Tuesday, February 15, 2011

The Risks of Broadband: Be Careful What You Ask For

There is an article in a Wisconsin paper indicating that the state is returning money to the Feds on the Broadband handout. They read the fine print. I went through the same some six years ago, but I had a loan, and liability was limited, the grants, the handouts, have strings that may go back to the creation.

As the article states:

State officials are returning $23 million to the federal government, saying there were too many strings attached to stimulus money that was supposed to be for expanding high-speed Internet service in schools, libraries and government agencies.

The money was to have boosted broadband connections in 380 Wisconsin communities, including 385 libraries and 82 schools. It also could have been used to improve police, fire department and hospital communications in rural areas.

But state taxpayers would have been on the hook for the entire $23 million if the state could not meet the grant's precise requirements, Mike Huebsch, secretary of the state Department of Administration, said in a memo to school and library associations.

"This is simply not an acceptable risk," Huebsch wrote.

 This was a wise decision. Many of the recipients have no assets so the remedy is limited. But those with assets can see them all go away, not to mention finding themselves under the Feds examination for a long time. Many people saw this as a pure gift, but it is not really that, and some of the "winners" may eventually become big losers. I recall many a conversation looking at the details and seeing that under the covers was some nasty stuff.

Wisconsin was very smart to take this position. Others may have more hubris than brains.