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Telcos seek access to $4.7bn for Internet grants

Telco giants Verizon, AT&T reluctant to apply due to concerns that conditions imposed upon them may be too onerous.

The feeding frenzy for $4.7 billion in Internet grants kicked off Monday at the U.S. Commerce Department with telecom industry representatives saying private companies should be eligible to apply and state regulators saying those firms should be required to partner with the government.

"If we are to reach the goal of ubiquitous broadband in the United States ... the private sector could and should be part of that solution," Independent Telephone and Telecommunications Alliance President Curt Stamp said at Commerce's first of several open meetings about the grant program.

If a company has a license or local franchise to provide Internet services, it automatically should be allowed to apply for a grant, Stamp said. He spoke on behalf of several incumbent Internet service providers, including wireless carriers, cable providers, and phone companies.

Not so fast, said Betty Ann Kane, who spoke on behalf of the National Association of Regulatory Utility Commissioners. Private companies should only be eligible for Internet grant money "when the entity is acting in partnership with any of those state entities," Kane said.

NARUC also wants states or local governments to distribute half of Commerce's Internet grant money, which is part of a massive economic stimulus package.

The Commerce Department is saddled with the daunting task of distributing the money before September of next year and has already received thousands of requests for meetings and information about grant availability. By law, the grants can go to private companies only if the grant givers deem it in the public interest.

The U.S. Department of Agriculture also will dole out some $2.5 billion in Internet grants to rural areas over the next year and a half.

Big companies like Verizon Communications Inc. and AT&T Inc. are reluctant to apply for the Commerce Department grants, in part because the conditions imposed on the grantees may be too onerous.

The grants could be more attractive to smaller firms or companies that serve rural areas. Some of those companies right now can't make a business case to invest millions to build networks in communities without access, but a grant could change that calculation, Stamp said.

State and local governments are in the best position to determine where the need for new Internet networks is greatest, Kane said.

Local governments also could use the money themselves, Kane suggested. The District of Columbia, for example, could use grant money to build up its municipal network that serves police officers and other emergency responders. Kane chairs the District of Columbia Public Service Commission.

Imposing a government partnership condition on grant funds could be dangerous, said Stamp. "We run the risk of driving away potential investors."

"All parties should be eligible to bid for the [broadband] funding," said Telecommunications Industry Association President Grant Seiffert. "We believe the congressional intent is not to preclude anyone from applying."

Seiffert's group includes equipment vendors, suppliers, consumer electronics manufacturers, and systems integrators.

The Commerce Department is building a public record about the Internet grants before its sets criteria for applications.

Commerce officials have encouraged potential applicants to form coalitions. It is possible that some type of public/private cooperation will be considered favorably during the judging process.

Источник: Total Telecom

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