I’m going to go out on a limb here and predict that the $7 billion-plus of government money dedicated to improving broadband in the U.S. will NOT radically improve broadband penetration rates in the country.

Much of the disbursement of funds will be dependent on determining what areas are “unserved” or “underserved.” There’s plenty of argument going on over the exact definition of that right now. But for expediency, let’s assume unserved means areas where consumers are unable to get any broadband connection greater than 500 kbps and underserved means those unable to get anything beyond 3 Mbps. Generous with my latter definition? Perhaps, but I’m thinking future applications. Let’s leave actual throughput questions for later, as well.

In technology terms that’s effectively no wireline broadband and perhaps only low-tier wireless. Who doesn’t have wireline broadband? Likely it’s those living in the most rural markets. But if we take the admittedly unscientific surveys from those representing rural service providers, it soon becomes clear that rural providers are doing a decent job of getting broadband out to their largely rural constituents. In the National Telecommunications Cooperative Association annual survey, 83% of customers served by members could get at 768 kbp-1.5 Mbps service. That puts then in “underserved” but clearly not “unserved.”

Compare that number to Verizon, which has publicly stated that about 20% of its local wireline territory can’t get broadband and Qwest, says it’s at 15% unserved. No one on the cable side is talking but having visited many rural telcos over the years, I can say that cable is often non-existent or limited to the cluster of homes that serve as the population base for small towns.

The rub here is that because these funds are being filtered through both NTIA and RUS the assumption is that most will go to smaller providers, not Verizon, AT&T and Qwest, which happen to cover about 90% of U.S. households. So where does that leave those in the 15%-20% of customers whose local provider is one of those three but still can’t get a broadband connection?