US mulls $38bn broadband investment

US telecommunications companies could enjoy a $38.5bn windfall for building broadband networks, but they will get just $1.6bn for now,

US telecommunications companies could enjoy a $38.5bn windfall for building broadband networks, but they will get just $1.6bn for now, Congress heard yesterday.

The National Telecommunications and Information Administration (NTIA) agency, part of the US Department of Commerce, received more than 2,200 applications for government grants, totalling nearly $28bn. In addition, applicants proposed to put up $10.5bn in matching funds.

Applications came in from state, tribal and local governments, non-profit, industry and anchor institutions such as libraries, universities, community colleges and hospitals, public safety organisations, and other bodies in rural, suburban and urban areas, Lawrence Strickling, assistant secretary for the NTIA's communications and information, told a Congressional committee.

"The fact that applicants requested nearly seven times the total amount of funding available underscores the extent of interest in expanded access to broadband services throughout the country," Strickling told the subcommittee on communications, technology and the internet, part of the Congressional committee on energy and commerce.

The committee is holding oversight hearings on the broadband part of the American Recovery and Reinvestment Act, the Obama administration's plan to spend its way out of the recession.

The NTIA has a kitty of $4.7bn, but Stickling said he could find another $800m from other sources.

Strickling said NTIA would award up to $1.6bn in first round grants. Of this, up to $1.2bn would go to build both "last mile" and "middle mile" broadband infrastructure.

"We will also award grants totalling $50m for public computer centre projects and $150m for projects that promote broadband demand and affordability," he said.

Strickling said the law required proposers put up at least 10% of the cost of the project. "On average, applicants' proposed matches exceeded 25% of the value of all projects, meaning that the Recovery Act is already stimulating private sector interest and investment beyond the statutory baseline minimum," he said.

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