The 'Absolutely Devastating' Impact of Federal Stimulus Dollars Picking Winners and Losers in Northern Michigan

When President Obama visited Michigan’s Upper Peninsula earlier this month, his focus was on how his federal stimulus program would spread the Internet throughout the state and “put people back to work.” But Glenn Wilson of Rose City says the American Recovery and Reinvestment Act may have dealt a death blow to his telecommunication businesses. Wilson applied for money from the ARRA and was denied, while two of his competitors received a combined $113 million to boost their businesses.

“This is going to be just absolutely devastating,” said Wilson, who owns telecommunication businesses that are internet service providers to more than 20 school districts in nine counties. “The government is spending taxpayers’ dollars to destroy businesses.”

Wilson, who owns M-33 Access and Michigan Access, was concerned that the federal government would be picking “winners and losers” by handing out millions in federal dollars. He said that he knew his competitors would be applying for federal stimulus dollars, so he also applied for a loan. The professional fees and services to get his application done cost him $300,000, and his request was rejected. The Dec.10, 2010, rejection letter said that the federal government had already exhausted the stimulus money.

But Allband Communications received two grants from the ARRA for a combined $9.7 million, and Merit Network Inc. received two grants from the ARRA for $102.8 million. Both provide Internet service and are Wilson’s competitors.

Wilson said his business was doing well before the government injected millions into the region, and ultimately into his competition. Tim Scherer, director of institutional services at Kirtland Community College states that one of Wilson’s companies, M-33 Access, has saved the school $548,248 over five years.

Michael LaFaive, director of the Mackinac Center for Public Policy’s Morey Fiscal Policy, said the federal stimulus was “an intrusion into the marketplace.”

“It is wasteful, inefficient, and in this case, blatantly unfair,” LaFaive said.