With the first concerted federal program to subsidize high-speed Internet services in rural areas, the new economic stimulus package will create some jobs and could get hundreds of thousands of households online.
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With the first concerted federal program to subsidize high-speed Internet services in rural areas, the new economic stimulus package will create some jobs and could get hundreds of thousands of households online.
Yet there's some question whether the economy would be more energized by spending that money on other things.
Because Internet access is already widespread and still being expanded even in a shrinking economy, injecting more money for broadband could simply equate to giving more coffee to someone who's already downed three cups.
"From the rural Vermont that we see, broadband is happening, happening fast," said Michel Guite, president of Vermont Telephone Co., which is based in Springfield.
The company, which serves 21,000 lines, is able to borrow from commercial lenders when it needs to invest in expanding Internet services, Guite said Thursday at a conference organized by the Columbia Institute for Tele-Information.
Although he wouldn't decline cheaper loans from the government, Guite said Congress could help his company better by cutting red tape, particularly when it comes to freeing up spectrum for wireless services.
The stimulus bill provides $7.2 billion for grants, loans and loan guarantees, primarily for areas that lack broadband or are "underserved," though the term is not defined. Some of that money is set aside to expand Internet access at public centers like community colleges and public libraries.
One reason the money won't likely have much impact is its small size: less than 1 percent of the overall stimulus package, and substantially less per citizen than some countries, like Ireland and Sweden, have spent on improving their networks.
The Obama administration is looking at creating a more comprehensive plan to get the whole country covered by broadband, technology adviser Alec Ross told The Washington Post this week, but it's not yet clear if that would mean more subsidies.
A possible point of comparison is phone service for rural areas, which has long been subsidized through a program that has critics, too. A study by Robert Crandall of the Brookings Institution said that the program produces customer savings of about $2 per month for $20 in monthly subsidies. But he conceded that when phone service was being built out, subsidies may have helped.
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