How the broadband stimulus so far fails innovation

The rules surrounding the release of $4 billion in federal funds aimed at providing better broadband and creating jobs announced last week have so far disappointed applicants hoping to deliver advanced broadband services such as fiber to the home. Instead, the rules associated with the first release of grant funds appear to be targeted at getting connectivity to rural areas – ignoring places where customers can get the minimum standard of broadband, which the government has set at 768 kbps.

This means projects like a downtown fiber optic pipe in tiny Canby, Ore., aren’t going to get money, since that area of Canby already has service that meets the definition of broadband...