Broadband stimulus rules released, net neutrality a requirement

The day is finally here. The National Telecommunications and Information Administration (NTIA), along with the Rural Utilities Service (RUS), revealed their grant guidelines for the $7.2 billion in stimulus money that will be loaned out for broadband deployments in unserved and underserved areas. Applicants can begin applying for the funds on July 14, with money starting to flow in September.

If you'd like to peruse the 121-page document, click here [1]. But here are some initial thoughts:

As expected, the guidelines call for net neutrality requirements. Those applicants that provide wholesale access to their networks at reasonable rates will be given preference for funds. No matter for the country's largest broadband providers, though, since they already indicated they wouldn't play given the expected net neutrality rules and what these players call bureaucratic red tape tied to the awards.

Nevertheless, should the country's broadband operators be afraid of what happened yesterday? Craig Settles, head of Successful.com, said the guidelines released today will most likely be the basis of any national broadband plan the Federal Communications Commission comes up with by February 2010.

One of the more disappointing aspects was the definition of broadband speeds. The agencies concluded broadband services should be defined as the "provision of two-way data transmission within advertised speeds of at least 768 kbps downstream and 200 kbps upstream to end users." Their reasoning was that the FCC has already utilized that standard and because it is the most "technology-neutral option." Perhaps the saving grace will be the fact that applicants that propose to deploy faster speeds are given preference over those choosing to deploy services with the minimum speed. The theory is that enough companies will compete with one another so that the fastest technology that is economically feasible will prevail, Settles said.

An area will be considered "underserved" by broadband, and therefore eligible for grants, is where half or fewer of the households are able to obtain wired broadband.

Of the $2.4 billion the Department of Agriculture's RUS will dole out, $800 million will be loaned to build out middle-mile, otherwise known as backhaul, projects.

In the coming days, we'll see a flood of analysis come out of this monster document. I'll keep you posted.--Lynnette [2]