Broadband Stimulus Still Overlooks 40M Households

The $7.2 billion in broadband stimulus funds isn’t nearly enough to bring high-speed Internet access to 49 percent of households in the United States.

That’s the word from a new report published by Insight Research Corp., which found that, in spite of increased adoption fueled by the broadband stimulus program, 40 million households still won’t have broadband options by the end of 2014.

Robert Rosenberg, president of Insight Research, said the Obama Administration understands the direct relationship between broadband access and America’s economic health. But, he added, “the current allocation of funds is just not going to get the job done.”

Spending $6.4 billion amounts to an investment of $164 per household to get broadband access to households that need it, Insight Research found. That small number “casts serious doubt that any significant expansion of broadband access will result from this government action,” Insight Research said in a press release. “This position is further bolstered by the argument that, at the current estimate of $1,500 per household, at least $60 billion would be needed to deploy universal broadband access.”

Part of the problem is a lot of people don’t have computers.

“Our analysis found that a substantial portion of the 49 percent without broadband had no computers in their homes,” Rosenberg said. “There is a chicken and egg problem here that needs to be considered by our policy makers.”

To that point, there may be some hope. Sen. Jay Rockefeller, D-W.Va., last week introduced a bill that would reform the Universal Service Fund to help pay for low-income users’ monthly broadband access and even help those subscribers buy the necessary computer equipment.

In the meantime, the question of the broadband stimulus efficacy remains. The National Telecommunications and Information Administration (NTIA) and Rural Utilities Service (RUS) have yet to name recipients of the first round of grants and loans. All of the money must be distributed by Sept. 30, 2010.

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