blind_html [Fwd: Telecoms Say Web Funding For Unserved Falls Short]

  • From: Nimer <nimerjaber1@xxxxxxxxx>
  • To: blind_html@xxxxxxxxxxxxx
  • Date: Sat, 31 Jan 2009 09:54:09 -0700

-------- Original Message --------
Subject:        Telecoms Say Web Funding For Unserved Falls Short
Date:   Sat, 31 Jan 2009 10:58:40 -0500
From:   Ray T. Mahorney <coffee-craver@xxxxxxxxxxxxxx>
Reply-To:       Blind-chit-chat@xxxxxxxxxxxxxxx
To:     <Undisclosed-Recipient:;>

JANUARY 30, 2009

Telecoms Say Web Funding For Unserved Falls Short

Wall Street Journal <>

The funding that Congress is likely to set aside for build-outs of
high-speed Internet in its economic-stimulus package falls short of what
service providers say is required to reach rural and unserved areas, based
on initial cost estimates by several companies.

A trade group representing midsize telecom providers with 27 million
customers says its members alone would require $6 billion to $6.5 billion
to reach about 3.6 million homes in their territories that don't have
high-speed Internet access.

That includes Qwest Communications International Inc., which says its rural
build-out would cost $3 billion, but doesn't include estimates from bigger
providers such as AT&T Inc. and Verizon Communications Inc., or any cable

The House passed a stimulus bill Wednesday that would include $6 billion in
broadband grants. They could be used not just for first-time deployments in
unserved areas but also for next-generation upgrades to existing networks.
Legislation moving through the Senate includes a $9 billion grant program.

Some public-interest groups had argued for a broadband stimulus in the tens
of billions of dollars. Advocates say broadband deployment is critical to
the competitiveness of the U.S. economy. The U.S. has slipped to 15th place
from fourth since 2001 in broadband penetration, according to the
Organization for Economic Cooperation and Development.

There are no precise data on the number of unserved broadband households in
the U.S., but a consumer survey by the Pew Internet Project found there
were about 10 million.

Rep. Rick Boucher, a Virginia Democrat who heads the House subcommittee on
technology and the Internet, said other federal programs for rural
broadband have shown that even a modest amount of grant money, used
efficiently, can have an impact.

"I'm not sure the claim can be made that this legislation will bring
broadband to every last person in America," he said "But if we can improve
the reach of broadband, that would be a major advancement."

The main goal of the recovery package is job creation. Qwest says that by
bringing Internet service to towns like Tombstone, Ariz., and Warm Springs,
Ore., it could create tens of thousands of jobs, from network engineers to
trench diggers who lay broadband lines in the ground. Qwest, which serves
14 states in the West and Midwest, says it is prepared to roll out digital
subscriber line, or DSL, service with download speeds of 7 megabits per
second, faster than the 5-megabit standard the House and Senate are likely
to mandate.

The Independent Telephone and Telecommunications Alliance, the group of
mid-tier phone companies, said its cost estimate was predicated on a slower
speed of 1.5 megabits per second, which would be easier for most of its
members to offer. Meeting the higher standard in the legislation would make
rollouts more costly, said Curt Stamp, the group's president.

Gene Kimmelman, vice president of federal policy at Consumers Union, said
it isn't surprising that there isn't an enormous amount of broadband
funding in legislation whose main purpose is to stimulate the economy. "I'm
not displeased at the size of the investment, he said. "Given the other
things consumers need, I don't think broadband was as important."

Cable providers have taken issue with the standard the Senate bill uses for
a next-generation service -- one with download speeds of 100 megabits per
second and upload speeds of 20 megabits per second -- which they say would
favor the fiber-optic networks used by Verizon, according to people close
to the cable industry. Verizon declined to comment.

Cable providers also want to see money directed mainly at unserved areas.
"Most of the monies people are talking about in terms of the broadband
stimulus package would be needed just to solve that problem," said Kyle
McSlarrow, president and chief executive of the National Cable and
Telecommunications Association.

The Senate bill also includes limited tax credits -- 20% of investments in
unserved areas and 20% of investments in next-generation services in
underserved markets, which are defined essentially as low-income areas.
Phone companies say these incentives aren't big enough to attract
investment by Internet service providers. They are pushing for credits in
unserved areas closer to 50%. The Senate Finance Committee estimated the
cost of the tax credits to the government at just $110 million over 10 years.

"This is about deploying broadband in small-town America, where the
economics do not now -- and will not in the foreseeable future -- justify
the expenditure for us," said Steve Davis, senior vice president of public
policy at Qwest.

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