California: the state is looking for US$ 1 Bn to tackle the digital divide, since 45% of Californian have no home broadband

[Sacramento Bee] The good news is that 96 percent of California's households have access to a high-speed Internet connection.

The bad news is that despite the good news, 45 percent of California residents – a number greater than the populations of all but five states – still don't have broadband connections in their homes because of geography, disabilities, a lack of English language skills or poverty.

Now the promising news: The state is poised to grab as much as $1 billion in federal stimulus money for closing what's referred to as a "digital divide" between Internet haves and have-nots.

"The importance of closing that gap is almost incalculable," said Sunne Wright McPeak, president and CEO of the California Emerging Technology Fund (CETF), a nonprofit underwritten by four merged phone companies to oversee one effort to expand the use of broadband.

"Whether it's health care or education or a host of other aspects of life, broadband (high-speed) access is vital to virtually every person in California."

The money that the state is poised to grab is part of $7.2 billion that was included in the American Recovery and Reinvestment Act passed by Congress in February. The money was dedicated to the simple proposition that getting as many Americans as possible hooked up – at high speeds – to the Internet is a good idea.

The federal money could be spent in a variety of ways: for construction of both wired and "wireless" Internet-access systems; for connection projects aimed at specific groups, such as senior citizens or patrons of public libraries; to subsidize access fees for low- income users; and for education and outreach programs designed to impress the Internet's importance on groups that currently don't use it much.

But like so much of the stimulus package, the promise is shrouded with complex uncertainties:

• Distribution of the money is being overseen by three separate federal agencies – the Federal Communications Commission, the Department of Food and Agriculture and the National Telecommunications and Information Administration – each of which is responsible for different aspects of the program. That complicates the process.

• Basic terms, such as what denotes an "unserved" or "underserved" community, or what constitutes "high-speed" service, have yet to be defined, although more than 1,400 versions have been submitted by various interested parties.

• Because the rules for applying have yet to be drawn up, applicants ranging from states to small nonprofit groups (as many as 100-plus in California alone) aren't sure whether it's best to band together or try to make one's own separate case for a portion of the money.

"It's a somewhat messy process," acknowledged McPeak, whose group is one of those attempting to coordinate California's efforts. "We don't know how they plan to review (applications) or distribute.

"We're prepared for there to be a call for (application) proposals in June, with a turnaround that could be as short as two weeks."

McPeak's organization reflects a fortuitous situation, (and one that's relatively rare in California): State officials were already actively addressing the issue and were ready to jump on the prospect of federal funds that could stretch state funds already allocated to such efforts.

In 2005, the California Public Utilities Commission extracted $60 million from major telecommunications companies and established the California Emerging Technology Fund.

The CETF was ordered to use the funds as seed money for programs that would extend high-speed Internet access to rural communities that commercial carriers regarded as not worth the cost of hooking up, and urban areas dominated by low-income residents who were less likely to avail themselves of available broadband services.

A similar $100 million program, called the California Advanced Services Fund, was authorized by the PUC in 2007.

State officials believe they can make a case for $1 billion of the $7.2 billion in federal funds because of the state's population (around 12 percent of the U.S. total) and because California already has the two programs, as well as extensive mapping of served and unserved areas already in place.

State seeks $1 billion in stimulus funds to bring broadband link to every household