Stimulus broadband eligibility requirements in progress will decide how local governments, nonprofits and vendors get their shares of the $7.2 billion for local broadband stimulus detailed in President Barack Obama's signed stimulus bill. Two federal agencies will distribute the money and each will write its own eligibility requirements. Most of the stimulus -- $4.7 billion -- will come from a bureau of the U.S. Department of Commerce called the National Telecommunications and Information Administration (NTIA). The NTIA's share will fund both urban and rural broadband while the Rural Utilities Service (RUS) -- part of the U.S. Department of Agriculture -- will distribute the remaining $2.5 billion for rural broadband exclusively.

Local governments should participate in the public comment periods the two federal agencies will likely hold before inking their eligibility requirements formally, warned Craig Settles, a municipal broadband analyst. Given that vendors and nonprofits will compete for the dollars alongside governments, municipalities should at least demand requirements forcing vendors and nonprofits to collaborate with cities and counties on any deployments, Settles recommended. With no local government input, vendors and nonprofits could build networks that grow their own bottom lines, but don't serve the goals of the local governments. For example, a municipality might want the network to support job creation, health care, telemedicine and digital inclusion. Different forms of broadband serve different types of goals better than others.

"It's a question of whether or not you get fiber or wireless. If you get wireless, do you get Wi-Fi or WiMAX or some variation of that?" Settles said.

Local governments should also insist that the NTIA and RUS keep state bureaucrats and legislators out of the process, Settles cautioned.

"If cities can't go directly to the federal government, they're going to have to ask, ‘What are the state stipulations?'" Settles warned, later adding, "If you're in a state like Louisiana, that's problematic because the state's Legislature, thanks to incumbent influence, is decidedly hostile to community networks."

"Every layer of government that steps into this process is a potential bottleneck. They have different influencers, different agendas," Settles remarked.

The directors of the NTIA and RUS, which Obama has yet to appoint, will decide the eligibility requirements. The bill assigns no deadlines for completing those requirements, but they'll likely come soon because the money needs to be spent by 2010, Settles said. He predicts local governments with written municipal-broadband strategies that got shelved after the municipal-Wi-Fi fad ended will be the first recipients. Governments will simply adjust those strategies to satisfy whatever requirements the federal government publishes, Settles speculated.