[1st-mile-nm] Qwest Passes on Broadband Stimulus funding

[Richard Lowenberg]

Qwest passes on stimulus funds for broadband expansion, citing rules

New Mexico Business Weekly
Wednesday, August 12, 2009

Qwest Communications International Inc. won?t apply for the first round of a
$7.2 billion federal stimulus program expanding the reach of high-speed
Internet because participating under its current rules doesn?t make financial
sense, the company said.

The federal government?s National Telecommunications Information
Administration and the U.S. Department of Commerce?s Rural Utilities Service
are dispersing $4 billion in loans and grants in a first round of funding for
which the application deadline is Aug. 14.

Denver-based Qwest, the nation?s third-largest local phone company, sat out
the first round and appears to have joined the ranks of telecoms that would
like to see the rules changed for future rounds of the broadband stimulus
program.

?We continue to support the use of program proceeds to facilitate the
deployment of broadband services to unserved consumers,? said Steve Davis,
Qwest?s senior VP for public policy, in a written statement. ?However, upon
evaluation of the funding opportunity and the various requirements for
participation, we were unable to make the business case for filing an
application for more rural opportunities.?

Qwest serves a 14-state swath stretching from Iowa to the Pacific Northwest to
Arizona and New Mexico. With so much of rural America in its territory, the
company has been enthusiastic about the goal in American Recovery and
Reinvestment Act (ARRA) of expanding broadband access to unserved areas.

The company wanted stimulus money to fund the neighborhood-level broadband
networks that cost too much to realistically build in less populated areas.

The rules setting out how the money would be awarded were published in early
July. The agencies said they?d re-evaluate the rules after the first round
and consider changing them for the remaining $3.2 billion in funding.

The rules have been criticized for skewing much of the stimulus money to
projects connecting people living at least 50 miles outside cities and towns
instead of larger populations of rural dwellers living closer to communities,
and for putting applications covering slower-speed wireless broadband services
on the same footing as wireline services with faster download speeds.

U.S. Telecom, a broadband industry association that Qwest joined last month,
wrote to U.S. Agriculture Secretary Tom Vilsack and Commerce Secretary Gary
Locke urging that the agencies not wait and change the rules immediately.

?Our member companies have identified more than 1 million rural households
they are prepared to serve if the rules are modified in a manner that minimizes
uncertainty and recognizes the tremendous economic hurdles to delivering
broadband to rural consumers,? said the letter from Walter McCormick, Jr.,
CEO and president of U.S. Telecom.

Qwest is a major telecommunications provider in New Mexico.

(Greg Avery of the Denver Business Journal, an affiliated publication, compiled
this report.)



-- 
Richard Lowenberg
1st-Mile Institute
P.O. Box 8001, Santa Fe, NM 87504
505-989-9110;   505-603-5200 cell
rl at 1st-mile.com  www.1st-mile.com

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