NTIA Defends How Fast It Releases Broadband Awards
Senators from both parties said NTIA is too slowly dispersing broadband stimulus funds under the American Recovery and Reinvestment Act, during an Appropriations Commerce Subcommittee hearing Thursday. Chair Barbara Mikulski, D-Md., said she’s concerned NTIA has only awarded $300 million in grants, even though it was given $4.7 billion to dole out by Sept. 30, 2010. Ranking Member Richard Shelby, R-Ala., said the administration seems to be “negligently … and wastefully sitting on a grand total of $6.5 billion in taxpayer’s money.”
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Constituents are complaining that it’s taking too long to get broadband funding, said Mikulski: “Like many people across the nation, I'm frustrated.” The subcommittee wants to know “why we can’t we get the money out faster [and] what are you doing to get the money out faster,” she said. Meanwhile, Shelby said the Broadband Technologies Opportunities Program has become a “poster child” for “why the stimulus was and continues to be a disaster for American taxpayers.” The Republican said he would “prefer to be hearing about the success that NTIA has had with implementing the program, but there’s no way around the fact that NTIA has fallen well short.”
NTIA expects to get $1 billion in first-round awards out by the end of February, and award all BTOP grants by the end of September 2010, as required by the statute, said Commerce Secretary Gary Locke. In the “next few weeks,” NTIA plans to finish contacting applicants to let them know if they're still being considered for the first round, he said. Second-round applications are due March 15. “We're going to do this project. We're going to succeed. We're going to meet the timetables, with due diligence, avoiding waste, fraud and abuse. And we're going to have great projects, and meet all the requirements.”
Commerce Department officials insisted NTIA is moving as fast as it can and should. An intensive review process in the first round was necessary, because NTIA received $19 billion in requests in the first round, but only had $1.5 billion to award, said Locke. And a recent Inspector General’s report actually urged the agency to slow down, he said. The agency has an obligation to minimize waste and fraud and ensure that only viable projects get funding, he said. “We don’t want to announce grants that disappoint people.”
NTIA Administrator Larry Strickling said the agency must act like a private equity or venture capital firm when considering projects. “My absolute mandate here is to make sure we don’t fund a bad project, because if these projects aren’t running five years from now after the federal dollars are long gone, then we haven’t done our jobs.” Still, the agency has streamlined the review process for round two, and aims to spend less time reviewing projects that won’t be funded, he said.
It’s important to spend time to get broadband stimulus right, and taxpayers want legislators to “err on the side of due diligence,” agreed Mikulski. However, “we do not want to add to the cynicism of dysfunction” in the government, she said. “We do not want a techno-Katrina here.”
Senators also voiced concerns about NTIA’s priorities for awarding projects. Sen. Lisa Murkowski, R-Alaska, said she'd heard rumors that second-round rules don’t require a project to target unserved and underserved areas. Strickling said that unserved and underserved will still be a top focus, but it’s no longer a “technical eligibility requirement.” The requirement was removed to address complaints in round one that only anchor institutions in unserved and underserved areas could receive grants, he said. Meanwhile, Shelby said he was concerned that two-thirds of the money doled out so far has gone to six states. Strickling replied that the law “urges” NTIA fund projects in all 50 states, and the agency plans to meet that directive.
Shelby also questioned an NTIA decision to spend $33.5 million on a rural area in Georgia that the senator said is already 90 percent served. Windstream is the incumbent broadband provider there. But Strickling said the area is underserved. “We had five county development offices in that part of the state saying they can’t get the service they need to attract new businesses into that area,” he said. “This is a classic case of an underserved area where the provider that’s there is not meeting the needs of the folks who live there.”
Windstream sells “100 Mbps Ethernet business services throughout the project area as well as DSL at speeds of 3 Mbps to 12 Mbps to the vast majority of consumers in the area,” said Mike Rhoda, the company’s senior vice president, after the hearing: “Although Windstream followed NTIA’s process and notified the agency that the North Georgia project area was not underserved, Windstream did not receive any follow-up questions from NTIA. Even worse, it appears that the public was not given the opportunity to comment on the project area in its entirety.”