Broadband Agencies Hear Complaints From All Sides

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Two U.S. agencies tasked with distributing US$7.2 billion in broadband deployment money over the next year heard complaints from one U.S. senator Tuesday that they were moving too fast.

A second senator, at a hearing before the Senate Commerce, Science and Transportation Committee, complained that the funds weren't being distributed fast enough.

Another group of senators complained that the U.S. Rural Utilities Service (RUS), one of the two agencies, had eliminated many unserved rural areas from eligibility. Then again, other senators noted that the RUS, in the past, has funded broadband projects where service already existed

The conflicting priorities voiced at Tuesday's hearing demonstrated the pressure the RUS and the National Telecommunications and Information Administration (NTIA) are under as they attempt to distribute a first round of $4 billion in broadband grants and loans by the end of the year.

An inspector general's report from March found that the RUS, since September 2005, loaned about $913 million to 37 applicants for broadband deployment under a separate program, said Senator Claire McCaskill, a Missouri Democrat. However, 34 of those applications, for $873 million, were for broadband deployment in areas where service already existed, she said.

"I just don't want federal money competing with people who've investments without the help of federal money," McCaskill said. "I don't think it's fair to those companies."

RUS administrator Jonathan Adelstein said his agency was working to find the right definition for geographic areas eligible for the new funding, approved in the American Recovery and Reinvestment Act, a huge economic stimulus package. But before McCaskill spoke, three other senators complained that the RUS, in defining "remote" areas eligible for a targeted grant program as those that are 50 miles outside cities, was leaving out large areas now unserved by broadband.

There are large sections of Arkansas that aren't covered by broadband, but only a couple of areas that would be eligible for the remote grants, said Senator Mark Pryor, an Arkansas Democrat.

Adelstein said the RUS is trying to rework the definition of remote areas, for which $400 million is set aside for last-mile projects.

"It turns out maybe we went too far, and a lot of West Virginia wasn't counted and a lot of Arkansas wasn't counted," Adelstein said. "Our goal is, I think, shared, which is that those funds reach the hardest-to-reach areas."

In addition to concerns from senators, the U.S. Government Accountability Office (GAO) issued a report Tuesday saying the two agencies face several challenges in meeting congressional deadlines for distributing the $7.2 billion.

Both agencies will have "far fewer staff" to monitor the new broadband projects than they have for existing programs, said Mark Goldstein, the GAO's director of physical infrastructure issues. "The upcoming deadline for awarding funds may pose risks to the thoroughness of the application evaluation process," he said.

Some senators at the hearing raised questions about how the money would be spent and why many large broadband providers had opted out of the NTIA and RUS programs.

Much of the money will be committed to projects before nationwide broadband mapping efforts are completed, which raises concerns that the money won't be spent wisely, said Kay Bailey Hutchison.

"My concern is that we have the mapping ... to see where the real priorities in America are," Hutchison said. "I understand this was a stimulus package ... but I also am concerned that we're not going to be using the right priorities for the taxpayer dollars."

As for the time frame, Congress required some of the funds to go out before the mapping was completed. NTIA is relying on information from several sources, including the grant applicants, state governments and broadband providers, to determine where the money is needed, said Larry Strickling, assistant secretary of commerce for communications and information, and head of the NTIA.

"Our goal is that the money is spent wisely," Strickling said.

On the other hand, Senator George LeMieux, a Florida Republican, complained that the RUS and NTIA had not yet awarded any broadband deployment grants, even though the economic stimulus package was approved by Congress in February.

"I'm all for doing it the correct way," LeMieux said. "We're eight months down the road, and, except for the mapping dollars, we haven't put one dollar on the street yet. We've got people who are hurting and need jobs. That was the purpose of the stimulus appropriation."

Strickling and Adelstein both said the broadband stimulus money created new programs, and they need to review applications thoroughly before giving out grants and loans. "I will not fund a bad application," Strickling said. "Five years from now, after the federal money is long gone, these projects need to continue to be operating and be out there serving their community."

LeMieux suggested that NTIA start issuing grants to good applications immediately, but Strickling said NTIA has to review all the applications before making any decisions. The two agencies received 2,200 applications seeking $28 billion in funding in the first, $4 billion funding round.

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