Although a number of cities applied to the National Telecommunications and Information Administration (NTIA) for broadband infrastructure grants, none received them.

The few broadband grants that went to cities focused on increasing broadband use, not infrastructure. Los Angeles and Boston received stimulus funding for public computer centers, for example, while New York and Chicago got grants for outreach and training.  The dollars directed at cities totaled $38 million, only 3 percent of $1.2 billion in the Recovery Act grant money so far distributed. Instead, rural areas were by far the major recipients of the first round of broadband dollars.

Karen Mossberger, professor of Public Administration at the University of Illinois at Chicago, has written extensively about broadband and the digital divide. She thinks the lack of funding for cities has been a big mistake and that the goals of the Recovery Act’s broadband provisions – to stimulate the economy, spur job growth, and narrow gaps in broadband adoption – fit well with a focus on cities.  “Cities are important nodes in the economy," she says, "and investments in high speed networks can help economic development and assist community institutions in terms of energy efficiency, smart grid management, better transportation systems,  and homeland security. If you’re looking to stimulate the economy, it’s important to invest in cities and if you’re going to try to address gaps in broadband adoption, cities matter."

So, then why didn't cities get a bigger slice of the pie?
  

The most obvious answer is that they simply don’t have the kinds of access problems that exist in rural America. According to a survey conducted by the Pew Internet and American Life Project at the end of 2009, 47 percent of rural residents connect to the Internet at high speeds. That’s compared to 61 percent in urban areas.

The access problem in cities stems from very different issues than in rural America.  In the latter, private firms may steer clear of an area because they cannot make a profit serving a limited number of people  In cities, private sector service may be available, but unaffordable.

“For the infrastructure grants, the eligibility requirements were meant to make it difficult for cities to qualify,” Mossberger says.  “They had to prove that less than 40 percent of the population had broadband subscriptions in the areas they wanted to improve. Telecommunications firms had a lot of leeway to challenge cities on whether they were actually underserved." In fact, she says, private firms were able to knock cities out of the contest using proprietary data that was never even shared with the cities. Mossberger believes that telecommunications firms objected to the federal government "providing funds for infrastructure where there are already market providers. They don’t want to see more competition on their turf.”

Distribution of the first round of grants was finished in April. NTIA is currently deliberating on the second round, which will include another $2.35 billion for infrastructure and $250 million more for outreach, training and public computer centers. There are a few changes in the grant application requirements that may open the door to more city grants. One key issue is a greater emphasis on connecting anchor institutions within a community, like hospitals, schools and public and non-profit institutions.  That may work more favorably for cities because there are lots of those types of institutions in urban areas.

Still, Mossberger is not optimistic.  “I think we’ve missed an opportunity for some important experiments in terms of affordable broadband.  There’s an opportunity for public private partnerships, but the longstanding opposition from the telecommunications industry is still there. The question is whether that will influence the decisions that get made.”

Note: additional interesting information about Chicago’s broadband experience is available in a July 2009 study co-authored by Mossberger and Caroline Tolbert, from the University of Iowa 

Here also is a link to broadband grant information connected with the Recovery Act from NTIA: