How Bad is the Administration Bungling BIP and BTOP?

I've been very critical of what I've seen so far, and now I think I've seen some numbers to back it up: Recently, an analysis of the awards made so far in Round 1 of the BIP/BTOP processes revealed that only 6.5% of the funding announced thus far was for wireless projects.

I ask you, how does this make sense given that:

1) Urban and suburban customers are cord-cutting at ever-accelerating rates, and everyone basically agrees the PSTN is obsolete;

2) DSL and other POTS-based technologies (Even FTTN) are getting slaughtered in the marketplace by competing technologies;

3) No serious argument can be made that sparsely populated rural areas are better suited to wireline technology. They are obviously less suited for it, and great candidates for wireless broadband.

4) Almost every dime of private investment that has been made in rural broadband over the years has been made in wireless technologies. No one will spend their own money to install fiber in rural areas, but many have opened their checkbooks to install 3G and WiMax.

If this is the way the administration is going to spend these dollars, I suppose we should be glad they're spending them so slowly. Not only are they wasting valuable tax dollars (though what's a few Billion between friends, honestly?), but subsidizing the ultimate losers will actually hurt rural economies. By allowing wireline operators to cherry-pick downtown areas, as small as they are, they make serving outlying ares with wireless technology even more expensive, as revenues per tower decline. A farm five miles outside Burlington, Colorado will never have a fiber connection, and will be left on the wrong side of the broadband divide for years, maybe forever.

It may not be financially wise for wireless broadband carriers to deploy in rural areas without any government support, but frankly it is a lot closer call than one might think. Having a legitimate shot at all of the customers in a community makes these projects nearly viable, even with all private investment (but not quite). However, if you take a huge percentage of those customers off the table because they're being served with ultra-subsidized, totally overpriced fiber networks, then we're locked into subsidizing these communities at a higher rate, with less coverage, for a long, long time.

We'd be better off burning the money than using it for this purpose. Not only is the government in a position to pick winners and losers in the marketplace, they seem determined to pick the losers. Slowing the winners down will stunt growth for at least a decade.