White House Says Broadband Will Boost Jobs

Brian Shactman,|CNBC Reporter

The next phase of the Recovery Act: Bringing broadband to the people.

Stimulus Scorecard

On Thursday, the government officially kicked off the $7.2 billion broadband component of the Recovery Act with $182 million worth of investments, spread over 18 projects in 17 states. The dollar amount will be matched by another $46 million of private capital.

This initial announcement will begin a stretch of 75 days during which about $2 billion will be awarded.

"These lay a new foundation for economic growth across the country," Jared Bernstein, chief economic adviser to the vice president, said. "It's worth noting that so many of these new programs (in the Recovery Act) are dependent on having sufficient broadband access."

The goal is to make the United States more connected. Right now, broadband connectivity is concentrated in urban and suburban localities. The goal through the Recovery Act is to level the geographic playing field, and bring broadband to the rest of the nation.

There are four distinct types of awards, ranging from connecting rural communities to each other and to their public offices, to doing projects to stimulate demand for broadband.

"The Recovery Act is designed not only to offset some pain but also to lay the groundwork for some of the president's top priorities," Bernstein said.

Stimulus Scorecard: Broad-Reaching Broadband

But the top priority is creating jobs. And although he would not put a job-growth number for this particular part of the Recovery Act, Bernstein did not equivocate regarding the overall impact.

"We are confident that the number of jobs will be in the tens of thousands, but we can't be more precise than that," he said. "We get some real bang for the buck for employment with indirect jobs."

But the administration is coming under increased scrutiny on the jobs front. During a closed-door briefing late Wednesday with Bernstein, Press Secretary Robert Gibbs and Senior Advisor Ed DeSeve, all three were pushed on one fundamental question: if the Recovery Act is so promising when it comes to job creation, then why is the president looking for another federal-spending push to stimulate job growth?

"I don't think you've heard anyone say we've turned the corner," Gibbs said. "There was a $2 trillion hole to fill (in our economy), and no one said the $787 billion would fill it.

"(The Recovery Act) is working well, and we will let it play out."

Another critique of the Recovery Act thus far has been the pace of spending. With the broadband effort, the legislation was enacted nearly a year ago, and Thursday’s broadband announcement only involved about $200 million of a total pool of more than $7 billion.

“We have a terrific inventory of projects, but we want to make sure the projects we're selecting will be there five years from now,” said Lawrence E. Strickling of the Department of Commerce, which is working with the Department of Agriculture to disburse the broadband money across the country.

The government maintains: the money will be spent … and the jobs will be created.

“We still think we are on track to save or create 3.5 million jobs by the time (the Recovery Act) winds down at the end of next year,” Bernstein said.

But he wouldn’t say whether that would be enough to bring unemployment down to more comfortable levels.

And that’s why the talk of a new jobs package has emerged. It takes job growth of more than 100,000 a month just to keep pace with the population. It takes a whole lot more to get 10 percent unemployment down 50 percent to where it was just two years ago.

-- Molly Mazilu contributed to this report