One fear was that the major carriers would slurp up the majority of the $7.2 billion in money set aside in the federal stimulus package to extend broadband connections to unserved regions, largely in rural areas. Now the Washington Post’s Cecilia Kang reports that as an initial deadline for applications approaches on August 20, the broadband giants — AT&T, Verizon an Comcast — are unlikely to seek any of the money.
“Their reasons are varied,” Kang writes. “All three say they are flush with cash, enough to upgrade and expand their broadband networks on their own. Some say taking money could draw unwanted scrutiny of business practices and compensation, as seen with automakers and banks that have taken government bailouts. And privately, some companies are griping about conditions attached to the money, including a net-neutrality rule that they say would prevent them from managing traffic on their networks in the way they want.”
That and there was the requirement that this money be spent in rural America. “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. There simply isn’t enough demand in rural areas for the big boys to want to dive into rural markets, another analyst told Kang.