Rural Internet proposal captures stimulus woes in a (rather large) nutshell

Depending on what happens in the Senate, there might be $9 billion for building out Internet in rural and underserved areas. But is it just handouts for lobbyists, or is something good going to happen?
Written by Richard Koman, Contributor

I talked to New York Times reporter David Herszenhorn for his story, Internet Money in Fiscal Plan: Wise or Waste?. Didn't make the cut, though. Ah, well. David's thesis is sound. Like so many items in the stimulus package, the investment in rural broadband can be viewed as a solid investment in the future, akin to the building of the interstate system, or a "cyberbridge to nowhere."

What's clear to me that it is not stimulus in the limited sense of the word. Will jobs be created immediately? Will it jumpstart spending? No - it's an investment in the future. So, to some degree we need to get over the narrow view of stimulus and accept a bill that will pump money into the economy over a four-year horizon.

But fuzzing the definition of "stimulus" is what led Congress into the current miasma. When I read articles about the way the Senate bill is growing, I just see an old cartoon with a fat cat with dollar signs for eyes, kachinging as he blinks. Stimulus is good. But as we blithely talk in terms of tens of billions of dollars, someone's gotta throw a yellow flag. This stuff has to work. It can't just be corporate giveaways that don't stimulate and don't create infrastructure. And the lobbyists are running around Washington unable to even ask for the money, they're drooling so hard.

David quotes Craig Settles, who I've talked to in years past about muni broadband, about the tendency to throw money without accountability:

The first rule of technology investment is you spend time understanding the end user, what they need and the conditions under which they will use the technology. If you don’t do this well, you end up throwing millions or, in this case, potentially billions down a rat hole. You will spend money for things that people don’t need or can’t use.

So the question of rural broadband comes down to methodology. How is it done? Part of the plan is to hand over some $3 billion to the like of AT&T and Verizon, to cover the costs, apparently unrecoverable through normal service charges, of installing networks in rural and underserved areas. But, hmm, we didn't pay asphalt companies money in the hopes that they would build roads, did we? So why are we doing it here?

The private sector simply hasn't worked for these areas. Fixing the problems means not just government checks but, gasp, government oversight. That might mean grants to states or even, gasp, a direct federal project, with technology project management. OK, government doesn't have a great track record at managing projects. So outsource the management. But leave the accountability.

And the crazy thing is this $9 billion to get everyone in the U.S. with at least the possibility of "broadband" doesn't begin to address the real issue: pathetic speeds and a "national" network that is dependent on cable networks that have to block P2P to serve all users in a neighborhood. What is needed is probably $100 billion in investment. The long-term benefits would be amazing, but what would it take to incentivize that kind of build-out?

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