USTelecom to the Commerce and Agriculture Depts. and the Federal Communications Commission. In the letter, which was obtained by BusinessWeek, the group urged government officials to not let the broadband stimulus get mired down in contentious policy debates. “The agencies should not try to impose other requirements on grantees as part of this process,” wrote USTelecom CEO Walter McCormick.

Click here to read the entire letter.

Replay of Facebook Discussion; Is Broadband a Right?

January 20, 2009

Yesterday, a heated discussion broke out on my Facebook page in reference to the broadband story that I posted, with comments from New York Software Industry Association president Bruce Bernstein.

The conversation turned on the question of whether or not broadband could be considered a “right” or a “social good” or “public good.” This is a key question as the Obama Admin. considers how much money to spend on promoting affordable high-speed Internet access for all Americans.

Check out the dialogue and chime in with your own two cents.

Spencer wonders if Obama dropped the ball on broadband. The Feds bill nearly disappoints everyone. 10:52am – Comment

Bruce Bernstein at 11:02am January 17
Spencer, “disappoints everyone” is simply not accurate. As your article points out, rural broadband advocates seem to be happy with it.

Christopher Hartman at 11:24am January 17
I guess the real question is … is broadband access a right or a privilege? Having come from a rural area, I know firsthand that not having high speed internet available (or available for an exhoribant fee) is a major inconvenience. Spencer, if I understand correctly, major broadband providers are balking at “leasing” discount access to rural providers. That’s a business decision, I’m aware; but speaking purely from the standpoint of social responsibility, I believe it’s the wrong one. How expensive is it for these companies to grant access to their network? Doesn’t seem like it would be THAT costly … but nicely done article! By the way, I scanned a discussion of this in the most recent issue of Business Week.

Laurence Zuriff at 11:35am January 17
Broadbad access is not a right. It comes at a cost that must be born by someone, either the customer, the business that provides it or tax payers. The biggest problem with bband access in rural areas is distance to the head end for cable providers because there is so little concentration the cost of service are not amortized over a wide enough pool to make it cost acceptable. DSL simply doesnt work as you move beyond a fixed distance from the central office. Business will not absorb the loss it will simply pass the cost on to all consumers.

Bruce Bernstein at 12:03pm January 17
just because something “comes at a cost the must be born by someone” doesn’t mean it is not a right. for example, is police protection a right? many people (including myself) argue that health care is a right, or education. or what about postal service?

Christopher Hartman at 12:25pm January 17
I believe very much in free market principles; but access to the internet is rapidly becoming a (if not THE) key component in social mobility – if it’s not there already. Do private corporations have a social obligation in this sense? In today’s economy, where everyone is suffering, poor urban and rural citizens are doing so disproportionately. I think the government should take the lead in rewarding companies who undertake initiatives to improve the quality of rural life (tax forgiveness?) – with broadband being a central component in such a strategy. However, I also wish the federal government wouldn’t tax this service so much. That’s very unfortunate.

Bruce Bernstein at 12:32pm January 17
is electricity a right? “someone” had to pay for the build-out. what about modern paved roads?

Laurence Zuriff at 12:55pm January 17
no it not a right. you pay for it. it becomes a public good over time. a right is something you have and dont have to pay for. The government may decide to susidize it but that doesnt make it a right.

Laurence Zuriff at 12:59pm January 17
for instance. we all have a right to free speech but the government or business is not obligated to pay for the broadcast of that speech. Nothing does more damage to long term economic growth than the constant expansion of “rights.” You have a right to live where ever you want, but that does not obligate the government to subsidize the exercise of that right.

Bruce Bernstein at 1:10pm January 17
electrification in rural areas was heavily subsidized by the government. that was one of the great accomplishments of the New Deal. check out the history of the TVA.

the taxpayer subsidized the rural citizens to give them electricity. the taxpayer subsidizes YOU to give you roads. the same can eb done with rural broadband.

nothing does more damage to long term economic growth than market fundamentalism.

Laurence Zuriff at 1:14pm January 17
I think you confuse public good with right. A right is something that cannot be denied by the state. A public good is something the state has decided to pay for because it benefits the common good. Roads are both public goods and private. health care is both public and private. The right to equal protection under the law is universal and cannot be denied to any citizen.

Spencer Ante at 1:23pm January 17
Wow, guess everyone had their coffee this morning. Very interesting debate going on here. Here’s my two cents: I agree with Chris and Bruce that broadband access has become an essential service for today’s citizenry. However, I also agree with Laurence that to date that the cost of Internet service has been largely born by the private sector.

Now, we as a nation seem to be entering a new phase of the Internet where the government is deciding that it has become a public good worthy of subsidizing, much like Eisenhower backing the government creation of the interstate highway system.

So the key, it seems to me, is to structure the subsidies in a way that don’t alienate the existing private sector investments. After all, corporations are going to be the entities that actually build the new broadband lines–with government funding. So we need the participation of the private sector in order to reach universal broadband quickly and efficiently.

Spencer Ante at 1:26pm January 17
One other interesting wrinkle: will the Obama Admin. also try to pursue another policy goal of injecting more competition into the broadband market through these subsidies? A lot of companies/folks are lobbying the government to do so, such as Google, Intel, etc.

Spencer Ante at 1:34pm January 17
Bruce: my headline should have said: the bill disappoints nearly everyone (except the rural advocates, as you mentioned).

One last question: Does anyone know why broadband got shafted in this bill? Given the high priority Obama placed on universal broadband and the existing estimates that it would take tens of billions, you’d think the House Dems would allocated more than $6 billion.

