Friday, February 20, 2009

The Economic Stimulus (American Recovery and Reinvestment Act) Contains Billions For Rural Broadband ... Good Or Bad Idea?

This $787 billion “stimulus plan” includes education spending, new military construction, spending for transportation and water infrastructure, expanded Medicaid payments, and some tax rebates. Proponents of the bill claim it will create or save 3.5 million jobs. If accurate, that would translate to a cost of $229,000 per job created. By comparison, the median wage in the United States is $24,325.

Congressman Randy Forbes (VA) had this to say about the bill .... “Just last year, Americans lost $14 trillion in total wealth. The fundamental question we have to ask is this – are we simply going to redistribute what is left or are we going to embark on a plan to rebuild what we’ve lost? I believe, and the American people believe, that we have a responsibility to our country and to our future generations to rebuild what we’ve lost. Unfortunately, the economic stimulus package we voted on today is nothing more than a redistribution plan. Americans know the answer to our economic situation is to grow our economy, not to grow our government. Americans deserve a plan that invests in real and long-term economic growth. Americans deserve better than what Congress gave them today.”

More to the point .... the American Recovery and Reinvestment Act contains a targeted effort that fulfills an old dream of broadband boosters. It would offer substantial funding for high-speed Internet networks in corners of the country that still rely on dial-up connections or have only one broadband option.

The hope is that construction of these networks will create jobs, and that better access to broadband will spur all sorts of new economic activity. Yet not everyone agrees that broadband funding belongs in the stimulus plan.

Some critics of the idea wonder how many people will actually sign up for the new networks once they are built. Others question how many jobs broadband investments will really create. Even supporters debate whether Congress is going about funding broadband expansion the right way. The majority of those who don’t have broadband don’t really want it, according to research.

Now, I'm as about a fiscally conservative as they come, and there's much in the stimulus plan to hate... but IMHO this is actually a good idea.

It's an infrastructure enhancement that would actually do what stimulus is supposed to do. It will spur growth in the economy.

By bringing internet access to larger parts of the country, it will stir growth in telecommunications... reduce costs to consumers by bringing choices to the communications markets in their communities, while spurring growth in several sectors that have become interdependent upon the internet.

Retailers, who are increasingly branching (or moving) into the internet marketplace due to its inherent efficiency, will have a larger market in which to compete. Rural shoppers will have more choices as well, as all those e-tailers will be competing for their dollars, currently held hostage by the local general store.

Retail transportation costs will fall aside in favor of more efficient wholesale transportation, because shipping goods to a rural home is better for the environment than driving into town to buy things.

Educational industries, distance learning, and the primary/secondary educational benefits that are taken for granted by so many will be available to rural learners. from to University of Pheonix, new audiences will have new learning materials, and new opportunities.

Also, the explosion of small-cap and SOHO web-businesses will expand into these areas. Innovators and entrepreneurs live in the country, too, and not only do our country cousins want to buy stuff on the internet, they want to sell stuff, too.

Now what do YOU think?

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Blogger De said...

While I agree that this probably wasn't the ideal vehicle for funding, I am quite glad it will finally come to pass.

I live in a very weird rural area. My dirt road lies between two major highways, one of which is a cable route but the cable company (Comcast in this case) doesn't believe it economically prudent to lay cable on our side. We're all of maybe two miles away from the cable.

ISDN costs way too much, so I decided on WildBlue satellite which is incredibly picky and unreliable for downloads of any considerable size let alone any streaming content. Attempting to catch a missed episode of a TV show usually takes longer than watching the show itself due to the hassle of trying to load it in Hulu or on a network's website.

Also, I had hoped to telecommute one or two days a week, but having unreliable access doesn't allow for it. My particular job in software development requires constant communication with my team and access to the company's network. Thus, I commute 30 miles to work every day and contribute to the pollution problem that comes to a head every summer here in DC.

So yes, I'm beyond pleased that the broadband measure was passed as part of the stimulus bill, however bloated it may be in places. Our road has ten people living on it and I know I can count on at least seven to sign up for the service when it gets here.

9:34 AM  
Anonymous Anonymous said...

Well I have to say I am all for anyting tha will be DSL or Cable or even high speed wireless out here to our section of highway. Qwest refuses to update their lines to bring out DSL, Comcast doesn't want to come out this far either. Satellite is a poor substitute but certainly better then dial up, I run a home business and I believe High Speed Broadband could certainly make me more productive.

Seem that this was promised under Bush and it never happened.

6:32 PM  

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