As the stimulus package meandering its way through Congress, the good parts seem to get lost on the way.  $2 billion for rural broadband development has been removed showing its not as much of a priority as more tax cuts. This may not be a bad thing.

I have issue with broadband being mashed up in the stimulus (I have problems with the stimulus itself, but that’s another post). President Obama claims the money is meant to create jobs more than expand broadband, but why one and not the other?  Especially when the jobs research he’s basing this on is out-of-date?  The stimulus version of broadband looks more like a payoff to the current telecommunications players who’ve been unmotivated to spread broadband themselves (some even actively preventing it).

The United States is ranked 15th in broadband adoption with significantly slower speeds for more money. We need a real, long term broadband strategy, like Japan, where money is offered to companies who produce results.  I’d say this should apply to all government money (it doesn’t), but one step at a time. The government should offer low-interest loans and grants for broadband rollout proposals. Companies need to compete for this money and know they only get paid with results. We can even use the contractor rules - a third to start, a third in the middle, and a third at the end. This way the money isn’t just given to incumbent players with a history of not doing anything (hence why we’re 15th in broadband).

With government money tied to actual results, companies have to produce results - and those results are likely more jobs and a better standard of living for those with new broadband connections. And because of the government assistance, the price of the broadband will (should) be cheaper. Further, by not relying on tax breaks, like Obama’s proposal, grants and low-interest loans provide capital to encourage new players in the industry.  The lack of competition leads to more problems than obsolete technology.

Promising huge payouts to companies isn’t stimulus and it isn’t strategy. Let’s do broadband strategy better than we’re fixing our banks.