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Obama's stimulus package promises New Deal for broadband

The inclusion of broadband deployment in the stimulus bill currently making its way through Congress is a positive sign, according to analyst firm Strategy Analytics Inc.

The firm, which late last year published a report on the topic titled "Sputnik Moment: The Call for a National Broadband Policy," says it is pleased to see progress being made. Current versions of the bill in Congress earmark between $6 billion and $9 billion for broadband deployment, largely for the expansion of high-speed Internet to rural and underserved areas.

"Our feeling is that for extremely rural areas, wireless broadband is probably the only viable option," said Ben Piper, Boston-based analyst and director of broadband research for Strategy Analytics. "The current House bill sets aside grants for advanced wireless broadband services, defined as a service delivering to the end user data transmitted at a speed of 3 Mbps downstream and at least 1 Mbps upstream.

"Those speeds are really at the theoretical maximum of what EVDO can offer, so I think this would likely be an LTE play, and WiMax could likewise step in," he said. "An additional provision of the bill requires 'open access networks,' the definition of which is to be defined by the FCC within 45 days of the bill's passage.

"Verizon, with its nationwide block of 700MHz spectrum for LTE, which includes open access provisions, could be very well positioned to deliver."

Strategy Analytics offers market intelligence on automotive electronics and entertainment, broadband connected home, mobile and wireless products and systems, and virtual worlds.

Strategy Analytics works with clients through annual multi-client services, management team workshops and custom consulting engagements.

Some sources suggest that the stimulative effect of the government spending could translate into many new jobs.

In fact, the Information Technology and Innovation Foundation, or ITIF, a non-partisan think tank, has estimated the possibility of roughly 500,000 broadband-related jobs as a result of a $10 billion investment.

This renewed emphasis on broadband deployment is an important step forward for the United States which, in the opinion of Strategy Analytics, has lost its broadband foothold.

The report cites statistics placing the United States behind its European and Asian counterparts in the "metrics that matter," including speed, availability, penetration and price.

South Korea, widely viewed as the leader in residential broadband deployment, recently unveiled plans to build out a fiber-optic infrastructure capable of delivering 1 Gbps service to the home by 2013.

In addition, the report identifies parallels between current broadband deployment efforts and rural electrification policy under President Franklin Delano Roosevelt's "New Deal" in the 1930s.

The passage of Rural Electrification Act in 1936 is largely credited with getting rural America "on the grid."

Both the broadband and electrification policies hinge on the belief that increased access translates into improved competitiveness, according to Mr. Piper.

"America's broadband policy over the past eight years has been characterized by nebulous goals and inaction," Mr. Piper said. "The country now finds itself trailing the developed world in virtually all aspects of broadband.

"We are pleased to see the U.S. finally taking broadband deployment seriously," he said. "South Korea's recent announcement further underscores the need for quick and decisive action."