Walden Seeks ‘Safeguards’ for Broadband Stimulus
House Republicans aren’t on a “quest” to take back broadband stimulus money already obligated, said Communications Subcommittee Chairman Greg Walden, R-Ore. He has a draft bill (CD Feb 10 p7) to speed the return of unused and misused money provided under the American Recovery and Reinvestment Act. After a hearing on the draft Thursday, Walden told reporters his goal is to set up “safeguards” to ensure that problems with broadband stimulus programs are found and to hasten the return of money to the U.S. Treasury.
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"My hope is that there’s nothing here, but I live in a small business world that says, ‘Trust but verify,'” Walden said. The chairman said he doesn’t plan to press RUS to rescind money used in places where rural incumbents complain that overbuilding may have occurred. “I don’t think that’s where we're headed,” but the issue does raise the question of what the terms “unserved” and “underserved” mean, Walden said. “You're always going to have a little overlap” among networks, “but what you don’t want is to take the taxpayers’ money … and overbuild and overbuild in the same place. … You want to minimize the overlap and maximize getting service to those areas that don’t have” broadband.
Walden said he wants to introduce his draft bill “sooner rather than later” but will first collect more input from Democratic colleagues as well as the agencies responsible for oversight. He said he plans another hearing with the NTIA and RUS administrators present.
Ranking Commerce Committee Member Henry Waxman, D-Calif., asked why Walden’s bill is necessary. “None of us should oppose the prompt return of unused Recovery Act funds to the U.S. Treasury, and I believe that is what current law requires,” he said at the hearing. “We should discuss how this new legislation differs from existing statutory requirements. We also should be careful not to establish a process to defund projects without good cause, especially now that obligated money has been translated into real projects with real jobs in every state."
The draft bill would be “helpful to eliminate any ambiguity” in the law, said Todd Zinser, inspector general of the Commerce Department. Wall Street reform and a few other pieces of legislation have created confusion about the process for taking back Recovery Act funds, he said. But any new legislation should provide enough time for “due process” to be done, since taking money from recipients can be “a long, drawn-out process,” he said.
RUS hasn’t had “difficulty in the past” with taking money back, said Phyllis Fong, inspector general of the Agriculture Department. She agreed that legislation should recognize the time the effort takes. She also sought clarity on how the bill would apply to award packages of both grants and loans.
Democratic and Republican tempers flared over the issue of overbuilding. Eagle Communications CEO Gary Shorman told the subcommittee that RUS gave a grant to a competitor that’s using the money to overbuild Eagle’s network. Subcommittee Anna Eshoo, D-Calif., asked Shorman why he had a “beef” with giving consumers a choice of broadband providers. Rep. John Shimkus, R-Ill., replied that Eagle’s rival is unfairly using “free money” from the government to compete. “Isn’t that the beef?"
The Recovery Act allowed for some overbuilding, said Mark Goldstein, director of physical infrastructure issues for GAO. NTIA and RUS did analyses where overbuilding occurred and they reviewed complaints by incumbent providers, he said. The agencies reviewed submitted materials and comments, did interviews and looked at maps, Goldstein said. GAO has reviewed only the first round of funding. More money was awarded in the second round, faster and with fewer criteria, he noted. “It remains to be seen whether that same level of due diligence occurred."
Paying for Oversight
Democrats and Republicans agreed that NTIA needs funding to do proper oversight of the Broadband Technologies Opportunities Program. The agency has about $20 million for the purpose in the current continuing resolution, which expires March 4. But some conservatives want to see the funding slashed (CD Feb 3 p1). Walden told reporters he expects the next continuing resolution to “at least” extend NTIA’s authority to use that $20 million.
There’s no argument about whether to give NTIA money for oversight, but it’s an issue because the Recovery Act didn’t provide any funding for the work after September 2010, Walden said. “We want to make sure that there’s appropriate and aggressive oversight.” Rep. Lee Terry, R-Neb., the subcommittee’s vice-chairman, said during the hearing that he hopes Congress can “act quickly but prudently in providing NTIA and RUS the appropriate resources” to do oversight.
"We need to ensure that the IGs and agency program managers have enough resources” for oversight, Waxman said in an opening statement. “With billions of dollars invested in hundreds of broadband projects throughout the nation, it would be irresponsible for Congress to skimp on oversight funding."
The GAO, Commerce and Agriculture officials agreed that a future lack of oversight funding at NTIA and RUS would hurt the agencies’ ability to fight fraud and abuse. It also would diminish the agencies’ ability to ensure the programs are successful, they said. Zinser said the agencies may actually need more money for oversight, especially if they get a large number of complaints.