Broadband Stimulus: Commercial Entities "Need Not Apply"

Some observers say large telcos are "dragging their feet" about applying for "broadband stimulus" funds. That's not the best way to describe it. By RUS rules, large telcos are ineligible to apply.

By NTIA rules, which are targeted to non-profit organizations, most commercial entities likewise are ineligible to apply, at least not as "prime" contractors, unless they get a waiver that says the proposed projects are in the public interest. That might or might not be difficult.

Putting aside other concerns about strings attached to funds received under either the RUS or NTIA programs, the language of the statute, while not forbidding grants to commercial applications, requires a waiver.

Ultimately, commercial entities may find they do best by partnering with a submitting organization that is a government, medical, educational or other non-profit entity.

The single statutory exception is for Small Business Administration firms that already have qualified for "minority set aside" treatment.

Even if service provider concerns about wider business model impact are addressed by the final rules, which remain fluid, the fact remains: NTIA rules heavily favor prime contractors that are non-profits. It remains likewise unclear the degree to which these rules also will apply to RUS funds.