— The $787 billion-plus economic stimulus package hammered out by congressional negotiators may help the satellite communications industry by offering $7.2 billion dollars in grants to bring broadband Internet service to rural communities while dropping requirements that those grants be targeted to high-speed service providers.
A compromise plan approved Feb. 11 by U.S. House of Representative and U.S. Senate negotiators would provide $4.4 billion to extend broadband and wireless services to rural, suburban and urban areas through the U.S. Commerce Department’s National Telecommunications and Information Administration (NTIA) in addition to $2.8 billion to expand broadband access to rural areas through the Department of Agriculture’s Rural Utilities Service (RUS), according to a conference committee document.
While few details of the compromise agreement were immediately available, industry officials said the broadband funding in the stimulus package will be awarded to public-private partnerships rather than to individual companies. “The government tried awarding money directly to banks under the Troubled Asset Relief Program, and that didn’t work well,” one satellite industry official said. Under the broadband initiative, states are expected to form partnerships with communications firms capable of providing Internet service to communities that lack service, industry officials said.
The House passed the stimulus package Jan. 13. At press time, the Senate was poised to vote on the package later that evening. President BarackObama had asked Congress to send the bill to his desk by Feb. 16.
By specifically targeting grant money for broadband communications to unserved and underserved communities, the new legislation is likely to benefit satellite broadband providers.
While cable and Digital Subscriber Line (DSL) Internet links are available in heavily populated areas, satellite- based networks provide service to the most rural and remote areas of the United States, said Patricia Cooper, president of the Satellite Industry Association, a trade group based in Washington.
“We are pleased that broadband remains a significant emphasis in the stimulus package and especially that unserved areas stand to receive significant support,” Cooper said.
Satellite industry officials also welcomed news that the stimulus plan that emerged from the House-Senate conference did not specify the speed capabilities of networks eligible to receive broadband grants. The original House- passed stimulus bill would have set aside 75 percent of the funding for broadband services offering subscribers 45 megabits per second downstream and at least 15 megabits per second upstream, with the remaining 25 percent of the money going to firms that offered data at a rate of 5 megabits per second downstream and 1 megabit per second upstream. Those speed requirements would have favored cable, fiber-optic and DSL communications providers who can offer higher transmission rates than satellite broadband service, industry officials said.
“I’m cautiously optimistic that there’s a real interest in making sure broadband reaches rural areas,” said Tom Moore, senior vice president of ViaSat, Inc., Carlsbad, Calif. “I also see a growing appreciation for the fact that without satellites, it is extremely expensive to provide broadband access to the last 20 percent of homes.”
In the scramble to reach a final agreement on a compromise stimulus bill, House and Senate conferees dropped a provision of the Senate plan to offer tax credits for broadband deployment. Those tax credits proved controversial, pitting communications firms against one another because language included in the Senate draft was expected to favor large, established broadband providers over smaller companies, industry official said.