February 2009

A growing number of states are putting everything from budgets and contracts to travel expenses online for the public to scrutinize. Twelve states post all their state spending, six post the checkbooks of selected departments, and seven have passed laws ordering the creation of online spending websites, according to Sandra Fabry, executive director of the Center for Fiscal Accountability. The most recent to go online were Kentucky, Georgia and Maryland, which launched in January. An additional 15 are considering legislation, she says. "Taxpayers who fund every expenditure by government have the right to know how their tax dollars are being spent," Fabry says.

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.

In the American Recovery and Reinvestment Act of 2009, recently enacted by Congress, many details regarding the allocation of funds for high-tech projects remain blurry. Nevertheless, the nation's tech community appears to be encouraged by the $7.2 billion provision for broadband. The bureaucracy to allocate the money has not been set up yet, and no one can be absolutely sure exactly how the broadband program will work. Once the National Telecommunications & Information Administration and the Department of Agriculture create a system for distributing stimulus grants, they will work with the various states to outline the states' needs. Industry watchers say that the new law is crucial if some 20 million Americans are to obtain the broadband Internet access they need. In coming weeks, the person appointed as Secretary of Commerce by President Obama will appoint an assistant secretary--and that person will bear primary responsibility for overseeing execution of the broadband provisions.

[Commentary] The federal stimulus package includes more than $4 billion for rural broadband access. That's great news. Plenty of rural communities in North Carolina still don't have access to broadband. Their residents, businesses and prospects are stuck in the age of dial-up. Upgrading those connections is an urgent public need. Yet we're poised to decide where to spend those precious dollars for rural broadband based on maps we let telecommunications companies draw - at public expense. That's nuts. The problem is, there is no precise grid in North Carolina (and most states) showing the areas broadband is and is not available. A bigger problem: The cable and telephone companies are tight-fisted with specifics about the level and location of service. They are not regulated as public utilities in North Carolina, so nothing says they have to release that data. And when they do, there's no way to check its accuracy. A bigger problem still: The stimulus package includes $340 million for nationwide broadband mapping. But there's a move to put the mapping for where service is needed in the hands of Connected Nation, a company representing big telecommunications companies. We're going to spend millions in public stimulus money on a hard-to-address public need based on information gathered by secretive companies who are protecting their proprietary interests? And, by the way, companies who stand to gain from these new connections? Broadband is the gold standard in education, medicine and economic development. It's the equivalent of a 16-lane interstate in a global economy. North Carolina has a shot at a few dollars to put some of its most underserved communities on that powerful highway. But will that money be wasted because we use biased information to decide where?