Broadband stimulus: Wireless makes sense, but check the ROI

Improving essential US infrastructure was one of the many objectives of The American Recovery and Reinvestment Act of 2009. While this was primarily aimed at correcting the long-term neglect of America's highways and bridges, it also included funding to increase the amount and quality of broadband access, known generally as the broadband stimulus.

In terms of the broadband stimulus funds, the rules for evaluating broadband proposals were somewhat byzantine, consuming 120 pages of tightly-written prose. But they made one thing clear: Wireless broadband solutions would be an acceptable response and would be encouraged, in fact.

It's not surprising that when the initial broadband stimulus proposals were received on Aug. 14, more than half of those publicly disclosed were based on wireless technology. Of the rest, several were for broadband long-haul implementations, and a few were for fixed infrastructure deployments (submissions by municipalities have not been made public so far).

Interestingly, not one of the Tier 1 wireline carriers submitted a proposal. What seems to be happening here is that the broadband stimulus bill is evolving into a wireless broadband stimulus bill.

This is not terribly surprising given the nature of the geographic areas the bill was designed to address. The directive to the Federal Communications Commission (FCC) and National Telecommunications and Information Agency (NTIA) was to apply stimulus dollars to unserved or underserved areas. By definition, underserved means a region where no more than 50% of households have access to facilities-based, terrestrial broadband service, and unserved means areas with less than 90% availability of broadband access.

At least $2.9 billion was specifically earmarked for rural broadband projects. Coincidentally or not, the funding favors areas where wireless technologies would tend to make the most sense.

Wireless projects make better sense in rural areas from an economic standpoint. For the same amount of funding that would deploy a rather limited amount of fixed infrastructure, a relatively vast area can be covered with a few cell sites. Given the rural nature of much of the US, the virtues of wireless are clear.