ACA, IBM make plays for broadband bucks
With the stimulus bill passed, the next stage is jockeying for some of the money therein. The bill includes an initial $7.2 billion for broadband programs, largely for extending service to unserved and underserved areas.
The American Cable Association (ACA) reiterated a pitch that its members are in prime position to achieve the goals of the bill, and IBM threw its hat in the ring with an announcement that it is helping several rural co-ops provide broadband over power line (BPL) services.
The $7.2 billion in the stimulus bill, formally designated the American Recovery and Reinvestment Act (H.R. 1), dedicated to broadband will be distributed in the form of grants and loans by the Departments of Commerce and Agriculture.
IBM and International Broadband Electric Communications (IBEC) announced that they’re helping to build BPL networks for seven electrical cooperatives in Alabama, Indiana, Michigan and Virginia.
The seven co-ops are Cullman Electric Cooperative in Alabama; Utilities District of Western Indiana REMC, Parke Country REMC and South Central REMC in Indiana; Midwest Energy Cooperative in Michigan; and BARC Electric Cooperative and Central Virginia Electric Cooperative in Virginia. Together, these seven serve nearly 200,000 rural customers.
IBM and IBC calculate that there are nearly 900 electric cooperatives in the United States providing 45 percent of the total electric grid and covering 75 percent of the land mass in the U.S.
The pair let someone else make the case for demand, quoting Bob Hance, CEO of Midwest Energy Cooperative in Michigan, who had conducted a customer survey to determine if there was interest in broadband Internet services. Within a week, the cooperative had a waiting list of 4,000 customers asking for service.
"We were amazed by the responses to the survey,” Hance said, “thousands of letters from citizens of our community expressing their need for broadband in order to improve everything from childhood education to the future of their family owned small businesses. We shared nearly 600 of these letters with local legislators after we realized none of the major service providers were going to answer their calls for help. Thanks to the help of those legislators, IBM and IBEC were able to access the resources needed to help our community. In less than two weeks, we've already deployed 400 live miles with broadband access, or nearly 4,000 homes.”
IBM makes the claim that it’s the first major systems integrator to support BPL installation.
ACA President and CEO Matthew M. Polka, meanwhile, continued to bang the drum for smaller cable operators. “Funding broadband programs will enable small- and medium-sized cable operators, who have already invested significant private capital into their communities, to receive funds to invest in the infrastructure improvements necessary to offer more advanced broadband services. We look forward to working with both the Commerce and Agriculture Departments to make sure all entities, regardless of technology, can put these funds to work for the American people.”
The Department of Commerce's National Telecommunications and Information Administration (NTIA) will administer $4.7 billion in grants, and the Department of Agriculture's Rural Utilities Service (RUS) will administer $2.5 billion in grants and loans. The bill gives both agencies various mandates but empowers them with a great deal of discretion regarding spending in pursuit of those mandates. The economic stimulus package, which was passed by the House and Senate on Feb. 13, did not contain any broadband tax credits.
It is well within the realm of possibility that the stimulus bill is only the beginning of the Obama administration’s moves to steer more federal funds into encouraging broadband expansion. The stimulus bill directs the FCC to create a formal broadband policy by February of next year (story here). Several courses of action the FCC is compelled to investigate seem as if they would require some seed money, at a minimum.
Meanwhile, the stimulus bill also directed some $650 million toward the digital transition, part of which can be used to replenish the government’s program to provide coupons to defray the cost of analog converter boxes that will convert digital broadcast TV signals to analog, thus allowing consumers to continue using their old TVs. The Commerce Department, which manages the coupon program, expects it will be able to get coupons to the 4 million people on the backlog list within two to three weeks.