BIP Disbursements Totaled $3.5 Billion; Metrics Concerns Expressed

Agriculture is relying on applicants themselves for jobs data, but all of the reporting has to be certified and will be posted quarterly at www.Recovery.gov, a RUS spokesman said. The stimulus is having a big impact on jobs, the spokesperson said. “All of the money that’s going out there has of necessity created jobs because you need somebody pulling the cables and laying the wires right away. They're pulling cable and putting up towers and those products are bought from somebody who has to manufacture them.”

The administration has promised to take a hard look at the stimulus results. Last month, NTIA said it had awarded a $5 million, four-year contract to Potomac, Md.-based ASR Analytics to examine the impact of Broadband Technology Opportunities Program grants. Bids were solicited in late July and ASR’s contract was announced in September, government records show. The money came through the Department of Interior’s National Business Center. NTIA officials have urged Congress to appropriate extra money during the lame-duck session this year so the agency can press ahead with oversight (CD Oct 12 p4).

Many GOP candidates in the November elections are running expressly against the stimulus spending. Hill Republicans have made clear that however the administration examines itself, they'll have questions.

"Congress must exercise vigorous oversight of the stimulus funds,” said House Communications Subcommittee Ranking Member Cliff Stearns, R-Fla., who has declared his interest in becoming the next Commerce Committee chairman. The Recovery Act required NTIA and RUS to dole out “a great deal of money in a short time, a combination of factors making it ripe for waste, fraud, and abuse,” he said. “We need to ensure that taxpayer money is not being used improperly."

Rep. John Shimkus, R-Ill., also been mentioned as a candidate for the top GOP job on the Commerce Committee, agreed: “Full, continuous, and in-depth oversight will be the only way to ensure the program is managed properly and not exaggerating its efforts,” a spokesman told us. Shimkus “has concerns that federal funds have been used to overlay broadband in areas already with service instead of focusing on under- and un-served areas,” the spokesman said. “And will that subsidized new entry be able to sustain itself without further government assistance?”

"The FCC needs the tools to administer and conduct oversight of these grants,” Senate Communications Subcommittee Chairman John Kerry, D-Mass., told us. “We've reached out to Republicans and welcome their help in securing the investments needed to make sure taxpayer money is spent effectively and efficiently. As with any program, the Congress should hold hearings and keep a close watch on how the agency handles the implementation. And let’s not forget that the GAO, the press, and constituents also have a role to play in the process. Anyone who believes in expanding broadband access and making it more affordable would welcome a thorough examination."

"Oversight hearings, GAO reports, and feedback from constituents will give us a good sense of the program’s success,” Kerry said. “So far, the broadband stimulus program has proven to be a strong example of well managed, well deployed stimulus funds that will deliver strong returns for Americans for years to come."

Democrats on the House Oversight Committee are “committed to rooting out waste, fraud, and abuse to ensure that taxpayer dollars for broadband stimulus funds are being spent appropriately,” said a Democratic committee staffer. “Robust oversight of the Recovery Act’s broadband program is necessary to ensure its success and to protect the more than $7 billion investment in the program.” Besides “significant reporting requirements” for all Recovery Act recipients, effective oversight must also involve participation from the GAO, inspector generals and Congress, the staffer said.

According to the July 27 request for qualifications, ASR will have to “study … the impact” of BTOP awards on “broadband availability, adoption and on economic and social conditions in areas served by the grantees.” NTIA also wants to know “the return on investment expected from BTOP grant funding, as well as identify factors influencing performance and impact that can be used to inform future effort."

There are worries about the metrics analysts will use to analyze stimulus programs, said lawyer Nicholas Miller of Miller & Van Eaton, who represented Los Angeles, Houston and several other cities and counties through the BTOP process. He’s also worried about how the administration will spread the word so that grantees can learn in real-time from other areas’ successes or failures, however defined. “There’s a tension between getting information quickly and making sure the information that’s put out there is accurate,” Miller said.

Miller is worried there will be economic pressure to suppress information on stimulus successes. “If these ideas are really disruptive to existing commercial models … we need to create a mechanism that drives additional innovation and delivery of these innovative services,” he told a breakfast panel Tuesday. “There’s not a natural mechanism for that. It’s going to have to be created.” The two biggest questions ought to be whether broadband was deployed where it previously hadn’t been, and whether the deployment was cheaper than it would have been under the traditional formula of universal service funding, Vice President Joshua Seidemann of the Independent Telephone and Telecommunications Alliance told us.

Psychologist and demographer Sara Wedeman, a former employee at NTIA who said she had a “brief, hideous tenure” there, said she was worried the agency was too chaotic to guide a study of this magnitude. Even if that can be overcome, any study is likely to be difficult because of the “intangibles” involved in broadband, Wedeman said. For instance, government officials routinely consider a population to have “access” to broadband if there’s a node in the population’s ZIP code. she said. “A ZIP code means something very different in rural Montana than it does in downtown New York,” she said. “Then, secondly, particularly in urban settings, you have nodes galore, but they're locked."

It may be too late to analyze broadband stimulus effectively, said Technology Policy Institute Vice President Scott Wallsten. “A real evaluation has to have as one of the potential outcomes that it did no good. And I don’t think NTIA would be allowed to have that answer,” he said. “That’s why evaluations should have been set up from the beginning.” Wallsten said the Obama administration should take a look at projects that weren’t funded. Did they succeed anyway? Organizers also have to be open to having projects fail, because the whole point of the broadband stimulus was to fund risky projects, he said. “If none of them failed, then we might not be taking enough risks. It’s a hard balance.” Last year, the Commerce Department’s inspector general urged NTIA to examine the failures of past grants programs -- especially the $1 billion Public Safety Interoperable Communications program under the Bush administration -- before doling out the BTOP grants (CD April 8/09 p2).

The BTOP study is the ASR’s largest government contract so far, according to data tracked by FedSpending.Org. That site is run by the non-profit group OMB Watch, which tracks government contracts and spending. Between fiscal 2004 and 2008, the company was paid nearly $684,000 in government contracts with the Treasury Department, FedSpending records show.