Broadband Expansion Funded By $4 Billion Government Program

A whopping $4 billion in government loans and grants is on the brink of release for the expansion of broadband access to rural regions throughout the United States, Reuters reported on Wednesday.

President Barack Obama is taking an active role in promoting the project, as it encourages growth in the U.S. economy by creating jobs in the telecommunications sector.  The funds are included in a $7.2 billion initiative to build an inexpensive high-speed Internet structure in underserved areas.

"This funding is a down payment on the president’s commitment to bring the educational and economic benefits of the Internet to all communities," Vice President Joe Biden said in a statement.

The broadband program was imbedded into a $787 billion fiscal stimulus package signed into law by Obama in February.

The government will begin accepting applications for loans and grants July 14 through August 14. More specific information pertaining to the funding process can be viewed at www.broadbandusa.gov.

State and local governments and also non- and for-profit organizations are qualified to submit an application.

In effort to reach those American households and small businesses still without Internet access, the Commerce and Agriculture departments and the Federal Communications Commission are establishing a national broadband program. Officials now consider Internet a necessary service, rather than just luxury. 

Senior administration officials said the USDA and Commerce will review applications, announce a group of finalists on September 15 and begin notifying winners on November 7, according to the program schedule.

Some industry and public interest groups favored the release of the rules. The National Cable & Telecommunications Association, which represents Comcast Corp, Time Warner Cable Inc and Cox, said it is reviewing the guidelines.

However, U.S. Telecom, a trade group that represents Verizon Communications Inc and AT&T Inc, did not remark on the rules but said it was reviewing them.

The Open Internet Coalition, which strongly supports the guidelines, said they agree with the notion to prevent Internet service providers like Verizon and AT&T from giving preference to certain content.

According to the specifications, "This requirement ensures neutral traffic routing."

"The first major decision regarding broadband policy by the new administration sets a clear course in favor of the open Internet," said Markham Erickson, OIC executive director.

The grants and loans will be released in three rounds.  Of the $4 billion on the brink of release, $1.6 billion of grants will be administered by Commerce’s National Telecommunications and Information Administration and $2.4 billion of grants and loans by the USDA’s Rural Utilities Service.

The rules specify that the minimum Internet speed an applicant can provide is 768 kilobits per second (kbps) downstream, considered slow by some standards, and at least 200 kbps upstream to end users.

But, inevitably, competition will prompt applicants to offer higher speeds.