Monday, November 16, 2009

Concerns With Broadband Grant Program

In Monday's CongressDaily AM edition, reporter David Hatch outlines the problems with the Obama administration's grant program to increase broadband access and interest as part of the $787 billion economic stimulus plan enacted in February. Critics say extraneous fees and red tape are indicative of a larger set of flaws with the broadband stimulus program, which has drawn close scrutiny from Congress. The initiative is run by the Agriculture Department's Rural Utilities Service and Commerce's National Telecommunications and Information Administration.

Problems are considered most acute at the RUS, which sources said was included at the insistence of Sen. Tom Harkin, D-Iowa, then-chairman of the Senate Agriculture Committee who wanted to ensure the panel would have jurisdiction. The RUS, which for the past nine years has overseen an annual portfolio of broadband loans averaging nearly $700 million, is now doling out broadband grants and loans totaling $2.5 billion, raising questions about whether it is overwhelmed. A top aide to RUS Administrator Jonathan Adelstein insisted the agency is not in over its head, emphasizing its 60 years of experience in handling applications for federal assistance. Nevertheless, sources said political vultures already are circling, just waiting for the agencies to slip up.

The broadband funds are supposed to help extend high-speed Internet connectivity to areas that lack service, competition or the latest technology. Working under a rushed schedule, rules were crafted that critics view as unnecessarily complex, forcing applicants to first apply to the RUS, even if they'd rather deal only with the NTIA. After being inundated with 2,200 applications seeking $28 billion -- seven times the $4 billion available in the first round -- both agencies fell a month behind in announcing recipients and plan to begin the process in mid-December. Among the harshest critics are Democrats, including Senate Commerce Chairman John (Jay) Rockefeller, who are angry the Agriculture agency specified that only "remote" areas -- defined as beyond 50 miles from a city or town with a population of at least 20,000 -- are eligible for its most generous grants. To read more click here. (Subscription required)