The biggest companies, including Comcast and AT&T Inc., probably wont take part in the plan unless lawmakers provide more money for installation of costly broadband lines and drop speed and access requirements, said Robert Atkinson of the Information Technology & Innovation Foundation.

“As the bill is currently structured, the companies that provide 90 to 95 percent of broadband wont be applying for these grants,” said Atkinson, who leads the Washington-based think tank. “Its just not a good trade-off for them.”

The House of Representatives approved $6 billion in funding for the Internet buildout, while the current version of the Senate bill allocates $9 billion. Even smaller providers, such as Roseville, California-based SureWest Communications, say that wont cover the cost of building to remote areas or ensure that enough customers sign up to justify the expansion.

“The stimulus package doesnt make any sense for us,” said Steven Oldham, chief executive officer of SureWest, which provides service to customers in Northern California and Kansas City, Missouri. “If there was an economic model to build out to these homes, we wouldve already been there.”

Rural users have long suffered sluggish Internet dial-up service because there is no financial incentive for cable companies to bring high-speed lines to their homes. President Obama, when he was running for office, made connecting these areas a priority.

“Its unacceptable that the United States ranks 15th in the world in broadband adoption,” Obama said in a speech in December. “Here in the country that invented the Internet, every child should have a chance to get online.”

Mediacoms Spending

Representatives at Comcast, AT&T and Verizon Communications Inc. declined to comment.

Reaching that goal will be expensive. Mediacom Communications Corp, the eighth-largest cable provider in the U.S., estimates it spends $30,000 to build one mile (1.6 kilometers) of fiber-optic cable. The more homes it signs up on that mile, the faster the return.

The enterprise value for Comcast to connect one household to its line is about $1,200, according to Craig Moffett, an analyst at Sanford C. Bernstein & Co. in New York. Based on those figures, with just one household on a mile of cable, a company would have to wait decades before it breaks even.

“Weve built those lines with no government subsidies,” said Rocco Commisso, Mediacoms CEO. “Now our competitors are going to get free money for the same build-out and its just not fair.”

Under the stimulus bill passed by the House of Representatives last week, $6 billion was dedicated to broadband build-out. Cable operators that accept grants may have to share the networks they build with competitors and meet speed requirements.

“If I make the investment, why should I have to share?” said Commisso. “Government subsidies dont allow us to compete on an even playing field.”

General Communications Inc., a cable provider based in Anchorage, Alaska, likes the idea of federal aid, though is hesitant about the speed requirements. The House plan calls for companies that get grants to build broadband networks with speeds of at least 45 megabits per second, faster than most homes can get now. The Senate version includes speeds of up to 100 megabits.

Faster Speeds

Any speed faster than 5 megabits is “more than most people need,” said Ronald Duncan, General Communications CEO. The demand may “put the capital case out of reach for us and instead of getting some access, youd get nothing.”

General Communications currently offers households speeds of as much as 10 megabits per second.

The short-term aspect of the plan also concerns some providers.

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