Middle-mile investment crucial to rural broadband, entrepreneur tells Congress

"The current middle-mile link is typically an expensive, low-capacity facility that effectively slows data speeds between whwat the local cable network can supply and what is actually delivered or received from the Internet backbone," he said in his testimony. "The data chokepoint has persisted because the owners of these middle-mile facilities have failed to invest in upgrades to coincide with the last-mile investment made by ACA members. End-user download speeds in rural areas would be much faster if local broadband providers had access to affordable, high-speed middle-mile facilities."

Gleason listed a number of barriers that keep small providers from being able to apply for stimulus funds. For example, his company has had to spend an additional $30,000 in order to prove its current service areas, even if they don't apply for the program. Companies have to show where they provide service if another firm applies for funds to build out that same area, to avoid overbuilding in regions that are already served.

He also said the government program is discouraging private investment in rural areas, pointing out that private expansion and merger and acquisition activity have slowed because of the uncertainly of private enterprises having to compete with government-funded entities.

"While broadband stimulus can be very helpful to encourage broadband deployment in areas that are truly unserved or underserved, it should not be at the risk of losing private capital investment, which will ultimately achieve more deployment that any stimulus program," he said.

The first round of awards will be announced by the Commerce and Agriculture Departments in late November or early December, officials said today.