Jan 6, 2010 2:29 PM, By Lynnette Luna

Only a fraction of the $4 billion scheduled to be awarded in first funding round has been doled out

Just before the Christmas holiday, the National Telecommunications and Information Administration (NTIA) doled out the first broadband stimulus awards, announcing $182-million worth of funds that will go to 18 projects. But that amount is a far cry from the $4 billion that is supposed to be awarded in the first round and highlights the arduous task both the NTIA and the Department of Agriculture's Rural Utilities Service (RUS) have before them in terms of evaluating the 2,200 proposals they received, collectively valued at $28 billion.

In what could for a harbinger of the future, fiber projects dominated the first wave of awards. These middle-mile projects are positioned to serve as the backbone network that other providers can interconnect with to expand broadband services to the masses.

Arizona, Alaska, Georgia, Maine, New Hampshire and Ohio were the six states that were awarded the $182 million in broadband grant money. Those projects collectively generated another $46 million in matching dollars.

The largest grant, $33.5 million, went to the North Georgia Network Cooperative for a fiber-optic ring that will deliver high-speed Internet connections to the northern Georgia foothills of the Appalachian Mountains.

Another fiber project received $25.4 million and involves Biddleford Internet Corp., a partnership between the University of Maine and service providers, which will build three fiber-optic rings across rural Maine. The network will pass through more than 100 communities with 110,000 households and will connect 10 University of Maine campuses.

"The middle-mile stuff makes sense," noted Craig Settles, head of Successful.com, a consulting company specializing in broadband access. "It's the path of least resistance ... I don't have to administer a bunch of small last-mile projects. I can do several middle-mile projects that can result in hundreds of miles of unserved areas getting broadband coverage."

Moreover, governors from each state were charged with providing NTIA and RUS their recommendations for which projects should receive funding, Settles said. A number of these recommendations focus heavily on wiring institutions such as municipalities, hospitals, libraries and universities. 

Plans are in place to issue another $2 billion in grants and loans within the next 75 days, which will push this next phase of awards into March. Still another $2 billion is supposed to be allocated in this first round, but the agencies so far have not indicated their plans for that allocation. The timeline for awards continues to slip, as the initial target set for completion of the first round was last November.

A total of $7.2 billion is supposed to be awarded over the coming year. The agencies have issued a request for information to obtain suggestions on how to award the $3.2 billion scheduled to be awarded in the second round.

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