It’s not just the big players that are trying to game the broadband stimulus system.

Tiny Pine Telephone Company of Broken Bow, Oklahoma was the only ACA member to secure a $9.5 million stimulus grant

One way to assure the winners and losers of broadband stimulus funding is who gets to write the application rules. The broadband stimulus program includes a scoring system, assigning points of merit to applicants who meet certain criteria. Provide proof of community support, earn a few points. Demonstrate a commitment to serving broadband to the unserved, earn some more points. Offer 21st century broadband speeds of 20Mbps or more, earn a lot more points.

The American Cable Association (ACA), a trade association for smaller independent cable companies, feels the point system has been weighted to favor phone company projects. Both cable and telephone company lobbyists offered their “suggestions” for criteria to be scored. The rural telephone company lobbies won.

Fierce Telecom notes a key criterion is whether the applicant borrowed funds under Title II of the 1936 Rural Electric Act, and it appears that telcos led that charge. Anyone that did borrow the funds under that program got five points so ACA asked the grant makers to reduce the emphasis of that criteria from five to one. Apparently, ACA not only didn’t get their wish, the grant makers upped the points on that issue from five to eight.

With federal funding programs, it’s not uncommon for the rules to be written in such a way that helps politically-connected applicants in the qualification process. ACA was simply outgunned during this round, and after the first round of projects to be funded was announced, only one rural phone company, Pine Telephone, was deemed a winner.

“The American taxpayer will be disappointed to learn that the program was changed to give greater priority to awarding particular segments of the telecommunications industry with broadband funding over equally or better-qualified applicants, including ACA members, that could provide the same broadband service at a lower cost,” ACA President and CEO Matthew Polka said.

Had the reverse been true, the press release from the rural telephone trade association would say the same thing — only the names would have changed.

Coming up…

Sticking it to Frontier Communications — “Just Say No” Applies to America’s ‘Rural Phone Company’ As Well