After sitting out the first round of broadband stimulus funding, US West (Qwest) has roared back for round 2, asking for $350 million from the federal government for a $467 million project that spans its 14-state coverage area.
In its application, which is not yet available on the database, Qwest proposes to build facilities to serve more than half a million homes, schools, businesses and hospitals with broadband Internet services supporting download speeds of 12 to 40 Mbps.
The following describes what the company plans to provide for the states in New West‘s coverage area. (Percentages may not add up to 100 due to rounding.)
Colorado: $100 million (21 percent), providing 510 new sites, with 107,634 upgraded or newly served living units and reaching 17,452 businesses. This would result in the creation or retention of 5,000 jobs, and increased state tax revenue of $10.4 million, for $196,078 per new site.
Idaho: $26 million (6 percent), providing 130 new sites, with 29,992 upgraded or newly served living units and reaching 6,402 businesses. This would result in the creation or retention of 1,300 jobs, and increased state tax revenue of $4.3 million, for $200,000 per new site. The company did not say what relationship this grant would have with the Idaho Education Network, which is awarding $3 million over the next two years, primarily to Qwest, to build the network.
Montana: $28.7 million (6 percent), providing 132 new sites, with 25,773 upgraded or newly served living units and reaching 5,228 businesses. This would result in the creation or retention of 1,435 jobs, and increased state tax revenue of $4.4 million, for $217,424 per new site.
Oregon: $59.1 million (13 percent), providing 289 new sites, with 71,483 upgraded or newly served living units and reaching 14,046 businesses. This would result in the creation or retention of 2,955 jobs, and increased state tax revenue of $12 million. for $204,498 per new site.
Utah: $17 million (4 percent), providing 75 new sites, with 19,138 upgraded or newly served living units and reaching 2,445 businesses. This would result in the creation or retention of 850 jobs, and increased state tax revenue of $1.9 million, for $226,667 per new site.
Wyoming: $15.1 million (3 percent), providing 60 new sites, with 15,803 upgraded or newly served living units and reaching 1,108 businesses. This would result in the creation or retention of 755 jobs, for $251,667 per new site. (Wyoming doesn’t have an income tax.)
Other states covered by the proposed grant include:
Arizona: $55.5 million (12 percent), providing 278 new sites
North Dakota: $2.7 million (1 percent), providing 9 new sites
South Dakota: $5.1 million (1 percent) , providing 17 new sites
Nebraska: $4.6 million (1 percent), providing 17 new sites
Washington: $54.4 million (12 percent), providing 249 new sites
New Mexico: $14.4 million (3 percent), providing 64 new sites
Minnesota: $54.5 million (12 percent), providing 228 new sites
Iowa: $29 million (6 percent), providing 130 new sites
(The Stimulating Broadband website, which analyzes broadband stimulus funding, will also be doing a more detailed analysis of the Qwest application, which will be added to this article when it is published.)
Whether Qwest gets the grant is another question. The largest grant awarded in the first round was $126 million, according to an article in Network World. The U.S. Department of Agriculture’s Rural Utilities Service has $2.4 billion of the $7.2 billion in stimulus funds, and $1.05 billion was already awarded in the first round, according to an article in the St. Paul Pioneer Press. Grants are expected to be announced by Sept. 30.
Even if the grant is awarded. it is not clear how many users might get broadband who didn’t have it before; living units were categorized as “upgraded or newly served,” meaning that the result could simply be that existing users would get faster broadband, and that users without it might still be without it. The company did not say what percentage of residents in each state could end up with broadband Internet access.
The company has been criticized for how it has implemented broadband Internet in the past. In 2006, Qwest received $5 million from the state of Idaho to improve rural connectivity —and, according to a 2007 report, spent the money inefficiently by increasing service in places where it already existed. Similarly, a number of Internet service providers in Idaho complained this year that Qwest was building new connections rather than making use of existing infrastructure.
Outside Idaho, “Qwest for years has sent their lawyers after communities who, unhappy with Qwest service, wanted to deploy their own broadband,” wrote Karl Bode, in the blog DSL Reports. “They’ve fought against Seattle’s attempt to deploy fiber, and in Utah Qwest sued the Utopia FTTH project in an effort to prevent them from using regional utility poles.
“Christopher Mitchell, director of broadband programs for the Institute for Local Self-Reliance, a Minneapolis advocacy group, called Qwest hypocritical for seeking government aid,” said the Pioneer Press. “Subsidies “should not be used to cement monopolies, they should be used to expand infrastructure that open to all,” he said.”
What led Qwest to apply for the second round of funding, when it had skipped the first round? Several factors, but the primary one was a change in funding that will pay 75 percent of the expense, rather than the 50 percent paid in the first round, according to Bob Gravely, media relations representative for Qwest in Washington, Oregon, Idaho, and Montana. “That was the big one for us,” he said. Another factor was removal of a requirement that projects be at least 60 miles away from a city.
If the grant is awarded, creation of the infrastructure is likely to start in 2011. And if it isn’t? “It’s not something we will try to do on our own if our application is rejected,” Steve Davis, Qwest’s senior vice president of policy and government relations, told Network World.