21 Aug 2010 - A division of Carlsbad satellite equipment maker ViaSat was among firms that won economic stimulus funds this week from the Obama administration for projects to improve high-speed Internet access nationwide — marking the first time U.S. satellite companies have received stimulus money.

WildBlue Communications, which ViaSat acquired in February, received $19.5 million to subsidize satellite broadband service to rural communities in the West and Midwest.

About 110,000 households and 4,900 businesses without land-line broadband stand to benefit.

In addition, DISH TV provider EchoStar of Colorado got $14 million aimed at the eastern United States. EchoStar offers Internet service to its customers through WildBlue. About 42,500 households and 2,000 businesses could be eligible. “We won one award directly and one award indirectly,” said Tom Moore, a senior vice president of ViaSat. “And we’re pretty excited about that.”

Besides WildBlue and EchoStar, Hughes Network Systems — WildBlue’s chief competitor — received $58.7 million.

The industry once had high hopes for tapping broadband stimulus dollars. Early on, ViaSat and EchoStar applied for more than $480 million in stimulus grants and loans.

But to date, the $7 billion in broadband stimulus funds included in last year’s American Recovery & Reinvestment Act have been primarily spent on infrastructure projects that create jobs on the ground. Only $100 million was set aside for satellite Internet, which has a reputation of being relatively slow and expensive.

ViaSat, however, has made a big bet on changing that perception. Early next year, the company plans to launch its first satellite, ViaSat 1, which it says can provide 10 times faster speeds at roughly the same costs as existing satellite Internet services.

Hughes also is building a next-generation Internet satellite slated to launch in 2012.

In all, the Obama administration handed out $1.8 billion in stimulus funds Wednesday for 94 broadband projects in 37 states. To qualify for satellite stimulus funds, households and businesses must have no other broadband alternative, Moore said.

The money will be used to subsidize installation and equipment costs and to reduce monthly subscription fees.

According to a recent report from the Federal Communications Commission, an estimated 14 million to 24 million U.S. households and businesses don’t have access to high-speed Internet from cable or DSL.

“These are funds targeted for the unserved,” said Moore of ViaSat. “This is a very capital-efficient way to reach a large number of people. And I think when people realize how good satellite can be when done properly with the right technology — and ViaSat 1 is a big part of that — they’ll see this is an important part of the policy of how to reach the last 20 or 25 percent” of those lacking high-speed Internet access.

Moore also hopes the satellite stimulus program becomes a template as lawmakers ponder whether to expand use of the Universal Service Fund, which is a tax on telephone service.

The funds are used to make sure rural Americans have affordable phone service. Some federal officials have proposed expanding the use of the Universal Service Fund to include broadband Internet access. “The Universal Service Fund is billions of dollars every year,” Moore said.

“What we’re most encouraged about is that this (stimulus grant) be used in some way as a pilot program for a much bigger effort — which we’re just starting to debate in Washington — and that is universal service reform.”Satellite Internet Servicesource: www.signonsandiego.com