If you think the Obama administration’s stimulus package is about digging ditches, you’d be right — at least when it comes to funding broadband efforts in rural areas.

Take for instance the Mandan, Hidatsa & Arikara Nation reservations in northwest North Dakota, where the Reservation Telephone Cooperative (ResTel) is putting in a 50-Mbps connection to the Elbowwoods Memorial health care center. That connection, made possible by fiber optic cable and broadband stimulus funds, will enable the center to connect patients to doctors and doctors to specialists.

“With this technology, we will have rapid analysis; our tribal members will have access to state-of-the-art medical care and services; an x-ray can be taken and read by a radiologist at a facility miles away,” says Tex Hall, the nation’s chairman. “Our providers will talk to physicians at clinics like Mayo in Rochester, Minnesota, about critical-care patients; our dialysis patients will have immediate access to nephrologists 200 miles away and we will be able to monitor a diabetic patient from their home. Importantly this will be state of the art, no slow upgrades, no fuzzy images; we will have real-time second-by-second network monitoring.”

And it’s not just the hospital that’s getting fiber optic net connections on North Dakota’s reservations. ResTel got a mix of grants and loans from the government totaling $21.9 million — which had to be matched by the cooperative — to lay fiber for businesses, individuals and even cell phone towers.

The stimulus package earmarked $7.2 billion in grants and loans for projects to bring broadband to rural and urban areas. The FCC says the projects funded so far will bring broadband to 2.2 million Americans. That’s a good start, the FCC says, but more than 28 percent of rural Americans — some 18 million people — still can’t order fixed-line internet connections faster than 3 Mbps down, according to the FCC’s June 2011 report.

And unlike some of the criticism other stimulus priorities got, rural broadband initiatives not only put people to work but also do things that would not been done and have an enduring payoff, a 21st century version of the federal government’s programs to bring electricity and telephones to all citizens.

ReservationTel’s coverage area stretches 5,700 square miles, over a number of reservations and outside of them. And it’s working to bring fiber to all its customers, including ones who live a mile from their neighbors. In about year four of a decade-long project, the co-op is laying about 1,000 miles of fiber a year, and currently has fiber available to more than 3,000 homes.

“We believe for us to survive we have to do fiber-to-the-home,” ReservationTel operations manager Brooks Goodall told Wired.com. “If not, we won’t be here in the future.”

And while rural America might be losing population generally, that’s not the case with New Town, North Dakota, which sits atop the Bakken oil shale formation, a booming new oil field near New Town. That oil rush, made possible by new oil-extraction technology, has brought in thousands of new residents and big businesses, all hungry for fast internet connections and even new phone lines — a rarity in the telecom world. New Town alone has 500 miles of fiber connections.

ResTel, with 9,000 customers, doesn’t face competition from big telcos such as Verizon and AT&T, which don’t come anywhere near remote areas like the reservation when it comes to wireline broadband.

“If they did come in, they would just want our big towns — just our towns,” Goodall said. “We serve everybody. We don’t just pick which ones we serve.” (In fact, ResTel provides the lines that connect Verizon and AT&T cellular towers on the reservations to the internet.)

Goodall says the net connections are about more than just letting people log onto Facebook or play fantasy baseball.

“You have people running a trucking company or a veterinarian or doing remote medical transcription — so without fiber they can’t work from home,” Goodall says. “People have bull sales live on the internet, but without that fiber connection you can’t do that.”

ResTel, founding in 1951, has been providing internet access through phone-line-based DSL, but says speeds on DSL top out at about 6 Mbps, while the new fiber is offered at 10- to 20- Mbps downloads — though that could easily go to 100 Mbps given the huge capacity of fiber networks.

That capacity for future growth is why most of the broadband stimulus grants to date have gone to fiber-based projects, according to Calix, a broadband equipment and services company that’s been heavily involved in stimulus projects. Some $7.2 billion in broadband funds are available through the American Recovery and Reinvestment Act. The Department of Agriculture says it has funded 320 broadband infrastructure projects, with 2.3 billion in grants and 1.2 billion in loans. Those funds should bring broadband to 7 million Americans, the agency says.

