Originally published: October 22, 2009
Last updated: October 22, 2009 - 7:27pm
[Commentary] The $7.2 billion in Broadband Stimulus prize money in the American Recovery and Reinvestment Act of 2009 (ARRA) is creating quite a buzz around the telecom race track. The blogs are atwitter with a lot of speculation, but nobody knows if they've bet on the right horse. The first Round 1 winners are to be announced on November 7.
The Rural Utilities Service (RUS) Broadband Initiative Program (BIP) has a $2.5 billion appropriation that will be disbursed in the form of loans and loan guarantees, grants or loan/grant combinations. Established rural telcos are the favorites in this race. Many rural telcos won Advanced Wireless Services (AWS) and 700 MHz licenses in recent FCC spectrum auctions, and want to use BIP funds to build them out. Regional wireless carriers, small cable operators and wireless ISPs with AWS/700 MHz licenses or authorizations for unlicensed band operation will also place high. Wireless infrastructure is faster to market, with lower costs per subscriber, than most wired solutions. Beyond that, new companies proposing large geographic coverage to millions of POPs are strong contenders, especially if they are asking for a big loan versus a grant.
The National Telecommunications and Information Administration (NTIA) Broadband Technology Opportunity Program (BTOP) will hand out $4.7 billion in the form of grants. BTOP favors projects that offer clear socio-economic benefits for disadvantaged businesses and residents, are relevant to the overall goal, are technically feasible and financially viable, can meet the timelines, and create a lift for the local economy. Since the Federal government wants to spread the wealth, there will be at least one award in every state.That said, State governments can tip the odds towards their favorites ahead of the BIP/BTOP final selections. Many BTOP projects are government- and nonprofit-run broadband networks, or public-private partnerships that have local or state governments as the dominant partner. Most of these projects will be funded with BTOP grants in metro and suburban underserved areas as opposed to unserved rural areas that BIP addresses. The BTOP pot is almost twice the size of the BIP budget. So we might see more projects in the public sector than with private operators.
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- NTIA, RUS Announce Final Round of Broadband Stimulus Funding
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- Sens Call for Speed, Fraud Protection in Stimulus Spending
- Short-Staffed Local Governments Struggle with Stimulus Grants
- Let's Get to Work on the Purposes of the NTIA Broadband Grant Program
- What the broadband stimulus package means to rural telcos
- NTIA three months behind on broadband grant distribution, GAO says
- Further Opportunities Exist to Strengthen Oversight of Broadband Stimulus Programs
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