What the Economic Stimulus Bill Means for Broadband

Congress late Friday passed the American Recovery and Reinvestment Act and included $7.2 billion for broadband buildouts in rural and unserved areas.

But at least one communications expert – former FCC economist Michael Katz – is ridiculing the focus on rural areas, saying it’s an inefficient use of money.

The government will distribute funds through branches of the Commerce and Agriculture Departments in the form of grants and loans. Tax credits have been axed. Some associations had hoped the Rural Utilities Service within the Department of Agriculture wouldn’t have oversight over the new loans, citing favoritism for rural phone providers over cable operators.

Meanwhile, Congress has stipulated that companies receiving grants through the Commerce Department’s National Telecommunications and Information Administration adhere to the FCC’s 2005 net neutrality policies. However, lawmakers got rid of the House proposal that providers abide by open access rules, which would have required them to open their broadband networks to competitors.