The Broadband Stimulus Stumbles and Succeeds

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One of the major initiatives launched by the Obama administration during the dark days of the financial meltdown was a program aimed at bringing broadband services to rural areas. Now, the General Accounting Office (GAO) is taking the administration to the wood shed regarding how the broadband stimulus is being run.

The InformationWeek story says many partially operational and half-completed projects are left over from the program, which had a budget of $3 billion:

The actual numbers were 42 terminations of 297 BIP projects, or about 14%, as of March 2014, according to the GAO. Of the 255 remaining projects, 223 were completed or partially operational, and department officials are optimistic that the remaining 32 will be completed by the June 2105 program deadline. While the number of terminated projects might not seem large, each terminated project represents possible broadband service for a large block of subscribers.

The GAO scolding doesn’t mean that the program hasn’t made progress, though. For instance, FierceTelecom reported that TDS Telecom has finished a project that installed 84 miles of fiber and 18 remote terminal cabinets to serve 1,400 residents of Medford and Stetsonville, Wis. Rural utility service picked up 75 percent of the $6.2 million price tag.

The Havana Herald reported that a rural broadband project in the panhandle of Florida is “98 percent complete” and starting to offer services to retail broadband providers. The project, which was awarded $24 million, serves eight counties and eventually could connect 860 community anchor institutions, 174,000 households and greater than 16,400 businesses. Broadband access in the area covered now is at about 39 percent.

It seems likely that the broadband stimulus has had a mix of success and failures. Clearly, the findings by the GAO are sobering. At the same time, it seems that most projects are being completed, though often behind schedule. It is also fair to ask to what extent the broadband stimulus primed the pump for cable and phone companies to become more aggressive, and for third parties to start offering services.

The bottom line is that more rural broadband is available today than in the past, and that the momentum clearly is strong. For instance, this week Mediacom and Deere & Company announced a fiber- and wireless-based project that will provide broadband to commercial farms in Iowa. The announcement was made by Dan Templin, Mediacom Business’ senior vice president:

In his remarks, Mr. Templin noted that even though modern farming equipment is increasingly capable of real-time machine-to-machine interaction and data sharing, much of Iowa’s cropland lacks access to the reliable broadband services that make this type of communication possible. To address the access issue, Mediacom Business and John Deere filed a joint expression of interest with the Federal Communications Commission outlining an innovative plan to improve agricultural efficiency and production by driving fiber networks deeper into rural Iowa and connecting the entirely of commercial farming operations with wireless broadband services…

It is entirely possible that the program would have been undertaken regardless of whether the government funded a stimulus program. The push by Washington, however, may have contributed in setting the stage for such initiatives.