Even as it announced second-round awards last week, word has come down that the federal government’s broadband stimulus program is going through a bit of belt tightening. The culprit: the House Appropriations Committee, which inserted the proposed $602 million cuts (about 8% of the program or 14% of the remaining funds) into a bill funding the wars in Afghanistan and Iraq.
Asks Telecompetitor:
Is this cut just representative of normal Washington budget ‘horse trading,’ or is it more symbolic of the types of troubles ahead for broadband funding?
Those costs have to be paid for somehow – whether through universal service funding, higher taxes, higher broadband bills, or additional government subsidies/grants. Truth be told, it will probably be a combination of all those things. But if the broadband stimulus program is already being cut and current policy initiatives continue to cap the universal service fund, where is the money going to come from?
Connected Planet’s take,
Joan Engebretson:
Many of the organizations that have received broadband stimulus funding are getting it as a combination of grants and loans, and many are providing matching funds, so the net impact of the proposed funding cut would actually be a lot more than $600 million.
A cut in the stimulus program will put pressure on the FCC to make up the difference through the proposed Connect America fund. But most carriers would prefer to see the money come through the stimulus program because unlike the Connect America fund — which expects to fund only 4 Mb/s connectivity — the stimulus program has favored higher-speed fiber-based projects.
That’s our take on this. Let us know what you think in the comments section below:
This fits with the word on the street that the people brought into the agencies as term-limited employees to work on the ARRA Broadband programs are not having their terms extended. This, at the time that the money is actually going out and the contract and construction work is just beginning, in other words, the busy season is just starting.
Bigger issues may be in play here. Given the International Monetary Fund’s criticism of U.S. policies that contribute to an increasingly unmanageable budget deficit — e.g., cheap fuel, subsidized housing and a government retirement check — the feds may have bigger problems on their minds than whether rural/underserved areas get broadband. Budget cuts are on the way. The question is where. See today’s Washington Post:
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/08/AR2010070806116.html
When Congress has to make a choice between telling constituents that either home interest deductions, retirement at 62 or faster digital access to soybean prices is on the budget chopping block, which do you think will get the ax?