Networking Firms Maneuver for Stimulus Windfall

The race is on for networking vendors to get their share of the $7 billion in broadband grants being offered through the Obama administration's massive economic stimulus bill.

At its core, the program will involve billions in new networking gear to help improve the state of broadband in the United States, and networking vendors like Alcatel-Lucent (NYSE: ALU) and Juniper Networks (NASDAQ: JNPR) are planning to cash in, helping their carrier customers across the United States figure out how to get a piece of the stimulus pie.

That, in turn, is likely to lead to greater sales of their own offerings, with the final outcome potentially becoming a bonanza for networking vendors. For one thing, the volume of stimulus grant applications could well exceed the dollars allocated by the government -- and that could lead to sales even beyond the $7 billion allocated in the stimulus package.

"Our customers are starting to wonder what does the broadband stimulus mean to them and whether they should take advantage of the dollars," Rich Wonders, an executive vice president at Alcatel-Lucent, told InternetNews.com. "The government has made it clear that although this is about delivering broadband to consumers in rural market, there is also a set of target institutions and audiences that they are very interested in being part of the program -- healthcare, schools and libraries are all on the targeted list."
Wonders added that Alcatel-Lucent realized that many of its smaller customers were not equipped to navigate their way through a federal program like the broadband stimulus and craft a federal grant proposal. To that end, Alcatel-Lucent is helping its customers to draft their funding applications.

It's also retained the services of Nancy Victory, the former head of the U.S. National Telecommunications and Information Administration (NTIA), to help with its stimulus-related efforts. The NTIA is tasked with figuring out the rules by which the broadband stimulus grants will be awarded. The agency has also launched its own informational Web site to help promote its efforts.

At Alcatel-Lucent, Wonders said the company is trying to engage its own employees as well.

"We employ over 20,000 people in the U.S.," Wonders said. "So our employees also live and work in cities -- some have broadband, some don't -- and as taxpayers and citizens, we want to make sure they have a voice.