Monday, August 04, 2008

Will state broadband subsidies have meaningful impact?

Massachusetts appears set to join California among states providing subsidies to expand broadband telecommunications infrastructure where little or none exists.

The Berkshire Eagle of Pittsfield, Massachusetts reports Bay State lawmakers have sent Gov. Deval L. Patrick legislation that would provide $40 million to help underwrite the cost of building infrastructure in the notorious sprawling broadband black hole in the western part of the state. According to the newspaper, the goal of the legislation, signed into law today by Patrick, is to wire 32 unserved communities with high-speed broadband in the next two years.

Out on the left coast, a deadline passed July 24 for providers to submit proposals to the California Public Utilities Commission under which they would receive a 40 percent subsidy to deploy either wireline or wireless-based broadband infrastruture capable of speeds of at least 3 Mbs down and 1 Mbs up. Priority will be given first to unserved areas and then underserved areas. The $100 million California Advanced Services Fund is funded by a surcharge on telephone bills. The CPUC is expected to announce those projects selected for funding by the fall or later this year.

Given the high cost of broadband telecommunications infrastructure, it remains to be seen if these relatively small state subsidies can make a signficant dent in both states' many broadband black spots. Some believe broadband market failure is so pervasive that a much broader, larger federal initiative similar to the Eisenhower-era federal highway act is needed to bring America into the modern age of Internet-based telecommunications and are urging presidential candidates to back such a program.

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