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What the Stimulus Bill Means for Broadband

In his second report on the American Recovery and Reinvestment Act, Jeffrey Hill explains whether the bill will help bridge the “digital divide.”

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This is Jeffrey Hill’s second report on what the recently passed stimulus bill means for cities. For the first installment, click here.

To follow up on Helen Hwang’s excellent article on the digital divide in Issue 21 of Next American City, $7.2 billion is provided in the American Recovery and Reinvestment Act bill for broadband development in areas largely under-served by Internet providers. The “broadband stimulus bill” also creates a new broadband technology opportunities program at the U.S. National Telecommunications and Information Administration (NTIA), a unit of the U.S. Department of Commerce that would oversee the distribution of broadband grants. Grant recipients would have to underwrite up to 20 percent of project costs, with hardship waivers available when necessary. Another $2.5 billion in broadband grants will be administered by the U.S. Department of Agriculture’s Rural Utilities Service. While this may not directly apply to cities, the initiative has been pushed long before the economic crisis took full effect as a way of preventing such a crisis.

In a speech delivered at the Brookings Institute last July, Virginia Governor Tim Kaine said the problem with finding government funding for any sort of broadband infrastructure is that the subject “is not sexy enough” and that politicians simply do not grasp the industry’s lingo. Kaine uses his home state’s tobacco tax to reinvest in tobacco-producing regions by funding broadband connectivity programs. In a study released by Brookings, “The Hamilton Project,” Jon Peha, a professor of engineering and public policy writes, “Roughly one-third of households in rural America cannot subscribe to broadband Internet services at any price. Rural users rely far more on dial-up and far less on broadband.” Peha’s study pushes the need for broadband infrastructure, and more importantly, funding from the federal government. This relates to opportunities to telecommute to large labor centers – mostly in urban areas – creating jobs that are environmentally friendly enough to be considered “green jobs” under ARRA’s mandate, therefore qualifying urban-based companies for federal funding and saving on office space.

So, between this and all the other billions, there are lots and lots of numbers in the economic stimulus package that change the game for urban developers, planners, educators, municipal governments and pretty much everyone else. To bank on the bill’s failure in order to springboard a 2010 political run for office is a much bigger ethical risk than, say, using the money your constituents will pay for anyway to create something truly remarkable: a working city.

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