Telecom August 16, 2009, 11:15PM EST

Broadband Stimulus and the Underserved

Some areas most in need of broadband coverage don't qualify as "underserved" under the rules of the broadband stimulus program

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Christopher Vein, chief information officer of the city of San Francisco, has some inventive ways to bring high-speed Internet access to areas of the city barely reached by broadband. He's marshaled donated PCs and equipment and tapped excess capacity on the city's fiber-optic network to give inner-city residents a fast connection to the Web and bring state-of-the-art health care to a clinic in one of San Francisco's least privileged neighborhoods. In many ways, Vein is just getting warmed up; he has even bigger plans.

But as outsize as his ambitions may be, Vein won't be in line for one of the government's grandest plans for bringing broadband into underserved parts of the country. At least for now, San Francisco is holding off on applying for a grant under the federal government's $4.7 billion Broadband Technology Opportunities Program, designed to encourage broadband development around the country.

It's not that Vein doesn't want the money, or couldn't put it to good use. But as written, the rules governing the grants are stacked against cities like San Francisco, even though urban areas are among the places least reached by broadband and most in need of efforts like the one under way.

"I don't want to be seen as criticizing the Administration's efforts on the broadband problem around the country," Vein says. "I applaud its efforts. But the rules are written in such a way that it's difficult for a city like San Francisco to meet the requirements." An Aug. 14 deadline for applicants for the first wave of funds was extended by six days after technical glitches snagged the application process.

To qualify for funding, applicants need to prove they're catering to an "underserved" area. Yet the National Telecommunications & Information Administration (NTIA), which is overseeing the program, defines underserved as one where at least half of all households lack broadband, or where fewer than 40% of households subscribe to broadband, or a place where no service provider advertises broadband speeds of at least 3 megabits per second. In a densely populated city like San Francisco, where telecom providers like AT&T (T) and Comcast (CMCSA) widely advertise residential broadband all over the city, it's hard to point to a place that technically meets the "underserved" definition.

Problem Goes Beyond Big Cities

Rather than apply for the first batch of grants, Vein is waiting for a later batch of funds in hopes that the rules will be changed by then. Vein is not alone in his beef with the government's broadband program. Cities large and small are having a hard time meeting the application requirements from the NTIA. Many are delaying requests until changes can be made to the rules, says Joanne Hovis, a telecommunications consultant who sits on the board of directors of the National Association of Telecommunications Officers & Advisors (NATOA), an organization that represents chief information officers and chief technology officers in local governments. "It's hard to see how any urban area can qualify for a grant, and that is unfortunate because the most serious needs for broadband access are in urban areas," Hovis says. "Some neighborhoods may indeed be served by commercial operators, but that doesn't mean the service is affordable."