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Dep't of Agriculture IG flames RUS broadband stimulus program
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The U.S. Department of Agriculture's inspector general (IG) has released a report saying the Rural Utilities Service's (RUS) broadband program may not have the chops to distribute effectively the $2.5 billion in extra funding provided by the broadband stimulus package.
RUS was heavily criticized in 2005 when auditors found issues with a quarter of the funds its broadband program had handed out in the first four years of operation. Monday's report said RUS continued to grant loans to areas that already have broadband service and to communities near major cities - not the purpose of the program.
Funds out of the RUS broadband program should be going to projects that provide service to the most rural residents that do not have access to broadband service, but in 2005, RUS provided $45 million for a project in Texas to wire up a golf course community.
More than 90 percent of the loan applications RUS had approved since 2005 were for areas that already had broadband service, a finding that gave the IG concern. About 148 projects that got RUS loans were within 30 miles of cities with more than 200,000 people, including communities outside of Chicago and Las Vegas.
With $2.5 billion on deck in the broadband stimulus package, RUS will have nearly twice as much cash to manage as the amount of loans they've passed out in the last eight years.
For more:
- ProPublica post.
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The RUS plans to distribute stimulus funds this year
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Comments
Posted by Luisa Handem | April 16, 2009 - 1:02am
Good timing for the U.S. Dept. of Agriculture Inspector General's report. The Rural Mobile Broadband Alliance (RuMBA) USA, a non-profit from the state of Texas, has various testimonials, from its rural broadband providers, that confirm some of the findings of the report.
Here's what a small rural provider from Arizona posted on our blog site, rumbausa.com:
"I am both pleased and disheartened at the news of grants for rural broadband. For 5 years I have worked a full-time job and built a wireless ISP for my community with my own two hands. In September 2008, I had enough customers to force my decision to quit my full-time job and focus on the WISP. My customers are very happy with my service.
Over the same time period, 30 miles away, another WISP started out with a DHS/USDA grant worth Millions and built a network almost overnight. That company drove out 3 different wireless startups. After millions of dollars, several years and a lot of broken promises, that company's wireless network is not functional and carries no data.
My hope is that this new money will be used more wisely... As of yet, I have no suggestions on how that might be accomplished.
My biggest fear is that my hard-earned tax monies will be handed over to some giant corporation like Qwest or Verizon that will use this money to dislodge competitors and yet still leave us with the same old busted infrastructure.
If there was some way to test whether the grantee actually had in mind the best interest of the community it would serve, half the problem of awarding the monies would be solved."
The above is a strong plea from a small capable provider that may be bypassed by the stimulus funds. NTIA, RUS in particular, needs to exercise caution, take the necessary time to make the stimulus money achieve what it's meant to do: to help equalize access to high-speed Internet/Broadband in our country, by subsidizing rural and remote areas, currently unserved.
Luisa Handem
Managing Director
RuMBA USA
www.rumbausa.com
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