Should Economic Stimulus Include Billions for Broadband?

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The US House and Senate will soon begin final negotiations on the Economic Stimulus package. Given the massive size of this legislation, it may be easy to overlook the nearly $7 billion dollars included for broadband build out. The recently passed Senate version of the bill allocates at least 50% of those funds to expanding broadband access to rural parts of the country still heavily reliant on dial up connections.

However, as with many parts of the stimulus package – the questions remain:

#1 – How many jobs can/will be created by an initiative like this?

#2 – How quickly can these projects begin?

#3 – Once available, how many will actually sign up to use these new networks?

#4 – How far will increased broadband access go in stimulating the economy?

Outside of the interest groups that stand to directly benefit from this legislation – no one seems able or willing to answer these questions with any degree of confidence. Nevertheless, Washington appears ready to include broadband expansion in its nearly trillion dollar – roll of the dice.

UPDATE:

The American Recovery and Reinvestment Act of 2009

Notes:

LA Times: Crafting the broadband provision of the stimulus involved plenty of networking

Saul Hansell NY Times 1/21/2009
Does Broadband Need a Stimulus?

Stacey Higginbotham GigaOm 2/10/2009
How the Stimulus Package Fails Rural Broadband

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17 thoughts on “Should Economic Stimulus Include Billions for Broadband?

  1. There is a crisis with bank credit. Spending packages don’t address this, and the evidence is that they don’t add to economic growth. Government-funded projects of any form are wealth-destroying unless the return on them exceeds the opportunity cost (the highest risk-related rate of return on alternative uses of funds, inclduing tax cuts). Most “splash-the-cash” projects, including rural broadband, will be non-viable. The longer term impact of “stimulus” packages is higher interest and tax rates and slower growth. If money is going to be thrown around, it should be in ways designed to have longer term pay-offs, e.g. by leading to higher productivity. In Australia, current government handouts are aimed at increasing consumption of (mostly imported) goods rather than, e.g., addressing the welfare-to-work tax and benefits system which encourages people to stay on welfare. Billions have been offered to GM (which may go bankrupt anyway) to continue producing non-viable cars in Australia. Wise? Daft? You be the judge.

  2. After 38 years with AT&T I feel that to develop anything close to real broadband speeds to rural areas will require many times over the $7 Billion in the proposal. Market driven choices generally work better and cheaper as those decisions are market driven instead of burecrat driven.

  3. This project will provide jobs, and good ones, and be an asset to mid American businesses. It is easy to think of this service as running along an old dirt road to someones farm house, but it is greatly more expansive than that. The real problem is: what kind of broadband? Are we talking about running fiber optic cable down every street in America? If so, I vote, yes, when do we start.

  4. After 33 years in the telecommunications industry, am I the only one that knows that if there isn’t any electricty none of this works! What the money should be spent on is, buring as much of the aerial plant (facilities) that can be done and building an underground manhole system. Then all the utilities are protected and assures continued service.

  5. i am already on broad band. but some months its a toss up between broadband fees and dial up fees.. so far broadband wins hands down.i think if uncle sam really wants the nation to move more towards broadband there should be a level of fees so that about everyone could afford it , thus creating a job market that is solid. Once a person uses broad band for a day they hate their dialup. so yes broad band would create jobs, either by independant contractors or hourly people working for the servers..

  6. Since when has Pit Stop gone political? I live in a rural area and know the frustrations of dial up internet access nd erratic cell phone service. Many folk and businesses would be attracted to our area if broadband were available.
    The Stimulus package is no panacea for long term solutions but sure beats just throwing money out in hopes that good will come for infrastructure needs long neglected to pay for wars we cannot win!

  7. I usually don’t bother reading these consumer comments because they always always always have the screaming dittoheads. This time I was lured in by the insightful comments of actual thinkers.

    The good thing about dittoheads is that they always identify themselves, if not with a lack of grammar skills, then some calling card like “Crapulus Bill” or “B. Hussein Obama.” So you don’t have to cringe through the rest of the prefabricated diatribe unless you want to.

  8. Shocked. Shocked I say…
    To find out that even *any* of your readers think anything good of the idea.
    Last time I read one of the diatribes here, the dittoheads were out in force, shapening their crainiums to a fine point.
    There is hope for America yet.
    Yes, there is a chance we might make it.
    There is also a chance we might not.
    The thing about America is, we’ve never been afraid to try.

    So, rather than wonder about why it’s ok to dump hundreds of billions of ‘unaccounted for’ down the rathole of Wall Street, and NOT ok to try and dump directly it INTO the economy, with accounting oversite this time, the way the dittoheads in Congress seem devided now, I just hope, and continue to spend my paychecks on durable goods.
    I’ll even buy stuff made here, in the U.S., if I can find it.
    I’ve spent more in the last 8 months on these Items than ever before at anytime in my life.

