Telecoms May Balk At Strings Attached To Stimulus Funds

The National Telecommunications and Information Administration (a part of the Department of Commerce ) will dole out $4.7 billion in broadband grants and loans, and the Rural Utilities Service (part of the Department of Agriculture will distribute $2.5 billion in grants, loans and loan guarantees. The agencies are hashing out the details now, with an announcement to come in the next month or two. Some there's a real possibility key media corporations could sit the program out, or not participate as heavily as expected. But Larry Irving, who ran NTIA during the Clinton administration, noted that the agency's previous grants have usually gone to municipalities, nonprofits and states that often partnered with companies. "There's no real reason for me to believe that this would be markedly different," said Irving, adding that the RUS historically has favored the private sector with its federal assistance. Given the short time frame for crafting parameters, the litigation risks and the possibility that some companies might balk at applying, "there will be an attempt by everyone to come up with something that makes some sense," said Irving, who advised the Obama campaign and transition team. "There are existing regulatory models that can be bootstrapped for purposes of these grants," he said, adding that an exhaustive new rulemaking -- which would probably be required to strengthen existing regulations -- is unlikely. A source close to the process agreed, saying, "It's really hard to make major policy pronouncements in this context where you're trying to get money out the door fast." Irving also expects demand for funding to exceed availability, blunting the impact of any companies that take a pass.