NCTA contends broadband stimulus funding is being misallocated

One of the big problems with the broadband stimulus program is the lack of clarity on what actually is an "unserved" and "underserved" broadband area. Case in point is the National Cable & Telecommunications Association (NCTA) and member company Eagle Communications' protest of a $101 million broadband grant given to Rural Telephone Service Co.

While individual service providers have continually lodged protests against various projects, this is the first one where the NCTA has asked for a review of one of the grants.

Eagle Broadband's president Gary Shorman told the leaders of the National Telecommunications & Information Administration and the Rural Utilities Service in a letter that instead of targeting an unserved or underserved community, the majority of the money being spent is on Hays, Kansas, an area he says is "already one of the best-served communities in western Kansas." Instead of building out broadband facilities in other rural areas that are 99.5 percent unserved or underserved, Rural Telephone Service Co. will be overbuilding in Eagle's territory.

NTCA isn't the only one crying foul on how the stimulus money is being doled out. During a subcommittee oversight hearing Thursday on NTIA and the Rural Utilities, Joe Barton (R-Tex.), House Energy & Commerce Committee ranking member, expressed similar concerns.

"What disturbs me most are the rumors that some of the funds that have been distributed by NTIA and RUS are for projects that overlay existing broadband infrastructure," said Barton. "I'm aware of at least two projects that appear to be overbuilds, and given the relaxing of the rules for the next round of funding from the NTIA, this problem will only get worse."

For more:
- Multichannel News has this article on the NCTA
- Multichannel News also covered the oversight hearing

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