FCC Commissioner Offers Commonsense Advice to Rural Utilities Service | Citizens Against Government Waste

FCC Commissioner Offers Commonsense Advice to Rural Utilities Service

The WasteWatcher

Publicly-funded broadband overbuild is an ongoing problem across the country.  It is far easier to deploy new services alongside existing infrastructure than to build-out to those who remain in unserved areas. 

On March 23, 2018, President Trump signed into law H.R. 1625, the Consolidated Appropriations Act of 2018, which funds the government through September 30, 2018.  As part of the bill, Congress created the Broadband e-Connectivity Pilot Program within the U.S. Department of Agriculture’s Rural Utilities Service (RUS).  With an appropriation of $600 million, the intent was to provide funding to help bring broadband to unserved rural communities across the country.

The 2009 federal stimulus program allocated $7.2 billion for broadband programs through the National Telecommunications and Information Administration’s (NTIA) Broadband Technology Opportunities Program (BTOP), and RUS’s Broadband Initiatives Program (BIP). 

By December 2011, RUS had issued 227 stimulus loans, grants and contract awards, totaling $1,151,246,819 in BIP funding.  At the time, 15 projects had been completed; 110 were less than 50 percent complete; 69 were more than 50 percent complete; and 33 had not yet started.  By 2013, RUS had obligated $3.5 billion in funding for the BIP program ($1 billion more than the amount provided in the stimulus) for 320 projects in 44 states and territories.  According to a July 28, 2015 Politico exposé, “Wired to Fail,” RUS sometimes ignored its rural mission by using stimulus funding for high-speed internet in well-populated areas; mismanaged broadband projects so badly that they failed or were ineffective; allowed loans to go delinquent; and permitted borrowers to go into default.

Thankfully, when Congress included the Broadband e-Connectivity Pilot Program in the Agriculture Appropriations bill, it set certain parameters for RUS to follow to ensure that the funding went towards provisioning broadband to unserved areas of the country first.  Among the programs requirements are that at least 90 percent of the households served by a project receiving a loan or grant under the program be in a rural area without sufficient access to broadband at a rate of 10 Mbps downstream and 1 Mbps upstream; grant or loan recipients shall not use the funding to overbuild or duplicate broadband expansion efforts by any entity that has received a broadband loan from RUS; and, not more than four percent of the funds can be used for administrative costs to carry out the pilot program.

On September 10, 2018, Federal Communications Commission (FCC) Commissioner Michael O’Rielly provided comments to RUS to assist the agency in developing a strategy that would ensure that those who are truly unserved have their broadband needs met before funding is provided to those communities that are already served.  Among Commissioner O’Rielly’s recommendations were for RUS to 1) focus on bringing broadband to the truly unserved, with no access at all; 2) identify “eligible rural areas” based on areas where “broadband would not be built otherwise;” 3) exclude areas already funded by other agencies, such as the FCC’s Connect America Fund, or NTIA’s BTOP program; 4) to coordinate with the FCC and NTIA to ensure that funding is distributed to where it is needed most; and, 5) to disburse the funds using an auction mechanism similar to that used by the FCC for awarding universal service support.

Commissioner O’Rielly’s commonsense recommendations to RUS would go far toward ensuring that taxpayer funds are not squandered on projects that overbuild broadband networks where communities are already connected to broadband.  RUS would do well to take his comments into consideration when formulating the path forward for the pilot program.