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Saturday, December 5, 2009

South Dakota Groups Apply for $250 Million in Broadband Stimulus

Among the stimulus dollars still to be pumped into the economy: $4 billion in grants and $3.2 billion in loans to expand broadband Internet access to underserved areas. The feds have received 1130 applications to build "last-mile" services—the projects that lay the cable or erect the towers that get signal to people's houses and businesses. A quarter of those applications have come from companies and organizations looking to extend WiMAX wireless systems. Nationwide, WiMAX vendors have submitted $1.6 billion worth of requests for stimulus funding, out of a pile of last-mile funding requests totaling $14.2 billion.

WiMAX—that's the technology Sioux Valley Energy uses to beam out Internet signals from the top of the Madison hi-rise to an eight-mile service radius. Sioux Valley also has WiMax transmitters in Hartford and Brookings (Brookings?! I hadn't heard about that one!). A search of the NTIA database of broadband stimulus apps shows Sioux Valley is applying for $480,000 to extend WiMAX service to four communities.

Sioux Valley's grant request is the smallest broadband stimulus received from a South Dakota organization. Twelve different South Dakota organizations have applied for over $250 million in grants to extend broadband service. The biggest request: Pierre-based Dakota 2000, Inc., is seeking $132 million to build a fiber-optic cable network that would connect all Native American tribes in South Dakota, North Dakota, and Montana. That ambitious project is just one portion of a proposed Ring of Nations that aims to connect tribes all across America to Native-owned broadband service.

Among the reasons to hope Uncle Sam approves South Dakota's broadband stimulus apps: according to a 2007 Brookings Institution report by Robert Crandall, William Lehr, and Robert Litan, every 1% increase in broadband penetration in a state is associated with a 0.2% to 0.3% increase in non-farm employment. Hmm: In October, South Dakota had 406,500 non-farm workers. Increase broadband penetration in the state by 1%, and, if Crandall et al. are right, we could easily add 800 new jobs. That would almost erase joblessness in Madison and Brookings. Increase broadband penentration by 10%, and we could put 8000 people to work and drop the state unemployment rate back below 3%.

Dang: maybe the LAIC needs to subsidize broadband access in Lake County to bring down our 7% unemployment rate. Or maybe South Dakota should look at a plan to turn the whole state into one big wireless hotspot.

1 comment:

  1. My employer, Qwest Communications, looked into the broadband stimulus. The federal government has many strings attached to that money.

    1) All profits created for the next 5 years go back to Uncle Sam.

    2) Uncle Sam will give the direction of the broadband push.

    In our company we have a debate - do we provide broadband for all, or do we place fiber to the curb in our metro's. Mnpls, Dever, Phoenix get upgrades while the rurals keep getting what they always have - dialup.

    The rub is the customer has always been paying extra fees and taxes to pay for upgrades but that money has gone to other federal programs.


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