Local telecoms see opportunity in rural broadband stimulus package

Michael Morisy
02 Jun 2009

Larger service providers are passing up potential federal broadband stimulus package grants, but some rural broadband carriers see a potential boon in a tough industry.

Cinergy MetroNet, for example, has ambitions to double the number of Midwestern communities it serves to about 22 if it can get a share of the $7.2 billion in the broadband stimulus fund that will be doled out by the federal government. The Obama Administration's broadband stimulus package is targeting local telecom service providers like Cinergy that want to provide rural broadband access for the first time.

"Larger providers like Verizon have given indications that they're not interested in the money due to the strings attached," said Vince Vittore, an analyst with Yankee Group.

These potential strings (since little about the broadband stimulus package is quite final yet) include rules about network sharing, which is common in Europe but a major bone of contention for many US service providers.

"'That would be a significant policy shift for most of the service providers out there," Vittore said. "There's even the possibility of foreign entities like BT coming into this market to get government money."

Local service providers are seeing opportunity, however, particularly since the broadband stimulus stipulates that all 50 states must receive at least some funding.

John Cinelli, president of Cinergy MetroNet, said those conditions make his company the perfect recipient for a grant as it tries to replicate the successes it has had in towns around Indiana with populations below 20,000.

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