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The Associated Press August 18, 2010, 3:46PM ET

Vilsack announces more money for broadband effort

The federal government will spend another $363 million to expand broadband access in rural areas of the country, U.S. Agriculture Secretary Tom Vilsack announced Wednesday.

The money will fund 218 projects in 16 states, including four in Iowa. So far the Agriculture Department has spent $3 billion to fund projects in 45 states as part of President Barack Obama's economic stimulus package.

"When we complete our work, the broadband programs or USDA will expand broadband access to 1.2 million households" and create as many as 5,000 new jobs, Vilsack said.

Vilsack, a former two-term governor of Iowa, is on a three-day trip to the state to promote Obama's efforts to make long-term investments in rural areas that also give the economy a boost.

In Iowa, the latest funding will go to three companies. Iowa Telecommunications Services will get the biggest share, with two grants totaling $17.3 million, to connect about 16,500 people and roughly 21,500 businesses. Others receiving grants are Southwest Telephone Exchange and Cedar Falls Utilities.

Supporters of the effort argue that rural areas are at a competitive disadvantage because access to high-speed Internet service is increasingly essential for businesses, schools and hospitals. Such service typically is standard in urban areas but remains rare in sparsely populated areas.

"This is part of a new framework for rural revitalization," said Vilsack. "When you talk about expanding broadband as we are doing, this is all part of revitalizing our rural economy and getting it to the point where it can attract and retain young people."

He said there's a simple economic benefit in expanding broadband connections to rural areas.

"Broadband expansion is important for farmers and ranchers because it provides them the real-time information and the capacity to market their products," Vilsack said. "The same is true for small businesses in those towns."

Vilsack said the broadband expansion in rural areas has some historical precedent.

"This is very similar to happened in the 1930s and '40s when we brought rural electrification to the countryside," Vilsack said. "This is connecting folks to the 21st century."

The former governor appeared with John Whitaker, a former legislator who now heads the state's Farm Services Agency.

"This is critically important for expanding those rural farm businesses, particularly the niche businesses," Whitaker said.

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