Telecommunications companies fore-see putting thousands of construction workers to work this year expanding the nation’s broadband infrastructure, fueled by the federal economic stimulus package.
Congress is considering stimulus legislation that would pump billions of dollars into extending high-speed Internet service to areas that lack broadband today.
The jobs would be created quickly and are expected to be short term. Millions of Americans — most of them in rural areas — could receive broadband services currently unavailable to them, according to Qwest Communications International Inc. estimates.
“I think the ultimate hope is to create jobs quickly, and this would do it,” said Chuck Ward, president of Qwest’s Colorado operations. “We think this is a sound investment for government spending.”
Denver-based Qwest (NYSE: Q) calculated that expanding its broadband network to unserved areas throughout its 14-state territory alone would generate thousands of jobs for contractors it would hire to dig trenches, lay cable and install other infrastructure.
The House of Representatives passed the stimulus bill Jan. 29, with $6 billion for telecommunications infrastructure. The Senate bill being debated as of Feb. 4 calls for $9 billion toward broadband.
Qwest hopes to bid for funds to build broadband coverage in sparsely populated parts of its states. Ward predicted the company could have contractors starting work within weeks of Qwest getting funds.
Qwest estimated it would cost $3 billion to get broadband of about 7 megabits per second to areas that don’t get broadband now. That would cost $460 million in Colorado alone, Qwest said.
That would make broadband available to about 2 million additional households in Qwest’s Rocky Mountain, Great Plains and Pacific Northwest local service area, Ward said. About 225,000 of those households are in Colorado, mostly far from the Front Range metro areas in towns such as Craig, Debeque, Carbondale and Fairplay.
The infrastructure costs of reaching remote homes never would be recovered by the monthly rates Qwest could charge, Ward said, which is why Qwest doesn’t serve them.
But federal money covering construction costs would make providing and maintaining broadband service economically viable, Ward said.
The stimulus money isn’t expected to be made available to companies that don’t sell Internet access to residential customers, such as Broomfield-based Level 3 Communications Inc. (NASDAQ: LVLT) and Englewood-based TW Telecom Inc. (NASDAQ: TWTC). But broadband expansion could help them indirectly by driving up demand for services and increasing the use of their networks, said John Ryan, Level 3’s assistant chief legal officer.
Technology experts worry that the United States is falling behind other industrialized nations in broadband deployment, which risks limiting the economy as high-speed Internet applications become more integral to businesses, and to key services such as hospitals and schools.
The federal stimulus spending would help, but it’s mainly meant to be a jobs program — not a technological fix for the country, said Phil Weiser, a University of Colorado-Boulder telecom law professor and co-chairman of a governor-appointed state innovation task force.
Backers of investing in national broadband infrastructure say it would fuel creation of thousands of new jobs in technology, telemedicine, professional services and other careers after the construction work is done.
The Information Technology and Innovation Foundation, based in Washington, D.C., estimates that $10 billion spent on broadband expansion would lead to 498,000 permanent jobs being preserved in existing and new businesses.
Congress isn’t talking about spending that much. The amount depends on whether the House or Senate version of the stimulus package is passed.
Qwest favors the Senate version, as does Colorado Gov. Bill Ritter and his technology advisers.
It puts one-third more money into broadband expansion, and it more directly involves states in deciding where it happens. It also lacks certain restrictions in the House version that would make Colorado telecom companies unlikely to receive money.
About half the money in the House legislation would be channeled through the U.S. Department of Agriculture’s existing rural telecommunications subsidy program. That program disqualifies Qwest because it serves urban areas such as Denver, Seattle, Phoenix and Minneapolis.
Another $1 billion provided in the House bill is earmarked specifically for wireless telecommunications, which Qwest doesn’t offer.
