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Cable Technology Feature Article

November 06, 2009

NCTA Chief Urges Feds to Rethink Stimulus Plans, Forms Petition

By Kelly McGuire, TMCnet Editor

With recent commentary from some industry professionals on the possibilities of satellite assisting the broadband stimulus initiative, it seems many other telecom industry sectors have opinions to express about the seemingly stagnant broadband situation.

In piggy backing the satellite industry’s comments, the head of the leading cable industry association today took aim at the government's efforts to spur broadband deployment, arguing that rather than funneling billions of stimulus dollars into new networks, the money would be better spent on programs to drive adoption of the technology. 

Kyle McSlarrow, the president and CEO of the National Cable and Telecommunications Association, or “NCTA (News - Alert),” said his peace regarding the broadband issue at a recent conference. Following the discussion, NCTA submitted a petition to the Federal Communications Commission urging the agency to cut back on the subsidies it distributes to telephone companies in favor of programs to spur broadband adoption and deployment. 

“If the stimulus package and the broadband fund is going to be a success, the way we need to think about this is to think about this in terms of broadband adoption,” McSlarrow said. “We have it a little backwards right now.”

While the economic stimulus package set aside $7.2 billion for broadband projects, only $250 million of that lump sum was earmarked for programs to drive sustainable adoption. Additionally, another $250 million was allocated to community facilities upgrades, with another $350 million for mapping programs. 

McSlarrow, however, argues that companies represented by the NCTA and, namely, himself, offer high-speed Internet access to 92 percent of U.S. households that split gives short shrift to the demand side of the broadband equation. 

“There are a lot of reasons why people who have broadband at their doorstop don't take it,” he said, focusing in on the broadband research of the Pew (News - Alert) Internet Project, which has identified a significant segment of Americans who don't see the value in broadband service. 

One way to address these issues is to take a step back and valuate where these funds should really go, McSlarrow said, adding that the stimulus “seemed to me a little bit of a mismatch between the goals and the means.

In regards to the petition, NCTA argued that the FCC's (News - Alert) Universal Service Fund wastes as much as $2 billion funneling money to rural phone providers in areas where unsubsidized companies are already operating and the market is competitive. 

“The commission's high-cost support mechanisms are premised on the assumption that a particular location would not have affordable service available but for the support provided by the program,” the group said in its petition. “But in markets with extensive facilities-based competition, that assumption no longer holds true.”

Kelly McGuire is a TMCnet Web editor, covering CRM and workforce technologies, and anchor of its daily TMC Newsroom video broadcast. Kelly also writes about eco-friendly "green" technologies and smart grids, compiling TMCnet's weekly e-Newsletters on those topics, as well as the cable industry. To read more of Kelly's articles, please visit her columnist page.

Edited by Kelly McGuire