Let Them Eat Cake

No this is not about Wall Street. It’s not about the U.S. Congress either. (Even though both would qualify.) Instead this is about broadband, the (at last count) $6 billion of the proposed stimulus bill devoted to “getting broadband out,” and the terrestrial guys holding their noses over it all.

That $6 billion, some telco and cable guys have sniffed, is simply not enough. Not enough to get them interested in building their infrastructure out to rural America; not enough to even consider.

They have a point. The cable companies, for example, say they spend around $30,000 for each mile of fiber optic construction. It takes another $1,200 or so to connect each household. So $6 billion to wire rural America? Ha! ... a drop in the bucket.

And even if all that money did go to the cable/telco crowd to reach wide open spaces, it would be a huge waste. Because, in fact, those wide open spaces are already built out. Just about every ranch, farm and cabin in the country can already get broadband at speeds higher than the 3Mbps downstream and 1Mbps upstream mandated for “advanced wireless” in the stimulus package.

This existing infrastructure (big surprise here) is called satellite broadband. It’s provided by companies like Hughes and WildBlue. According to estimates provided by Hughes, it already serves somewhere around 750,000 Americans and employs around 20,000 people.

So I asked Hughes SVP Mike Cook about the whole broadband stimulus thing and he laughed. “By the time the (cable and telco) guys get around to digging up the prairies and putting fiber in, the economic crisis will be long past,” he pointed out.

On the other hand, government monies spent on incentives to purchase customer premise equipment for satellite broadband could equal an immediate payout. With a little help from Uncle Sam, Cook said, “We think the industry could at least double the rate of subscriber acquisition.” That, in turn, could ad “tens of thousands” of jobs for installers, call center personnel and the like. And “the impact would be immediate.”

So here’s my thought of the day for the folks in D.C.: Take a big chunk of whatever money is allocated to broadband and spend it on the infrastructure that’s already been built and paid for by satellite broadband providers. Get rural America hooked up to broadband in a matter of weeks and months rather than years. Add some jobs now. And leave the prairie critters in peace.