Skepticism arises over rural broadband stimulus

The stimulus bill provides $7.2 billion for grants, loans and loan guarantees, primarily for areas that lack broadband or are "underserved," though the term is not defined. Some of that money is set aside to expand Internet access at public centers like community colleges and public libraries. But one reason the money may not have much impact is its small size: less than 1 percent of the overall stimulus package, and substantially less per citizen than some countries, like Ireland and Sweden, have spent on improving their networks. The Obama administration is looking at creating a more comprehensive plan to get the whole country covered by broadband, technology adviser Alec Ross told The Washington Post this week, but it's not yet clear if that would mean more subsidies. A possible point of comparison is phone service for rural areas, which has long been subsidized through a program that has critics, too. A study by Robert Crandall of the Brookings Institution said that the program produces customer savings of about $2 per month for $20 in monthly subsidies. But he conceded that when phone service was being built out, subsidies may have helped. Raul Katz, a Columbia Business School professor, estimates that the broadband plan will create 128,000 jobs over four years, because it will put installers and equipment makers to work, and those people will then spend the money they make. He's much less certain how many jobs the Internet access itself will create. It could be as many as 273,000 or closer to zero.