The other half of the funds were administered by the Commerce Department, which granted more than $4 billion to 233 pro-broadband projects, covering every state and territory.

Projects funded include getting faster internet connections in Appalachia, and modernizing parts of southern Louisiana that were hit hard by Hurricane Rita — the little-remembered successor to Hurricane Katrina. Cameron Communications won $33 million in loans and grants to lay 216 miles of fiber to connect homes in Moss Bluff, Oakdale, and Vinton, Louisiana.

A worker installing Calix equipment in a fiber node.

The FCC stresses, however, that even with private investments from big cable companies and the stimulus money, the rural “broadband gap” would still need several times the stimulus funds to be closed. That, however, is unlikely in the current political climate, where deficit spending is politically charged and the talk of the day is spending cuts, not infrastructure investment.

Still the funds have been a boon to at least one company.

Calix has won contracts for work on 55 stimulus-funded projects, which have collectively gotten more than $1 billion in federal funding. Calix describes itself as the equipment that sits between users’ devices and the cloud. Specifically, it has hardware and software that power “nodes” — the boxes you sometime see on street corners where traffic from anywhere from 32 to 64 fiber users converges. That traffic is then sent on to a central facility, which Calix can also power, before being sent onto the internet’s fast lanes.

Calix, a Petaluma, California-based company, issued an IPO last year on the New York Stock Exchange and is growing its business of providing access services and equipment to ISPs, even as it competes with networking giants such as Alcatel-Lucent. The company helps ISPs offer services ranging from VOIP to cable in networks that can be a mix of fiber and traditional copper connections.

Though not a household name, Calix says it is the leader in fiber deployment with more fiber nodes deployed than any other company, including Verizon, which heavily invested in fiber optics with its FIOS service for U.S. consumers. Just in the efforts on broadband stimulus alone, Calix says it’s helped bring fiber optic connectivity to some 2.3 million homes — a good start on the national broadband plan’s goal of having 100 million U.S. houses having 100-Mbps net connections by 2020.

“All content is moving to the cloud, and there are broadband devices everywhere,” said Calix’s chief marketing officer Geoff Burke. “We are the people that sit between those devices and clouds. That puts us in very powerful position.”

Calix’s CEO Carl Russo says broadband conditions in the U.S. aren’t stellar when compared to the rest of the world: Depending on who is counting and how, the U.S. is somewhere near 20th in the world.

But things are getting better, in part because of the $7.2 billion in stimulus money, low interest rates and growing competition.

The stimulus funds, while nice, aren’t huge — in fact, it’s less than the U.S. spends on the Afghanistan war every month, and is unlikely to get the country to the goal proposed in the National Broadband plan: 100 million homes with 100-Mbps connections by 2020.

“We’ve worked on 55 projects that run past 2.3 million homes with connections capable of 100 Mbps,” Russo said. “So we have about 50-fold to go.”

But it may be that the private sector, seeing the benefits of fiber and low interest rates, may take up the slack.

“The biggest friend to fiber may be that LTE and DOCSIS are coming on so strong,” Russo said, referring to the speedy 4G wireless networking protocol and the cable internet protocol that’s increased cable internet speeds more than than many suspected it could — giving fiber optic and DSL companies strong competition.

About half of Verizon’s territory now has access to FIOS and AT&T is beefing up it’s copper-based network with fiber, while other ISPS such as CenturlyLink and Windstream are also investing in fiber.

Fiber is an inevitablity, Russo says, even if it’s not getting much cheaper to put into the ground or onto light poles — since there’s no way to get rid of the need for manpower.

But commerce, culture and information wants to be digital, the company says.

“Over the long haul, there’s no question what’s going to happen,” Russo said.

The only question is how long will it take for the United States to become one nation connected by fiber.

Top photo: Installing fiber optic cables still requires a lot of manual labor, as you can see in this photo of Reservation Telephone Cooperative employees laying cable. (Courtesy ResTel)

Middle photo: A worker installing a fiber node box with Calix equipment. Such boxes combine and collate traffic as it passes to and from homes to the internet.