I am glad Congress provided some bailout money for rural broadband. I have been an advocate for rural broadband for some time. In late 2006, I spoke at a Columbia University conference on Rural Broadband. I noted the need for the investment community to get behind rural broadband. I believe the nation will benefit if more people have access to broadband services. I was met with positive reaction from rural community leaders and mockery from the investment community.
Some members of the audience disagreed with my view that telecom investments had been incorrectly treated as dynamic technology investments. My view was and still is that carriers such as Verizon and AT&T need to be viewed as infrastructure providers and hence return on investment timelines and criteria need to be adjusted accordingly. In other words, Verizon and AT&T are long term investments. By treating telecom carriers in this way these carriers would be valued properly and suffer less from the hiccups of the stock market. I had and still support broadband power line communications. I believe that WiMAX is the quick answer to rural broadband. Therefore I was quite pleased to hear that money was provided. Some regulation is necessary. Having survived telecom service failures I understand the need to treat basic voice services (e.g., E9-1-1) as a requirement. If left to the investment community alone, it is doubtful we would see any public safety initiatives. Then if it were not for the investment community’s vision for what the Internet could become there would not have been a dot com revolution. Of course greed and incompetence cratered the dot com revolution and turned it into the dot bomb implosion. In short there must be a balance between government control and private investment. Of course this works when the economy is not cratering as it is today.
The paltry amount provided in the stimulus spending bill provides some incentive to deploy broadband in rural markets. However, rural broadband deployment requires tens of billions of dollars. If you are going to do it, then do it right. More money is needed. Telecom networks are expensive and complicated. It is not like plugging in a plugging in a home telephone into the wall jack.
In the past I have recommended the use of the United States Department of Agriculture (USDA) as a way of distributing funds. The USDA has been lending money for telecom (especially in rural markets) for years. In the last couple of years the USDA has handed out millions of dollars in for rural broadband. According to the USDA, enough money has been distributed to buildout networks in 22 states in 2008 and part of 2009. Don’t be fooled by the term “buildout”, it does not mean “built out to serve everyone”, it means I “built it bigger”. However, I consider the USDA’s efforts all good news. The money recently distributed by the USDA will create jobs and buildout networks critical for growing local economies. On a much larger scale, the USDA Rural Utilities Service (RUS) fund needs to be leveraged and funded in such a way to facilitate telecom growth.
I have stated that telecom/infocom networks are crucial to any economy’s ability to grow. The projects the Rural Utility Service (RUS) has funded are all small projects but together the projects have a great impact on the national economy. This is a case of “the whole is greater than the sum of its parts”. So yes, the work performed to date without the stimulus program has been positive and proactive but more needs to be done.
In 2008, the USDA had lent over $340 Million to broadband projects. The amount is a drop in the bucket by comparison to the tens of billions of dollars spent each year by the large carriers, who don’t really need help from the Federal government. The point I am making is that there is a