    If you value the opinions of a magazine, or newspaper, if you were thinking about a washing mashine or dishwasher, microwave or toaster, if you need some new tools or new computer equipment, anything, do it now.

    Your jobs may depend on it.

  9. Rural people had to wait decades to get electricity to their homes. Private companies had no interest in bringing electric lines to the sparsely populated areas.

    It was the creation of the REC in the 1930’s that allowed rural people to turn on a light, an electric pump, or other machines at their home or farm.

    I started a Wireless Internet Service Provider (WISP)in 2004 in my rural county in Iowa and sold it in 2008 at a loss because of frequent problems with lightning.

    My customers loved getting off of dial up. Unfortunately, I could not reach many people who wanted my service because they were located too far from my access point, or they were in a valley. It is very expensive to install enough access points to reach even 60% of potential customers in areas of rolling terrain.

  10. Despite what B. Hussein Obama says, there are hundreds, if not thousands, of economists who feel this entire “stimulul” bill is a big mistake. I welcome increased access to broadband for Americans in rural areas, but feel it is coming at too high a cost. One of the differences between the U.S. and Middle Eastern countries is that our economy is market-driven. When there is enough demand for rural broadband, someone will build it with private dollars looking for profit. To have the government in the business of building broadband infrastructure construction is ridiculous. This bill is taking us down the road to socialism and we will become like the Middle Eastern countries where their citizens don’t have the freedoms we have. The government makes all their decisions for them. Is that what we Americans really want?

    Consider that in this bill are hidden several things that will make most people really angry when they find out about them.
    (1) Anti-faith provisions. Any building with any federal dollars will no longer be able to host any religious meetings – Bible clubs, worship services, Fellowship of Christian Athletes, etc.
    (2) Promotion of abortion through increased funding of the abortion mills known as “Planned Parenthood”, plus sending millions of our tax dollars overseas to fund abortions.
    (3) Increased funding of groups whose sole purpose is pushing socialistic ideas and policies.
    (4) A soon-to-be-named “Health Czar” will be able to tell your doctor whether or not the treatment he wants you to have can be administered or not. He may tell your father or grandfather (or you) that he has lived a full life and at 75 is no longer eligible for procedures or medicine that will prolong his life. This is furtherance of the push to socialized medicine that was slipped into the “stimulus” bill. Do we really want to have a system similar to Canada’s or England’s or any other country with socialized medicine? Do we really want to wait in line for months to have life-saving tests administered? Do we really want the good doctors in our country to flee to another country to practice medicine so they can make a living?

    Those are just a few of the heinous provisions in the stimulus bill. Perhaps some will be taken out by the conference committee, but as a previous writer mentioned, we won’t be able to see the bill until it is signed by the president, in spite of his campaign promises to the contrary. Hussein O. is as honest and virtuous as most of the convicts on death row.

    Oh for a President that was really looking for the best interests of Americans instead of his own glory and future kingship.

  11. You have got to be kidding, anyone that knows anything about this massive Crapulus Bill knows its BS only 4% is stimulative the rest is pet projects ie pork.

    This article should let peole know that Democrats made promised that the bill would be able ot be seen 48 hrs before its voted. Then broke there promise.
    30% of this pork is slated to be spent 2010 imagine that election year!!
    The only thing this will gurantee is that will be futher into debt. Can you say inflation?

  12. I think it’s a great idea. Business now relies heavily on the ability of IT to make commerce possible, and by providing this crucial connection, businesses can grow in rural areas, helping to make these areas, which sometimes tend to be forgotten, a prosperous place. My business is in a small town, and I know even for most of our clients, broadband would be a great benefit to their business.

  13. This will directly affect my business in a positive way. I will be able to expand it further. For years I ran my eBay business on dial-up but could only go so far. Right now I’m on satellite internet which is a great increase over dial up. Larger ping times and any use of any encrypted webpages (https:) is still painfully slow. This applies to any bank or payment collection sites and even purchasing of online shipping and postage services. I can save money by printing postage online but the time it takes to do so is not worth it. It’s easier just to buy it right at the post office at full price rather than wasting time printing them online.

    It always amazed me how the terrorist groups in Afghanistan and or Iraq could have suitable internet to upload their videos of there dastardly deeds but I couldn’t get descent high speed internet to run a legitimate business right here in the US. Finally we have an administration that is looking far down the road rather than to just the next election.

  14. It will create thousands and thousands of “construction” jobs.

    There will of course afterwards be jobs created to maintain the lines, and jobs for personal to setup homes with new connections, more people to man and create call centers (hopefully US call centers).

    I have worked on projects laying underground fiber optic lines, the one stretch of highway where I worked employed hundreds of people laying the new lines.

    These are good paying jobs, creating and expanding our infrastructure which is falling far behind other countries.

    These types of projects will be expanded in the future hopefully now that we have an administration that understands the need to be the leader in this area..

    It is just sad that we had to get to the point we are at before it could begin. The past 8 years have been pretty sad. Investment in our countries future has been non-existent.

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