Saving the Broadband Stimulus

Carl Weinschenk

Take an inexperienced government bureaucracy, mix it with an overflow of grant money, and throw in a highly polarized, politicized atmosphere. The result isn't hard to predict: unhappy applicants, delays and general grumpiness.

NextGov reports that there are significant problems surfacing in the process of awarding monies from the $7.2 billion stimulus program, which is part of the $787 billion American Recovery and Reinvestment Act of 2009. For instance, one company cited in the story had to pay $80,000 in application fees-without having a guarantee of getting any stimulus money. The story says the bulk of the problems are being blamed on the Agriculture Department's Rural Utilities Service (RUS). The RUS, along with the National Telecommunications Information Administration (NTIA), a part of the Commerce Department, are charged with awarding the funds.

The story says that the RUS's obligations have skyrocketed. Its responsibilities for grant awards under the stimulus are $2.5 billion, up from $7 million annually before. That, of course, raises the possibility that it is in over its head. Critics also complain that its standards for awards are too restrictive.


The good news is that the feds seem to be making an effort to prevent the process from degenerating into the chaos that critics expect from every government program. Last week, the NTIA and the RUS announced that the number of rounds of applications has been reduced from three to two, and that they asked for comment on how to streamline the process. Winning bids for the first round, which could total about $4 billion, will be announced in December. That's about a month later than the original plan.


Craig Settles, a consultant who advises various parties on broadband matters, takes a look at what the government is looking for in the request for information (RFI) that aims to streamline the process. The piece shows the shortcomings of the current structure. Settles says that among other things, the RFI seeks comments on the nature of the initial rules, which he says favor private telecommunications companies, the definition of key terms such as "un-served" and "underserved," and the effectiveness of the volunteer review panels.

The Wall Street Journal offers an overview and details on the transition from three to two rounds of funding and delay of the initial awards announcements until next month. The story says 2,200 applications were received for the first round, and reinforces the feeling that the process is too cumbersome, especially for small organizations. The Government Accountability Office has raised concerns. These include the difficulty of getting all the money out the door by next September, a stipulation of the stimulus, and monitoring of projects after 2010.

The good news and bad news here is clear. The bad news is that the broadband stimulus program is in dire straits and is struggling to fulfill the objectives set for it. On the other hand, the NTIA and RUS are showing a refreshing willingness to revisit decisions in an effort to get things right.

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Add Comment      Leave a comment on this blog post
Nov 17, 2009 4:52 PM Liz Zucco Liz Zucco  says:

It's not the RUs that has fallen apart here but the NTIA. The RUS has been administering programs including grants and loans since the turn of the 20th century.

As someone who has over $30M in funding under her belt with the RUS, I can assure you that they are as predictable as even. It's a shame that the consultants who are advising clients do not have any background in obtaining funding for them.


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