OPASTCO Says FY 2011 Cuts at RUS Could Hurt Rural Broadband
Some rural telcos are worried that cuts to the Rural Utilities Service budget in the fiscal 2011 continuing resolution could upset rural broadband investment. But other groups are breathing a sigh of relief that the budget deal, up for a House vote Thursday, dropped a proposal to prohibit the FCC from acting on its net neutrality order. The resolution would fund the government through September.
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The resolution would provide $22.32 million for RUS broadband loans, which industry officials said would support up to $400 million in loans. But it would rescind $39 million in carry-over balances from previous years. The measure also would authorize $13.4 million to pay for broadband transmission under the Distance Learning and Telemedicine program but rescind $25 million in carry-over balances. The resolution would fund the FCC at $336 million, the amount that the commission got for fiscal 2010 but less than the $352 million that the FCC requested. The commission has tweaked its plans so it can work with less money than sought, FCC Managing Director Steven VanRoekel told us. The resolution would give the NTIA $41 million, consistent with current levels. The resolution also would impose a 0.2 percent spending reduction across the government.
"The FCC is aware that all agencies faced austerity measures in the budget process and we worked to develop operational levels to support our important work within the FY10 numbers,” VanRoekel said by email. “From a practical standpoint, it means we had to make some funding cuts, like removing plans to hire additional advanced staff and instead get creative with an early retirement program, to streamline operations to come into the FY10 numbers. We will continue to work with the Appropriators on making sure we are funded at sustainable levels for this and future fiscal years.”
The NTIA would have enough money under the resolution to cover its broadband stimulus oversight duties, an agency spokeswoman said. The RUS declined to comment. Chairman Greg Walden, R-Ore., of the House Communications Subcommittee said after a hearing Tuesday afternoon that he probably will support the resolution but he needs to take a closer look.
"OPASTCO is concerned about the proposed cuts to RUS, both in its broadband program and administrative budget,” a spokeswoman for the group said by email. In written testimony submitted Tuesday to the House Appropriations Committee, OPASTCO Vice President Randy Tyree said proposed cuts to RUS are all the more dangerous with the FCC considering an overhaul of the Universal Service Fund and intercarrier compensation. The overhaul “may limit rural carriers’ ability to upgrade the broadband speeds provided to rural customers and to extend service to additional rural customers,” he said. “If rural carriers’ revenue streams are not stable during a transition to a new regulatory regime or once that new regime is in place, it will be very difficult for them to obtain financing from either private or public sources. Reduced access to financing will lead to reduced investment in rural networks."
But other rural carriers said they were glad that the broadband programs would receive at least some money. The National Telecommunications Cooperative Association “is pleased that the CR provides funding for the RUS Broadband Program and the Community Connect Program for the remainder of FY 11,” CEO Shirley Bloomfield said by email. “Yet some rural areas continue to be left behind by providers that stand on the sideline -- choosing not to provide service to rural areas -- and then criticize the programs that make it possible. The RUS programs are necessary for the companies that have committed to providing broadband service beyond lucrative urban areas to overcome market obstacles in rural areas."
With the net neutrality rider likely scuttled until the end of September, the Congressional Review Act is now Republicans’ weapon of choice against the FCC’s December order, Walden said Wednesday at the American Cable Association Summit. “That’s the best way” to fight the commission on net neutrality, he said, and he hopes that the Senate will soon take up the resolution of disapproval that the House approved last week. Walden hasn’t decided the fate of the net neutrality budget rider that he successfully pinned to HR-1, the original House continuing resolution, he said. “We'll see what happens.”
Some analysts considered the net neutrality rider more likely to pass than the Congressional Review Act joint resolution of disapproval, because as a rider it was just one piece of a larger battle over federal spending (CD Feb 22 p1). The House passed the joint resolution, but it faces a steep climb with the Senate controlled by Democrats and a veto threatened by President Barack Obama.