Three years after Congress allocated more than $7.2 billion to spur broadband access and adoption, many House Republicans continue to question whether the money has been well spent.
The 2009 economic stimulus allocated $4.7 billion to the Commerce Department’s National Telecommunications and Information Administration to establish the Broadband Technology Opportunity Program, while the Agriculture Department’s Rural Utilities Service received $2.5 billion for its Broadband Initiatives Program.
At an Energy and Commerce Communications and Technology subcommittee hearing, Republicans highlighted one case of possible misuse of the broadband funds.
Subcommittee Chairman Greg Walden, R-Ore., pressed NTIA Administrator Larry Strickling about a $126 million grant to West Virginia, which used some of the funding to buy more than a 1,000 powerful Cisco Internet routers. Walden questioned whether it was a waste to install these costly high-powered routers, which retail for $22,000 each and are designed to serve a minimum of 500 users, in small libraries or elementary schools with one or two computers.
Strickling, however, said that Cisco provided the routers for only $12,000 each and that the state found it more economical to buy one type of router for all the institutions it was serving, allowing those facilities to serve additional computers in the future.
“Overall, it appears to us, based on our review, that the state made an economic decision well justified by the facts,” Strickling said.
But Walden, and Rep. John Shimkus, R-Ill., weren’t buying Strickling’s explanation. “As much as you try, you just can’t defend what’s going on in West Virginia,” Shimkus said.
Several GOP members also questioned whether the broadband grants are being used to reach Americans who are not already being served by private broadband providers.
“Overbuilding has been a perennial concern with these programs, so I want to hear how the agencies are taking into account existing deployments when they provide us numbers. And even if these were new deployments, might the private sector have met these needs more efficiently in the absence of this cumbersome subsidy program?” Walden asked.
Before the stimulus funding, the Rural Utilities Service was criticized for providing loans in areas already served by other broadband providers. In his written testimony, Agriculture Deputy Inspector General David Gray said he worries that the first round of awards under the Broadband Initiatives Program authorized applicants to apply for funds for broadband projects in areas that may already be covered.
“RUS policies allowed overlapping broadband coverage, a practice that, as we have noted before, could lead to RUS encouraging competition rather than expanding service to areas without any broadband access,” Gray said. “Such competition could event result in RUS funded providers failing due to too much competition in markets where there is little demand.”
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