Republicans question broadband stimulus program

Two government agencies handing out more than US$7 billion for broadband deployment should reexamine grants to projects that overlap existing broadband service, and they should return any funds that go unspent, several Republican members of the U.S. House of Representatives said Thursday.

The U.S. National Telecommunications and Information Administration (NTIA) and the U.S. Rural Utilities Service (RUS) should return to the federal treasury any broadband deployment money that is eventually unspent or withdrawn by the agencies, Republican members of the House Energy and Commerce Committee's communications subcommittee said during a hearing. Administrators of those agencies now have the option to reallocate unspent funds to other broadband projects.

The agencies should look at overlapping efforts because the U.S. government faces a $1.48 trillion budget deficit this year, said Representative Greg Walden, an Oregon Republican and subcommittee chairman. "We have a responsibility to cut costs," he said.

The Republican complaints about the broadband stimulus program came the same day that President Barack Obama called for Congress to spend $18.7 billion to subsidize 4G mobile broadband deployment to 98 percent of the country within five years and to build a nationwide mobile broadband network for emergency response agencies. The programs would be funded through spectrum auctions.

Republican subcommittee members pointed to complaints by broadband providers in five states, including Illinois and Maine, that the funding from 2009's American Recovery and Reinvestment Act was being used by competitors to compete against existing service. Walden and other Republicans repeated old criticisms that the Recovery Act pushed out the broadband money before a national broadband map was complete.

The RUS provided $101 million in grants and loans to Rural Telephone Service (RTS), with part of the money used to overbuild existing broadband in Hays, Kansas, said Gary Shorman, president and CEO of broadband provider Eagle Communications.

"We're wasting government dollars, taxpayer dollars, my dollars, to provide a competitive service in the markets that we serve, markets that have multiple broadband providers," Shorman told the subcommittee. "There has to be a fair playing field. If one provider has a boatload of government taxpayer money, it makes it very hard for a private, small company like ours."

Without a broadband map, duplication was likely, said Representative John Shimkus, an Illinois Republican. "We messed up royally when we didn't go buy the broadband map," he said.

But some Democrats on the subcommittee questioned whether Shorman has a legitimate complaint. RTS didn't return a message seeking comment, and RUS Administrator Jonathan Adelstein didn't testify at the hearing, but Representative Michael Doyle, a Pennsylvania Democrat, said the RUS sent employees to Kansas to review the RTS application for funding and found it valid.

The RTS broadband proposal would cover 4,600 square miles, and the overlap with Eagle Communications is less than eight square miles, Doyle said. Less than 20 percent of the RUS award would be spent in Hays, where there would be overlap, he added.

But Hays, with a population of about 20,000, represents about half of the population the RUS project would serve, Shorman said. "We're not serving square miles," he said. "We're serving customers."

Democrats on the subcommittee called for more funding for the inspector generals overseeing the broadband programs at the two agencies.

Congress needs to ensure that the programs are efficient and effective, said Representative Anna Eshoo, a California Democrat. The U.S. is falling behind other countries in broadband deployment, she said.

"We need significant investment from both the public and the private sectors," she said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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