Monday, September 20, 2010

USA - Govt has favoured known entities over communities in second round of broadband stimulus funding

[urgent comm] The U.S. government has issued nearly all of the $7.2 billion earmarked for rural broadband loans and grants. And it appears most of the winners are individual companies rather than communities and co-ops, said Craig Settles, head of and one who has been advising and studying the broadband stimulus process.

Early on, the Commerce Department's National Telecommunications and Information Administration (NTIA) and the Department of Agriculture's Rural Utilities Service (RUS) division, the two entities in charge of doling out the money, had indicated that they would place an emphasis on partnerships. Thus, communities and government agencies began banding together to vie for funding. However, these agencies ultimately went with the safe bet given the time constraints that had been established by Congress for awarding the money.

"There ended up being a mindset that the government decided to deal with people it had dealt with before and not worry about the pesky municipalities," Settles said.

That trend tends to be especially true in the second round of funding when it comes to last-mile projects, Settles said. While the first round focused on middle-mile projects put forth by co-ops and municipalities, the second round is focusing more on wireless networks, primarily WiMAX networks, and funding private or public companies in the process.

On Monday, the RUS issued 43 broadband stimulus awards totaling $518 million, which included $800,000 for a WiMAX network in Indiana. Meanwhile, KeyOn Communications received $10.1 million for a WiMAX network in Nevada.

Government entities still won out when it came to the middle-mile and fiber awards. For instance, Lake County, Minn., was awarded $66.4 million for a fiber-to-the-premises network. NTIA also released a list of 35 new awards totaling $482 million, and all were for community anchor, or middle-mile, projects. Two of those awards were significant. The Colorado Centennial Board of Cooperative Educational Services got $100.6 million, while the Connecticut Department of Information Technology received $93.9 million.

Moreover, it appears that the more creative entities got with their applications, the less likely they were to be funded, as these government agencies simply didn't have the time or resources to vet more complex applications. As such, most awards are straight-forward ones, Settles said.

And according to the blog,, the Department of Agriculture rescinded a $19-million award to TierOneConverged Networks earlier this month because the company had been charged with alleged securities violations back in April.

When it comes to broadband grants, familiarity breeds awards

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