BTOP Cuts Troubling to Applicants, Public Safety
A $302 million cut in the NTIA’s Broadband Technologies Opportunities Program, signed into law by President Barack Obama this week (CD Aug 12 p8), raises questions for applicants -- many of which spent tens of thousands of dollars in their efforts -- and for public safety agencies across the country that hope to use grants to build out networks in 700 MHz spectrum. RUS’s broadband program was not cut. Many applicants were surprised by the cut, which came in a bill providing $26.1 billion to states for Medicaid and teachers’ jobs.
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The law took away almost 10 percent of $3 billion that remained to be awarded by NTIA under the American Recovery and Reinvestment Act. But an administration official framed the cut as 4 percent of the original $7.2 billion investment and emphasized that the money was taken “to help avert imminent layoffs and meet emergency state funding needs.” The law didn’t take broadband money from RUS, and in fact specified in Section 301 that no Recovery Act money be taken from the Agriculture Department. Last month, the Senate rejected provisions in a defense supplemental bill that would have taken $300 million from RUS’s broadband program and $302 million from NTIA (CD July 26 p6).
"It’s very unfortunate,” said Telepoly President John Windhausen, who advised BTOP applicants. “Many schools, libraries and health organizations that need greater broadband connections to serve their communities and spent a lot of money to prepare applications will go unfunded.” Cutting the BTOP funds was “not the right thing to do,” said Tom Wacker, vice president at the National Telecommunications Cooperative Association, whose rural members have received awards under the NTIA and RUS broadband programs. “It really is indicative of the disconnect that policymakers have had over this issue for years,” he said. “Everybody wants to talk about the necessity and the value of ubiquitous broadband deployment, but nobody wants to recognize the cost that goes along with that.” The good news is that the law didn’t cut RUS money, too, he said.
Success.com analyst Craig Settles said he was surprised when the cut became law. Settles said BTOP proponents had helped turn back an earlier proposal to cut $600 million from the program. “We somehow survived that because there was a push back in Congress,” he said. “Then out of the blue comes this $300 million cut, done a little more stealthily.” Settles said reaction to the cut from BTOP applicants has been “somewhere between despair and outrage. … It was been a very frustrating process to be an applicant. … To look at one more slap at applicants in this way is not very heartening.” Applicants were already concerned that much more money was sought than available, he said. “They feel like there was a lot of effort and where is it all getting us?"
A former federal official said it’s not surprising that BTOP would be cut, since much of the money approved for grants remains unspent. Hill staff “probably surveyed the landscape, looked where funds were available, and there was a pool of dollars,” the official said. “Any unobligated, unexpended balances when you're in a pinch to come up with dollars are irresistible.” The state-aid bill was important to the Obama administration, and finding a “pay-for” offset was key to getting it passed, a telecom industry official said.
NTIA changed its rules to allow 21 public safety agencies that received FCC waivers to build wireless networks using 700 MHz spectrum to pursue BTOP grants, giving them a later filing deadline than other applicants. Officials from New York City, Washington, D.C., Hawaii and elsewhere said in the filings at the FCC that they had filed BTOP applications (CD July 21 p9).
Harlin McEwen, chairman of the Public Safety Spectrum Trust, said the cuts were “disappointing.” He added, “A number of localities, regions and states have applied for BTOP funds and have been hoping to get some of the BTOP funds to help build out their broadband systems. … This may reduce the amount available for public safety.” But APCO said in a statement that it’s not concerned. “The reduction of the BTOP funding should not in any way reduce the amount of funding that is being set aside for the waiver entities. … Any reduction of funding in BTOP grants should be targeted to non-essential broadband deployments."
"We're disappointed to see less funds go to broadband,” said Steve Berry, president of the Rural Cellular Association. “But quite frankly the BTOP program has spent an enormous amount of resources on middle-mile projects that are sort of gold-plated types of projects and some of these projects are only fiber. We have been urging for some time, not only NTIA but also RUS, to fund more cost-efficient effective technologies to enhance broadband deployment, which we think is wireless. As much as I hate to see the funds reduced, more of our members look at this and say the way the track record of the administration has been there’s low likelihood those funds would have actually be spent” on wireless.
RCA was already disappointed at the lack of BTOP and RUS funding that went to wireless in the first round of awards. “Some of these small companies spent a ton of money for them, $150,000 or so, to perfect these applications and put them in in a timely fashion and in many instances never even got a reason why they weren’t funded,” Berry said. “If this administration is so concerned about developing and deploying broadband they ought to start looking at the most cost effective way” to fund deployment. RUS awarded money to only six wireless projects and 38 wireless and fixed wireless projects, Berry noted. “We figured they spent less than 11 percent of their funds on a wireless solution,” he said. NTIA fails to recognize that wireline carriers are losing 700,000 subscribers every month “and they're moving to mobile broadband,” he said. “I'm just trying to figure how serious is this administration about getting broadband out to rural America. They talk a good talk, and they have a good technical presentation in the National Broadband Plan.”