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CONTACT: Amy Smorodin
April 10, 2009
(202) 289-8928
Broadband Stimulus Should Catalyze Investment
Esbin, Ferree File Comments Regarding "Recovery Act" Broadband Provisions

WASHINGTON D.C. - Funds utilized to stimulate broadband deployment should catalyze, rather than replace or deter, private investment in infrastructure, state Barbara Esbin and Kenneth Ferree in comments released today by The Progress & Freedom Foundation.  Moreover, the authors state, the grants should be used to improve service in areas unserved or markedly underserved by broadband and not limited to particular technologies or providers.

In the comments, Esbin and Ferree, PFF Senior Fellow and President, respectively, urge the Federal Communications Commission and those responsible for distribution of the grants, to clearly define the terms "unserved and "underserved" and "broadband" as presented in the Act.  This will avoid inconsistency and misallocation of funds, which will be critical to the program's success.

Esbin and Ferree advise distributors of the grants to prioritize funding for broadband deployment in unserved and markedly underserved areas and to enable greater adoption of broadband where it is available but under-utilized, rather then supporting second or third entrants in a market.  "Only after funds have been expended to reach unserved and markedly geographically underserved areas" and residents unable to utilize available services, they explain, "should funds be granted to support programs intended to address qualitative shortcomings in existing broadband services."  The authors also advise the agencies to direct funds to infrastructure and equipment expenditures, not the operational costs of providers, in order to avoid "post-stimulus dependency on public support which will be difficult to end and/or will overburden existing support programs."

Esbin and Ferree warn against using the funds for market manipulation in favor of certain technologies, service providers or other policy goals not directly tied to economic stimulus and job creation.  Specifically, the authors address network interconnection and non discrimination obligations that will be conditions of grant receipt, which at a minimum would require recipients to adhere to the FCC's Internet Policy Statement.  "It would be unwise to go beyond these principles in establishing the contractual conditions of grant awards for fear of deterring the applicants whose projects would otherwise be most likely to fulfill the goals of the Recovery Act but for their desire not to have their business plans altered by government mandate," they explain.

The comments, submitted to the FCC, U.S. Department of Commerce, and US Department of Agriculture, are available on the PFF website.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation