Recovery Act Broadband Funds: Boon or Bust | Citizens Against Government Waste

Recovery Act Broadband Funds: Boon or Bust

The WasteWatcher

When he signed the American Recovery and Reinvestment Act of 2009 (ARRA) or stimulus, President Obama promised that the $862 billion expenditure of taxpayer dollars would provide jobs and improve the economy. Everyone has heard about the “shovel-ready jobs,” and seen signs along the highway touting the use of ARRA funds for improvements, but beyond roadwork loans to failing solar companies like Solyndra, there were many other outlets for stimulus funds.

Two programs receiving stimulus dollars are not well-known; they were designed to provide funding to increase national broadband deployment in either unserved or underserved areas of the country. The Rural Utility Service’s (RUS) broadband loan program received $2.5 billion in stimulus funding for the Broadband Initiatives Program (BIP), and the Department of Commerce’s National Telecommunications and Information Administration (NTIA) received $4.7 billion for the Broadband Technology Opportunity Program (BTOP).

In December 2011, The Daily Caller reported that as of the third quarter of 2011, projects funded through the BTOP program had a zero completion rate. now shows that of the 844 grant awards and contracts totaling $4,456,797,171 issued by the NTIA, only 26 have been completed, 192 are less than 50 percent complete, 623 are more than 50 percent complete and 3 have not yet started. According to the website, the RUS has given out 227 loans, grants and contracts under the stimulus program, totaling $1,151,246,819 in total funding. From these awards, 15 projects have been completed, 110 are less than 50 percent complete, 69 are more than 50 percent complete, and 33 have not yet started.

The incomplete projects include seven public safety network initiatives by BTOP grantees who were ordered in May 2012 by NTIA to stop their work. The NTIA had concerns that the networks would not be compatible with a new FirstNet national first responder network created by passage of the Middle Class Tax Relief and Job Creation Act of 2012. Until NTIA determines how the new FirstNet network will operate, the projects remain on hold.

According to the Broadband Loan and Grant program, the RUS has obligated $3.5 billion in funding for the BIP program to 44 states and territories for 320 projects. However, in spite of the program’s widespread funding reach, it does not necessarily mean the money is being spent wisely by grant recipients. In the July 2012 WasteWatcher, Citizens Against Government Waste reported on the expenditures of one of the BIP recipients, the “West Virginia Statewide Broadband Infrastructure Project,” which received $126 million to expand broadband access to schools, hospitals, libraries and community centers in underserved or unserved areas of the state. The state spent $24 million of that money to purchase high capacity routers, each of which can provide up to 1,000 connections at a time. These routers cost $22,600 each, and were distributed to some larger institutions for which they were built, as well as to small community centers and libraries that have between two and six computer connections. According to a May 8, 2012 editorial in The Charleston Gazette, it was later determined that because many West Virginia public facilities already have broadband routers, 366 of the devices worth $8.27 million in taxpayer funding have not been installed and currently sit in warehouses.

Even data tracking of BIP project deployment has been less than successful. On September 14, 2012, the Government Accountability Office (GAO) issued a report which reviewed the data provided by RUS and NTIA on broadband spending under ARRA. The GAO found that while NTIA collected data on its broadband projects and was able to project a 76 percent completion rate, the RUS was not so diligent. The agency did not collect timely or sufficient data, so it was unable to provide a reliable measure for deployment of fiber miles and wireless access points. GAO was informed by RUS officials in June 2012 that they had begun tracking the number of fiber miles and wireless access points deployed by BIP projects, but were uncertain of the quality of the data collected.

Encouraging increased broadband connectivity is important, and many private sector companies have already stepped up and improved service for both wireline and wireless customers. However, when taxpayer funds are used through either grant or loan programs, there should be improved accountability for where and how tax dollars are being spent. Agency program administrators in charge of evaluating and processing the grant requests should maintain and monitor the spending and progress of each project from start to finish through data bases with measurable metrics in order to ensure the best use of taxpayer funds.

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