Just before Labor Day, I attended a groundbreaking (an all too infrequent event these days) for a public/private partnership in the D.C. metropolitan area. During the ceremony, an up-and-coming Democratic member of the House of Representatives praised the project because it would create jobs with private sector funding. "The federal government has invested a lot to stimulate the economy," the Representative said. "Now it’s time for the private sector to step up to the plate."

This message sounded like it might have come out of a new Administration playbook – and, I started thinking, if it didn’t, it should have. The government has spent billions of taxpayer dollars trying to revive the economy; now it should be up to the private sector to take it from here.

So this is my prediction for what comes next for federal broadband funding: Nothing. The federal government has allocated an unprecedented amount of money – almost $7.2 billion – and now that BTOP and BIP are coming to a close, the private sector will bear the burden of building out broadband infrastructure, particularly to rural areas. In fact, there are signs that is already happening. According to comScore, regional ISPs are driving broadband further into rural markets, and rural markets have experienced double-digit growth in the past year.

However, many large corporations across the country are reportedly sitting on cash that they are afraid to spend because of uncertain economic conditions. Something has to break this spending logjam, but I don’t see it being more federal money – at least not for broadband and at least not in the next few years.

In a speech in Cincinnati earlier in the month, President Obama outlined a number of tax incentives designed to spur businesses to start spending again. Among them are making the R&D tax credit larger and permanent and allowing companies to deduct the full value of equipment purchases through 2011. In this way, the Administration hopes to pass the baton back to the private sector to create jobs.

The President’s proposal also includes $50 billion in infrastructure spending. But, although he mentioned broadband when listing the infrastructure accomplishments of the first Recovery Act, the President did not include broadband in his six-year infrastructure plan. That is comprised solely of transportation projects.

Whether the proposal can get the needed political traction to fund any projects and/or enact any tax incentives is debatable. Nevertheless, I wouldn’t expect to see further large-scale federal funding of broadband, at least not through NTIA. The Rural Utilities Service (RUS) in the Department of Agriculture had been administering small amounts of broadband funding for years, and I would expect this to continue. However, Rounds One and Two of BTOP were controversial enough, and it was a bold step for the Administration even to include broadband in the Recovery Act to the extent they did.

For the foreseeable future, NTIA should be busy enough monitoring the funds it has already disbursed to ensure that government dollars are spent wisely. On the positive side, one of BTOP’s purposes was to select projects that could serve as good models for broadband build-out, so NTIA and the industry will be watching to see what happens in this area as well.

Toward this end, a number of solid infrastructure companies -- Motorola (public safety equipment), Infinera (digital optical networking), Calix (fiber transmission equipment), Draka Communications (fiber), and Adtran among others -- have either partnered with BTOP/BIP awardees or have now been selected by them as vendors. Many of the resulting projects should prove valuable not only for their own sakes but also as demonstrations of what can be accomplished with what new technology and at what cost. I would expect some of the best models to be held up as examples for others to follow – but probably on their own dime.

Of course the uncertainty of the broadband regulatory environment – with controversies over net neutrality, the FCC Chairman’s "third way" proposal, the Google/Verizon agreement, and what, if any, government entity should have authority to regulate the Internet – could stymie companies’ willingness to invest in broadband build-out. I’ll treat that topic in a future column, but for now I’ll predict that the Administration will not let onerous broadband regulation reverse the momentum it tried to create with BTOP/BIP. To do otherwise would run counter to an Administration message that’s beginning to clarify: It’s time for the private sector to start spending again.

Note: The views expressed in Rimo's Beltway Bulletin are those of the author and may not reflect the views of Infinera Corporation.