Broadbanders Go for $100B in Stimulus

Written by R. Scott Raynovich - Light Reading

Thursday, December 18. 2008 at 11:00 AM EST 1 comment

Digg   Del.icio.us   Reddit   Email This

no ratings

• Login to Rate

The Obama administration-to-be is ratcheting up the proposed U.S. government stimulus package as high as $850 billion, and lobbyist organizations in the high-tech and telecom world want as much as $100 billion of that to go toward investments in broadband, according to multiple sources.

Bloomberg reported this morning that an Obama adviser has pegged the stimulus number at $850 billion. Congressional leaders had been saying that a package in the $400 billion range would be the minimum. So it appears the government package is getting more momentum behind it.

The Wall Street Journal this morning reported that broadband initiatives could reach as high as $100 billion in the stimulus package, based on requests from various groups.

Nothing draws the lobbyists better than a big new government honey pot. Many lobbyist groups are queuing up in the high tech and telecom world, asking for their handouts. Several groups are targeting broadband buildouts, saying the government should pony up between $40-$100 billion in stimulus, including tax incentives.

The Telecommunications Industry Association (TIA), which represents a wide range of communications equipment suppliers such as Alcatel-Lucent (NYSE: ALU), Cisco Systems Inc. (Nasdaq: CSCO), Ericsson AB (Nasdaq: ERIC), and Microsoft Corp. (Nasdaq: MSFT), is recommending that the U.S. government spend lots of cash on their industry (big surprise, eh?). "I am writing to urge you to include broadband deployment and adoption incentives in the economic stimulus bill Congress is planning to consider..." wrote TIA president Grant Seiffert in a letter to Congressional leaders.

Seiffert referenced a proposal by the Communications Workers of America (CWA) to create jobs via broadband investment. CWA president Larry Cohen believes that 100,000 new jobs will be created in IT and telecom for every $5 billion in investment. The CWA cites research from the Brookings Institute that a $5 billion spending plan that would create a 7 percentage point gain in broadband reach would create more than 2 million jobs. (Yes, we are looking for somebody to reconcile the math.)

One wonders where the United States Telecom Association is in all of this. Their Website is bare of new broadband stimulus proposals. In fact, they're so behind the curve, the only thing I could find was on the last stimulus package. Silly USTA, that was eight months and trillions of dollars ago!

Of course, it's difficult to quantify what all of this investment would mean specifically for digital content, but clearly more broadband would stimulate more economic benefit for all online activity.