Heck, the so-called smart grid technology got $32 billion, while other infrastructure projects (rails, water, roads) got close to $100 billion. I heard Larry Summers may have been behind this but I am not sure.

Link to breakdown:

Laurence Zuriff at 2:22pm January 17
I have a guess on this issue. But its only a guess. Smart grid is absolutely essential to move into a green friendly energy infrastructure. Rail, water and road spending is immediately noticeable by a large swath of the public and legislators can show up and cut ribbons. It also generates a lot more jobs immediately than either smart grid or bband. BBand is mainly an issue in rural areas without access to cable or too far from a co for dsl. Rural areas tend to be RED areas, they are not the winners these days. Again i am speculating.

Bruce Bernstein at 5:30pm January 17
Laurence, I think you are mistaking the term “social good” for “public good”, at least if wikipedia’s article on “public good” is correct.

The idea of “economic rights” is not a new one. It is ironic that you are dismissing the idea on the MLK holiday. MLK’s last campaign, the “Poor People’s Campaign”, was built around an Economic Bill of Rights.

Spencer, aren’t the rural advocates the most important people here, as they represent the CONSUMERS of the new broadband? Your article showed that the bill disappointed industry advocates and (possibly) Atkinson from ITIF. The only consumer advocates interviewed were happy with the bill.

I personally am not making a judgment at this time. The industry people say tax credits would get the process going, and thus create economic stimulus, faster. This claim should be examined.

Bruce Bernstein at 5:32pm January 17
One more point: Spencer, I am not convinced that private industry is the ONLY or in all cases the best way to get broadband to rural areas. Perhaps not for profits or public/private authorities would do a better job. Once again, the TVA is an example.

Thanks very much for writing this article and bringing this issue to everyone’s attention.

Tim Akin at 6:56pm January 17
Spence, if the economy wasn’t in the tank and a $850 billion stimulus bill up for approval, would Congress allocated more or less than $6 billion? Sounds like a good chunk of change to me, and better than nothing.

Laurence Zuriff at 9:31pm January 17
Just because MLK had an idea doesn’t mean it is correct. To me, rights are things which we possess as human beings which the state cannot deny us. Rights are expressly articulated in the constitution. Entitlements are things the state determines we have a right to recieve or obliations to pay. Univeral health care is an entitlement not a right. So would broadband or electric utility. It is a core of my belief that if we have a” right” to everything we will have nothing. Too many people throw around the word “rights” to mean they think they deserve something they do not have and demand that someone give it to them. That doesn’t mean we can’t petition the government to provide a service, paid for by others, that we think benefits the whole. But the more we ask the government to do for us the more dependednt to that government we become. The more powerful the government becomes and the less free we become.

Bruce Bernstein at 1:54am January 18
I am willing to debate your philisophy but I don’t think Spencer’s page nor this thread is the proper place to do it.

Laurence Zuriff at 7:50am January 18
fair enough

Spencer Ante at 5:13pm January 18
Tim, as Art Brodsky from Public Knowledge said to me, $6 billion is nothing to sneeze at. And it will probably do a lot of good. However, most folks would agree that universal broadband would require an investment of at least $12 to $20 billion (as I discuss in the story).

Bruce: I agree that rural folks who have no access to Internet service should be at the front of the line. For both economic AND moral/societal reasons.

As for the role of private industry, I also agree that there should be room for other players in the broadband industry, such as non-profits or hybrid groups. But my hunch is that big corporations will nevertheless play a central role–because they have the reach and resources to make a a big difference quickly. Interestingly, Qwest, which is very interested in providing bband to rural areas, was critical of the bill as well.

Feds Broadband Bill Disappoints Nearly Everyone

January 17, 2009

Last night, BusinessWeek published a story I co-wrote with my colleague Arik Hesseldahl about the broadband stimulus measures contained in the $825 billion stimulus package released by the House Democrats. The story, Broadband Bill Disappoints Nearly Everyone, is already generating a heated debate on my Facebook page so I thought I’d post the beginning of it here to see if anyone wants to add to the discussion.

Broadband Bill Disappoints Nearly Everyone
Critics say there’s not enough money in the bill and that distributing funds through grants instead of tax credits will hamper job creation

By Spencer E. Ante and Arik Hesseldahl

The initial stab by the U.S. government to promote high-speed Internet access has something to disappoint nearly everyone.

Most communications companies and consumer advocacy groups say the $6 billion in broadband stimulus measures contained in the House Democrats’ $825 billion economic recovery package are a good first step. But they warn that the money won’t be nearly sufficient to meet incoming President Barack Obama’s objective of providing affordable high-speed Internet access to all U.S. households.

“I was incredibly impressed how quickly the House moved,” says Shirley Bloomfield, senior vice-president for federal relations at Qwest Communications (Q), a Denver-based communications provider that serves 14 Western states. “They’ve got some good concepts. But $6 billion is not going to get you to ubiquitous broadband.”

Communications providers and various advocacy groups have pegged the cost of creating universal broadband in the tens of billions of dollars. A December 2008 report by the Free Press, an organization devoted to reforming the media, estimated that a broadband infrastructure development program would cost $44 billion over three years. Similarly, the Information Technology & Innovation Foundation (ITIF), a Washington (D.C.) think tank, projected that providing Internet service to much of the unserved territories in the U.S. would cost about $12 billion. “It’s definitely not enough money,” says Robert Atkinson, founder of the ITIF.

Read the rest of the story here.