WASHINGTON — The Obama administration has made a national priority of spreading high-speed Internet access to every American home and has offered stimulus money to help companies pay for it, but the biggest network operators are staying away from the program.
Thursday is the deadline to apply for $4.7 billion in broadband grants, and AT&T, Verizon and Comcast don’t plan to go for the stimulus money, sources close to the companies said.
Denver-based Qwest, Colorado’s largest telecommunications company, also said it would not apply because it was unable to make “the business case for filing an application.”
“We will continue to evaluate the program and determine whether to apply in future rounds,” said Steve Davis, senior vice president of public policy and government relations for Qwest.
The reasons for not applying are varied for Verizon, AT&T and Comcast.
All three say they are flush with enough cash to upgrade and expand their broadband networks on their own. Some say the appearance of taking money could draw unwanted scrutiny of business practices and compensation, as seen with automakers and banks that have taken government bailouts.
Privately, some are griping about conditions attached to the money, including a net-neutrality rule.
“We are concerned that some new mandates seem to go well beyond current laws and FCC rules, and may lead to the kind of continuing uncertainty and delay that is antithetical to the president’s primary goals of economic stimulus and job creation,” said Walter McCormick, president of USTelecom, a trade group that represents telecom companies including AT&T and Verizon.
Yet those firms might be the best positioned to achieve the goal of spreading new networks to underserved areas, some telecom policy experts say.
“If you want to get broadband out, you have to do it with who brought you to the dance in the first place,” said Robert Atkinson, president of the Information Technology & Innovation Foundation, a Washington think tank. “This is not basket weaving. This is really complex and intensive technical stuff that takes a fair amount of sophistication and scale to be able to do right and to continue to upgrade.”
The stimulus funds target homes and businesses that have largely been overlooked by broadband providers because of the hefty costs to lay down fiber and other broadband pipes to small communities.
At the same time, the government has promised more scrutiny of industry practices that seem to limit people’s access to services, such as Comcast’s blocking of online video provider BitTorrent last year and Apple’s decision this summer not to run Google’s voice service or free Internet calling service Skype on the iPhone.
Some of the biggest carriers fear that a clause in the stimulus plan that says recipients of the grants cannot “favor any lawful Internet applications and content over others” — the concept known as net neutrality — could lead to more rules down the road. The companies paint dire scenarios where new rules would lead to networks getting clogged with spam and too much video content, slowing down service for all users.
“It’s not cost-effective for the big network operators to play in rural (markets) in the first place, and if they take federal money that comes with all these strings attached to it, they are opening themselves up to being regulated even further,” said Roger Entner, head of communications research for Nielsen IAG.
But the federal departments handing out stimulus grants say work can can be done without the big carriers. Smaller operators may introduce more competition into the industry by using the funds to build new networks, analysts and government officials say.
Denver Post staff writer Andy Vuong contributed to this report.
