Just when you thought the broadband stimulus funds had been allocated and it was time to move on to other things word comes from TMC’s Paula Bernier that many companies are rejecting the funds because the administration wants to ensure the investors do not directly benefit from the incoming funds. As Paula explains:
“I do know some customers that were initially awarded money have decided that they’re not going to take it, for a variety of reasons,” says Morgan. “A lot of it had to do with the way the terms were – just not very favorable in terms of … reporting structures and other things.”
Rules around dividends seem to be one key reason why some are thinking twice about taking broadband stimulus monies, he says. Apparently, the government wants to have some input into this process, at least in some cases.
“The concept is this: If I’m the government and I’m giving out money, I don’t want the shareholders of a company to benefit just because I’m passing them money, and there’s a chance that a company could then just take it and pass it on to the shareholders in terms of dividend,” says Morgan. “So there’s language in the contracts to try to prevent that from happening.”
Once again the White House seems more concerned with investors doing well than they are with the unemployed finding jobs. The theme is always the same, shareholders and bondholders are greedy and need to be more neighborly and share the wealth. During the GM bankruptcy, The Washington Post explained the situation quite clearly when they said The Obama administration should stop bullying the company’s bondholders
Here is an excerpt:
While the Obama administration has been playing hardball with bondholders, it has been more than happy to play nice with the United Auto Workers. How else to explain why a retiree health-care fund controlled by the UAW is slated to get a 39 percent equity stake in GM for its remaining $10 billion in claims while bondholders are being pressured to take a 10 percent stake for their $27 billion? It’s highly unlikely that the auto industry professionals at GM would have cut such a deal had the government not been standing over them — or providing the steady stream of taxpayer dollars needed to keep the factory doors open.
Having said this it is reasonable to assume that if you are going to receive taxpayer funds to provide broadband, that is where the money should go. The challenge here is the White House and the rest of government has not shown any regard for wasteful spending these last ten years. Similar to the Bush administration, spending within our means is not something we have done since Bill Clinton was in the White House.
But hold on, heaven forbid some of these companies pass stimulus dollars onto those greedy investors.
Remember, Obama has repeatedly told us we need to spread the wealth around – its good for everybody and moreover it is neighborly… Take a listen:
I for one am all for eliminating government waste and excess spending but it seems to me that there is a tremendous focus on ensuring the successful are penalized and I would suggest this massive effort be better directed at educating the unemployed so they can become more employable and the US can become more globally competitive.
Contrary to what the government says, they can’t do it all at once. For the sake of the American population – and especially those out of work, let’s focus more on creating jobs and making the unemployed employable and worry about punishing the wealthy for when unemployment gets back to the average of the earlier part of this decade which was around 5%.