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Stimulus could revitalize muni Wi-Fi, other stalled projects

By Matt Hamblen, Computerworld
February 23, 2009 07:42 PM ET

Computerworld - Could $7.2 billion in federal funds committed to boost broadband in the U.S. transform small towns like Truckee, Calif., into the next Mumbai, India, filled with beehives of call centers that employ local residents?

Stimulus bill aims for 'national broadband plan'

The money won't be a major boon to any one town, certainly not on the scale of Mumbai, a major city famous for its many call centers that handle technical support calls from U.S. computer users.

But the federal money is seen by many broadband analysts as a critical means of building new or completing hundreds of stalled municipal Wi-Fi and other broadband projects nationwide.

The money could definitely breath life back into the old, mostly failed municipal Wi-Fi movement that first came to life in 2004 and deteriorated to a terminal state last year, said Craig Settles, an analyst and president of consulting firm

"Most assuredly, the [broadband stimulus package] could reinvigorate municipal Wi-Fi," Settles said in an interview today. "Lack of money has indeed been a big factor."

The federal money for broadband was contained in the $789 billion economic stimulus package sign into law last week by President Obama.

What's more, with a strong financial shot in the arm, rural towns and suburbs could begin offering broadband to attract companies in addition to offering lower office rents than those demanded in big cities, Settles said.

That kind of economic growth in new locations could lure companies to build in the U.S., rather than moving jobs abroad, Settles said.

Asked whether the stimulus plan could mean call centers such as those in Mumbai could start showing up in central Kansas, Settles said, "It depends on how fast the stimulus works, but there is pent-up demand in the U.S. for broadband. If a company wanted to expand a business, broadband could decide if they go to rural Kansas rather than Milwaukee and would be a driver to get a company to open a business in a smaller community with less overhead. Generally, it might still be cheaper to go abroad, but broadband would help companies afford to build not just call centers but IT service operations."

Opening such businesses in the U.S instead of abroad would certainly lessen "administrative hassles," he added.

The broadband provision of the stimulus package requires governments and entities to use broadband construction funds within two years of receiving a grant under the plan. A big question is how two government agencies, the National Telecommunications and Information Administration of the U.S. Department of Commerce and the U.S. Department of Agriculture's Rural Utilities Service, will set up details for the requests for proposals to get access to the funds. Decisions on those details are expected to be posted on the Obama administration's Web site in the next 60 days or so.

Broadband has come to mean Internet services with speeds of 2Mbit/sec. Many analysts say Internet service would need to be available at speeds greater than 2Mbit/sec., whether over Wi-Fi, WiMax, fiber, wireless WAN or other technologies.

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