Operators of all stripes are lining up to snag a piece of the $7.2 billion in broadband stimulus funding. But AT&T says the money should be used to fund underserved schools, hospitals and other institutions directly, no service provider required. Is this an anti-competitive move, or altruistic advocacy?
“NTIA – which will distribute the bulk of the Recovery Act’s broadband funding – can achieve the overarching goals of the Act most efficiently and effectively by prioritizing financial support in both unserved and underserved areas to public and non-profit institutions,” Jeff Brueggeman, vice president of public policy at AT&T, told xchange. “By funding ‘anchor institutions’ directly – including hospitals, libraries, schools, community colleges, public-safety organizations, community centers, and even governmental agencies – NTIA will be able to address multiple Recovery Act objectives simultaneously.”
He argued that this approach, with the individual states having a big say in which projects are funded, is the best way to support the creation of a national broadband plan while “continuing to facilitate the tremendous private sector engine of investment and innovation.” That’s because many of these institutions have drawing board- ready projects that are clearly tied to various critical policy goals, such as education, health care, and government and other public services that support vulnerable populations.
For example, a rural health care system could receive grant money to build its own managed IP network for the exchange of real-time medical images between far-flung rural clinics and centralized hospitals.
“In an effort to quickly stimulate the economy and to promote broadband deployment and use by those with limited or no access, Congress recognized that public and nonprofit institutions should be presumptive grant recipients,” Brueggeman said. “We agree that the broadband grants should be prioritized in both unserved and underserved areas to non-profit institutions.
“Direct funding for service providers,” he added, “should be focused to those areas with truly very limited or no access to broadband services.”
A Competitive Stranglehold?
Is this merely a way for the incumbent to argue against giving CLECs a toehold in new areas? Many are looking for funding to build out a competitive service in already served populations. The argument is that broadband might be available, but at astronomical, prohibitive rates.
“Small businesses as a whole are underserved,” explained Tony Hansel, assistant general counsel at Covad Communications. “Free Press cited to Congress that only four percent of small businesses purchase T1s.”
The minimum for business-class broadband, he notes, is a T1. That’s a $720 average cost per month. If businesses need more capacity, say 2MB, that can cost as much as $2,500 where there is nothing but the incumbent offer, he said.
