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Saturday, February 7, 2009

Broadband Infrastructure Included in Stimulus Package

Broadband funding in stimulus plan sparks debate (AP)
Posted on Fri Feb 6, 2009 9:27AM EST
From Yahoo! News
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The gist of this article is that the President's stimulus package includes some good old "pork" in the funding barrel for his over $900bn blow out. It does not specify how much is earmarked for expanding broadband, but speculates $6bn to $9bn. Here is an excerpt:

"These investments will create new jobs up and down the economic food chain, said Robert Atkinson, president of the Information Technology and Innovation Foundation. His group estimates that a $10 billion investment in broadband would produce as many as 498,000 new jobs.

Those include the construction workers and telecommunications technicians who must dig up streets, lay down fiber-optic lines and install wireless towers, as well as the engineers and factory workers at companies that make the fiber, electronics and computer equipment needed to build the networks."

"WOW, that sounds great!" you might say ... and it does, until you do a little simple math. Let's see here, $10,000,000,000 / 498,000 = $20,080.32 / job. OK, so which of you Telecommunications Engineers and other high tech folk are going to rush off for one of these jobs? Any takers? Another thing to keep in mind is that they are talking about a one time investment of $10bn, so is that $20,080.32 supposed to be stretched over 5 years? 10 years?

All this "broadband infrastructure" won't appear overnight. Heck it will take well over a year of planning before they even consider beginning. Most of the money will probably be eaten up by red tape and bureaucracy before they get to the implementation phase.

Now, before you go and get all "this guy is against the 'Stimulus Package'" on me, let me say, I do believe we need either a good stimulus package to help the nation get back on it's feet or we need to buckle our belts and be prepared to wait it out. I am not really sure one option is better than the other.

I am afraid that the current proposed stimulus package will be bad for my wallet in the long run and will fail to get results. The money will just be spread too thin (too many projects), and going back to the example of broadband - what will happen when only 10% of the 14% (example: 14% of 100,000 = 14,000 and 10% of 14,000 = 1400), who geographically do not have access to broadband, sign up for the service? Either MY broadband rates will go up or my tax rate will go higher to cover the shortfall.

A good stimulus package would focus on core consumer spending and limit its scope to the most critical areas. I mean, does an 80 year old farmer in the middle of nowhere really need, or want, broadband Internet? Or does he just need someone to buy his crops?

Commentary by Jeff

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