Stimulus Funds Offer Huge Opportunity for Local Governments (Opinion)

Stimulus bill has billions for broadband, health IT and electricity grid upgrades. Now local governments need funding processes that deliver maximum benefit.

by / March 11, 2009

The big news as this issue of Digital Communities is being put to bed is the approval of a compromise economic stimulus bill that includes $7.2 billion to help deploy broadband in rural and underserved urban areas, $17 billion for incentives for health-care providers to adopt electronic health records, and $11 billion to update the nation's electricity grid by connecting it to the Internet.

The fundamental issue now is how the grant processes for that money will be set up and administered such that the money - hailed as a once-in-a-lifetime opportunity, equivalent to government programs that brought electricity and modern highways to rural America - brings maximum benefit.

Politics has already played a part in the honing of the broadband stimulus. As this portion of the bill was being developed in both the House and the Senate, furious lobbying efforts reportedly took place behind the scenes as different interest groups and companies sought to shape this part of the bill to their advantage. At the same time, congressional turf battles pitted rural lawmakers against urban representatives, each of whom wanted to ensure that their jurisdictions didn't lose out.

The compromise plan provides $4.4 billion to extend broadband and wireless services to rural, suburban and urban areas through the U.S. Commerce Department's National Telecommunications and Information Administration, in addition to $2.8 billion to expand broadband access to rural areas through the Department of Agriculture's Rural Utilities Service.

Some observers question the wisdom of splitting the money into two pools, to be administered by different agencies that will have different approaches and criteria.

Beyond the politics of it all remains the fundamental challenge: ensuring that the money is not squandered on shortsighted projects, but rather is used to bring long-term benefits to a wide range of communities.

In early versions of the stimulus bill there were broadband requirements that set aggressive new benchmarks for speed and offered tax credits for achieving higher speeds. In final versions of the bill, however, legislators opted for expanded availability rather than pushing speed.

Right now, most communities want to know how to get their share of the broadband funding pie. Those details will emerge in the months ahead, and Digital Communities will cover this in some detail, both in future magazine issues and on the Digital Communities Web site,

In this issue - most of it written before President Barack Obama signed the stimulus package - we look at various proposals that were being made for enhancing broadband. Those matters remain, and how they are addressed will have much to do with determining the long-term results of the broadband stimulus. Digital Communities will be following this closely in the coming months.


Blake Harris Contributing Editor