Many interested in broadband stimulus funds

August 27, 2009

(AP) -- "Cash for Clunkers" isn't the only economic stimulus program to attract a lot of takers.

The federal government said Thursday it had received requests for a total of $28 billion from groups that want to expand high-speed Internet service in the U.S. The government has $4 billion in loans and grants initially available.

The 2,200 requests came from states, counties, Indian tribes, nonprofits, phone companies, libraries, universities and other groups.

The money will be used to connect rural homes to the Internet, stimulate interest in getting Internet service among groups that don't use it much and expand Internet access in public locations like schools and libraries.

The bulk of the requests - worth $23.2 billion - are to build out Internet lines.

The National Telecommunications and Information Administration and the Rural Utilities Service will pick the winning applicants and announce them in November.

Though competition appears stiff for the first round of financing, those who lose out will have two more rounds in which to compete before the money runs out.

Under Cash for Clunkers, the government paid out nearly $3 billion to discount 700,000 newer cars as replacements for older gas guzzlers.

That program was funded under a $787 billion economic stimulus bill passed in January that also provided $7.2 billion in funding for broadband projects. Because some of this money will be used to fund loans, the total dollar amount handed out will be higher than that.

It is the first time the federal government is making a concerted, large-scale effort to expand Internet access.

The largest phone and cable companies have shown little interest in participating in the program. Qwest Communications International Inc., a phone company that covers vast, thinly populated areas in the West, said it couldn't make a business case for applying.

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