The Right Questions: Is the broadband stimulus a success or failure?
Written by Dave Burstein   
Biden_Obama1) How many more unserved homes will this reach? 2) How many jobs will be directly created? NTIA/RUS are about to release the first of $7.2B in grants for broadband. These have been put off for months because of problems. Is the money being spent sensibly? Fortunately, the goals of the stimulus are clear.

Goal One Jobs: Blair Levin when the stimulus was drafted explained the primary goal was "directly creating jobs." That's the key number, because there are so many different ways to estimate indirectly created jobs any figure for indirect jobs is arbitrary. Columbia Professor Raoul Katz presented an important paper showing that the effect of broadband spending could range from a large number of jobs indirectly created to an actual negative number. You might actually reduce the local employment by buying from Amazon instead of local stores, taking classes over the net, etc.  The most important figure is therefore the "directly created jobs" to allow an independent judgment of which multiplier is right to apply.

Goal Two: Reaching unserved homes. Remember that the term "underserved" is an arbitrary one for funding, not related to the actual service available. Reaching those "unserved" is the President's promise.

The first projects announced failed miserably. Biden went down to Dawsonville, Georgia and said they couldn't get decent Internet connectivity. Turns out the whole town has DSL, T-1, and more. There's an OC3 just down the road from where he spoke, and I confirmed with Windstream they serve broadband to the company he said couldn't get decent service. Grant Gross of IDG writes that Impulse Manufacturing, where the VP spoke, is offered 12 megabits.

Nearly all the proposals are for overbuilding existing facilities, and nearly none likely to do much if anything for the "unserved." Painful to watch this go bad - most of the Obama people are friends. ( That may no longer be true after I write this.)  I've confirmed at least three of the first four BTOP builds duplicate fiber in place to territories already generally served with DSL or cable. Overbuilding has a place - I respect the people behind the project in Maine - but doesn't work as a primary U.S. strategy.