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Congress

Panel Will Probe Broadband Spending

February 8, 2011

A House Energy and Commerce subcommittee will hold an oversight hearing Thursday on the Obama administration's program to provide grants to spur broadband access and adoption in unserved and underserved areas while also examining what should be done with any unused funding or money that was improperly used or allocated.

The Communications and Internet Subcommittee will examine how well the administration did in allocating the $7.2 billion included in the 2009 economic stimulus package for broadband. The funding was split between the Commerce Department's National Telecommunications and Information Administration, which got $4.7 billion, and the Agriculture Department's Rural Utilities Service, which received the remaining $2.5 billion.

The panel, chaired by Rep. Greg Walden, R-Ore., also will debate draft legislation that would require the return to the federal treasury of any broadband funds that have been found to have "demonstrated an insufficient level of performance or wasteful or fraudulent spending," according to copy of the draft bill obtained by Tech Daily Dose.

Both NTIA and RUS distributed the funds through grants, loans or grant-loan combinations during two rounds. All of the awards were made by the Sept. 30, 2010 deadline included in the stimulus law but so far only about $400 million has been disbursed by the two agencies, according to a congressional memo on the program.

The CEO of a small telecommunications firm in Kansas will likely raise his concerns with how the funding was allocated. Eagle Communications President Gary Shorman, who is slated to testify, wrote Agriculture Secretary Tom Vilsack and RUS Administrator Jonathan Adelstein last March to voice concerns about a $101 million grant that RUS announced in January 2010 to the Kansas-based Rural Telephone Service Company, which is supposed to provide broadband service to an area 99.5 percent unserved or underserved now.

Shorman, however, argued in his letter that the funding is directed at providing broadband in "one of the best-served communities in western Kansas." He noted it is served by his firm and other carriers.

During a National Journal Live event Tuesday, Energy and Commerce Chairman Fred Upton, D-Mich., was asked about the hearing. He wouldn't predict what the panel might do in response to the oversight hearing, saying that "I can't tell you how the hearings will unfold."

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