Race is on for Internet stimulus stimulus

Uncle Sam has 2,200 requests for $28 billion in aid but just $4 billion on hand.

WASHINGTON (AP) — The federal government will soon start handing out the first $4 billion from a pot of stimulus funds intended to spread high-speed Internet connections to more rural communities, poor neighborhoods and other pockets of the country clamoring for better access. The challenge is that the government has received $28 billion in requests.

So the reviewers at the Commerce and Agriculture Departments who will award the broadband money must make hard choices. The 2,200 applications each envision something different — more fiber-optic lines, for example, or computer labs or municipal wireless networks. But they all promise that their proposals will create jobs and bring new economic opportunities.

What follows are snapshots of projects representing a cross section of the broadband stimulus hopefuls. It’s too soon to know which plans will win federal grants or loans, either in this round of funding or in the next, as the total broadband stimulus expands to $7.2 billion. Those that do get picked may not get the full amount they are seeking.

But perhaps one — or more — of these projects has a chance.

For the Coeur d’Alene Indian tribe in the Idaho panhandle, the stimulus money could mean a lifeline to the outside world.

The tribe is asking for $12.2 million for a ring of fiber-optic lines that could connect up to 3,500 homes on one side of its rural reservation, which is about half the size of Rhode Island.

Right now, the tribe’s landline broadband options are limited. The local cable company has pulled out of the market. And the phone company, Verizon Communications Inc., offers digital subscriber line (DSL) service to just a small slice of the reservation.

Although the tribe launched its own wireless network in 2005 with the help of Agriculture Department funding, that network reaches less than half the reservation and slows to a crawl whenever too many people get online at once.

Valerie Fast Horse, the tribe’s information technology director, says stimulus money would let the Coeur d’Alene Indians build a network that is “more stable and more reliable” and could deliver faster connections at lower prices.

Clearwire Corp., a company pioneering the use of a next-generation wireless technology known as WiMax, is upfront about the fact that some markets don’t make sense for telecom providers that need to show a profit.

So Clearwire is asking for $19.4 million to build a high-speed wireless network in a handful of poor Detroit neighborhoods that it otherwise might not serve anytime soon.

Although those neighborhoods have more than 800,000 people, high unemployment and poverty levels make for a tough business case. But federal dollars would change the equation, says John Bunce, president of the Clearwire unit applying for stimulus funding.

And with that seed money as a starting point, the company pledges to spend its own capital to expand the wireless network across metropolitan Detroit, including more lucrative suburban markets.

The company offers a range of wireless plans, including a $45-a-month package that delivers speeds averaging 3 megabits to 6 megabits per second. On the low end, the company offers a basic 1-megabit connection for $25 a month.

In Appalachia, a nonprofit Internet provider called the Mountain Area Information Network (MAIN) wants help expanding a service started back in the dial-up Internet days so that people in the mountains of North Carolina wouldn’t have to make a long-distance phone call to get online.

MAIN is asking for $2.5 million to extend its wireless network in Asheville, N.C., and several remote mountain communities. A sister non-profit is asking for $38.8 million to install fiber lines that would connect that network to the Internet.

Launched in 1996, MAIN today has about 1,200 dial-up subscribers, 400 wireless subscribers and several hundred additional customers who pay to access a Wi-Fi connection for a few hours or a few days at a time. Stimulus money would enable the non-profit to spread its wireless “cloud” to 11,000 additional homes in Asheville public housing projects and surrounding low-income neighborhoods.

Wally Bowen, MAIN’s executive director, says the service would bring inexpensive mobile Internet connections — with speeds of 3 megabits per second for $30 a month — to a transient, low-income community that includes struggling artists and young entrepreneurs. Many of those people, he says, cannot sign up for the typical one-year or two-year contracts required to get the cheapest Internet rates from the big phone companies.