House Proposal Axing Broadband Loan Program Causes Outcry
The House would cut the broadband loans program at the Rural Utilities Service under fiscal 2012 budget legislation moving through the Appropriations Committee. The panel’s Agriculture Subcommittee late Tuesday approved an agriculture bill that counts the RUS program among its cuts. House Communications Subcommittee Ranking Member Anna Eshoo, D-Calif., slammed the proposed cut. USTelecom and the NTCA supported giving $22 million to the loans program under an amendment submitted by Rep. Cynthia Lummis, R-Wyo. At our deadline, the subcommittee voted not to adopt the Lummis amendment.
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Subcommittee Chairman Jack Kingston, R-Ga., “opposes the broadband program as he sees it as corporate welfare at its worst, duplicat[ing] other federal programs, and is not the best use of taxpayer dollars,” a spokesman said. The RUS broadband loans program had $22 million under the fiscal 2011 continuing resolution, supporting about $400 million in loans. The $17.2 billion Agriculture bill cuts $2.6 billion total from last year’s level and is $5 billion lower than President Barack Obama’s request. The RUS restarted its troubled broadband loan program earlier this year and published interim rules.
"This cut is a mistake,” Eshoo told us in a written statement. “Broadband access is absolutely essential to future economic growth and job creation. A smart overall strategy is to wire America to compete in an increasingly global marketplace. That’s what’s being cut.” Eshoo said she will “work hard to preserve our gains."
USTelecom urged support for the Lummis amendment, in letters sent Tuesday to Kingston and Ranking Member Sam Farr, D-Calif. “Like you, we were frustrated that it took almost three years for the agency to issue the regulations implementing the programmatic changes required by the Farm Bill,” CEO Walter McCormick wrote. There’s still interest in the program, and RUS has already received applications totaling $105 million, he said. The RUS program isn’t “duplicative” but instead “complementary” to the Universal Service Fund, McCormick said. USF supports ongoing operational support in high-cost areas, while the RUS program “supports the provisioning and upgrading of these services in order to extend broadband to hard to serve rural areas,” he said. “This is especially important given the fact that it has become increasingly difficult for small companies to obtain such loans through the private sector."
"The RUS broadband loan programs are absolutely critical to accomplishing policy-makers’ worthy goal of universal broadband availability -- most especially for the small independent carriers that have made the commitment to serving high-cost rural communities rather than focus on markets where the returns are the highest,” NTCA CEO Shirley Bloomfield said in a written statement. “At a time when increased broadband deployment is a national priority, it is disheartening to see some in Congress discount the value of the RUS loan program that has a long history of helping to connect rural communities to the global marketplace."
"Access to RUS broadband loans is critical to a rural carrier’s ability to continue investing in its communications infrastructure,” said OPASTCO Vice President Randy Tyree. “Without funding sources such as RUS broadband loans, rural carriers will have reduced access to funding that will lead to reduced investment in rural networks.” RUS didn’t respond to a request for comment.