Friedman: Small, Mid-Sized Telecom and Service Providers Excluded From Stimulus Program

ACA chairman says overbuilders have been given grants over unserved areas

By John Eggerton -- Broadcasting & Cable, 4/27/2010 10:13:45 AM

Small and medium-sized telecommunications and information service providers have been "effectively excluded" from the broadband stimulus program thanks to rules that are unfair and unbalanced and a program that has been poorly run. 

That was the message of American Cable Association Chairman and Wave Broadband COO Steve Friedman in a broadband oversight hearing in the U.S. Senate Committee on Small Business & Entrepreneurship Tuesday (April 27), according to a copy of his prepared testimony.

Meanwhile, overbuilders have been given government grants to provide broadband service in competition to those operators.

Friedman said that the broadband stimulus grant programs being administered by the National Telecommunications & Information Administration and Rural Utilities Service (RUS) were well-meaning, but were "poorly developed and implemented" and should have been directed to unserved areas. He said ACA had supported the stimulus program despite problems of overbuilding in cites in the RUS' rural support mechanisms in the past, in hopes that those overbuild problems would not be repeated. But he said members have said those problems persist.

He cited three examples where ACA members were in line to be overbuilt with grant or loan money from the program. "The RUS and NTIA should immediately review and modify all proposals of all first round awardees to ensure that no funding will be used to overbuild existing Internet access providers- particularly the three instances above - and then concentrate in the second round on providing loans and grants to the truly unserved areas of the country," he said.

NTIA just completed handing out grants for its first of two rounds of bidding, and is currently vetting the second round.

Friedman said that the government could help his members provide broadband in places without last-mile infrastructure or access to sufficient middle-mile (backbone) services at reasonable prices by "increasing the availability of low-cost, high-capacity middle mile infrastructure; updating the set-top box rules; reforming the pole attachment rules to lower broadband costs and continue expansion; prohibiting BIP and BTOP funding from going to areas already served; and ensuring that government-funded broadband deployment programs are technology and industry neutral."

Also slated to testify are the heads of both the RUS and NTIA.