CBO: The full $6B earmarked for broadband might not be spent until 2016: Report questions economic stimulus’ short-term impact

A big chunk of the billions of dollars earmarked in economic recovery bills for broadband grants for wireless and other service providers likely will not make it into the private sector anytime soon, raising questions about the intended stimulus effect at a time when passage of the Senate measure suddenly appears in trouble.
The Obama administration and leaders of the Democratic-led Congress early on said they expected 75% of the $800 billion-$900 billion in economic stimulus legislation would be spent within 18 months.
But analyses by the Congressional Budget Office offers a different view, particularly in terms of the $6 billion for broadband grants (including $1 billion for wireless) in the House-passed bill and $9 billion for broadband grants in a troubled Senate measure being debated on the floor this week. The Senate bill, unlike House legislation, also includes broadband tax credits for wireless operators and other service providers.
“CBO anticipates that funds provided to the National Telecommunications and Information Administration to administer the broadband grant program would take longer to spend – seven years – because the new appropriations would far exceed the agency’s 2009 funding of $17 million, and the legislation would require, in most circumstances, that grant recipients provide 20% of the project’s cost from non-federal sources,” the CBO stated in its cost estimate of the Senate economic recovery bill.
In its review of House-passed stimulus legislation, the CBO projected that much of the $6 billion in broadband grants geared to underserved and unserved areas will be spent between 2012 and 2016.
Republicans and some fiscally conservative Democrats are pushing key Democratic lawmakers to pare down the economic stimulus legislation.
Clarity for rural
Meantime, the Rural Cellular Association wrote House and Senate leaders asking for clearer and stronger provisions to promote wireless broadband in less populated areas of the country.
Specifically, the organization offered the following recommendations:
–Provide definitions to the Federal Communications Commission and/or NTIA on “unserved” and “underserved.” RCA recommends defining “unserved” as areas with no access to wireless voice or wireless broadband service and “underserved” as areas with limited wireless voice as well as wireless broadband service at less than 2 megabits per second downlink and 768 kilobits per second uplink.
–Adopt the House version of “eligible entities,” establish a uniform criterion for “eligible entities” and provide that criterion to state agencies to assist them in recommending applicants for broadband grants and loans provided by the economic stimulus legislation.
–The grant and loan program should proceed over a timeline that is reasonable, with RCA recommending 90 days.
–Provide no more than 90 days to NTIA, the FCC and the Agriculture Department’s Rural Utility Service to approve or deny grant and loan applications. RCA also urged modifications to simplify the application process.
–Establish a default process in the event that a state does not take the steps necessary to participate in the grant process.
–Special consideration should be given to ensure that customers served by tier-two and tier-three wireless providers will benefit from the economic stimulus package. Specifically, these wireless providers should receive expedited grant and loan approval on favorable terms.
–In the event that tax credits are authorized through this legislation, such credits should allow tier-two and tier-three wireless carriers to use any tax credits authorized by this legislation to offset any current tax liabilities due.
–Allow wireless broadband funds to be used to support wireless backhaul facilities.