$7.2 Billion For Broadband Is Largely Unallocated The stimulus package includes $7.2 billion to extend broadband Internet access to parts of the country where it's not widely available. The government has given out just a fraction of that money so far — and some applicants for the funding say major telecom companies are trying to get in the way.

$7.2 Billion For Broadband Is Largely Unallocated

$7.2 Billion For Broadband Is Largely Unallocated

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The Obama administration's stimulus package includes $7.2 billion to extend broadband Internet access to parts of the country where it's not widely available. The government has given out just a fraction of that money so far — and some applicants for the funding say major telecom companies are trying to block those projects.

One of the first grants to be awarded is going to a project known as the "Three Ring Binder" — basically three large fiber-optic rings that cover the entire state of Maine. GWI, an Internet and phone company in Biddeford, Maine, was lead sponsor on the application.

GWI President Fletcher Kittredge says the project will extend what's called "middle mile" infrastructure, bringing high-speed Internet access to rural parts of the state that currently don't have any.

"It's kind of the Maine turnpike of the telecommunications network," Kittredge says.

Kittredge's company was part of a coalition that applied for — and received — $25 million in federal money to build the project. The group includes the University of Maine and other local Internet companies. But it doesn't include the state's biggest Internet provider, FairPoint. In fact, the company helped write a state bill aimed at blocking parts of the plan. State Rep. Stacey Fitts introduced the bill, which would prevent the university from offering broadband to private customers.

"We have entities supported by the state like the university that are potentially in direct competition with people trying to eke out a living in the private sector," says Fitts, a Republican from Pittsfield.

FairPoint, which declined to comment for this story, is in bankruptcy. But Kittredge says rather than trying to fight the project, FairPoint could use the new fiber-optic lines to deliver broadband to more people.

"It doesn't have to be a threat," Kittredge says. "If they involved themselves in it, and fully understand what the opportunities are for them, they could really make a lot of this."

But so far, few of the nation's biggest Internet providers seem to be taking that advice.

"They aren't leading, they aren't following, and they won't get out of the way," says Craig Settles, author of Fighting The Next Good Fight, a book about broadband business strategy. He says the nation's biggest telecom companies have generally decided not to apply for federal stimulus money.

"They're not going to put proposals on the table because they don't like the rules," Settles says. "Yet they're not going to cooperate with the entities that are going after the money."

Settles says that's in part because the grants could force those carriers to share their wires with competitors. But there has been no shortage of smaller companies and municipalities that are applying for the stimulus money. The National Telecommunications and Information Administration (NTIA) has received more than 2,200 applications. Several of them came from a coalition of community groups and city government in Philadelphia.

The city's chief technology officer Allan Frank says the application — which so far has not been funded — calls for more computers in libraries and recreation centers in the poorest neighborhoods, as well as free wireless access in outdoor, public spaces.

"We don't expect to be providing the same sort of speeds in those public spaces as you can get when you pay," Frank says. "We're trying to focus on ... the neediest of the needy."

But it's the free public space wireless that has drawn an objection from cable and Internet giant Comcast. The Philadelphia-based company filed comments about the city's plans with the NTIA. The comments themselves are not public. Comcast spokesperson Sena Fitzmaurice says her company is merely pointing out that it already offers broadband in Philadelphia.

"We said the applications that should have priority were areas that were unserved, rather than areas that are already served by a commercial competitor," Fitzmaurice says.

Comcast and other big Internet companies have filed thousands of such comments on applications across the country. NTIA spokeswoman Jessica Schafer says it's impossible to say exactly how much weight those comments carry.

"The fact that there's an existing provider that offers some level of broadband service somewhere within the project's service area does not disqualify the project from funding," Schafer explains.

The NTIA has given out less than $300 million so far. Most has gone to grants that focus on "unserved" rural communities, like the Three Ring Binder project in Maine. But Todd Wolfson at the Media Mobilizing Project in Philadelphia wants to see more help for "underserved" urban communities where broadband is technically available, but still too expensive for many residents.

Wolfson says half of the people in Philadelphia don't have Internet in their homes. "They can't afford it," he says. "We need to solve this problem."

A second round of broadband grant applications is due in March. Wolfson says his group and the city plan to apply again.