Lawmakers Spar Over Broadband Stimulus Grants
GOP members take aim at administration of broadband grants, warning against government subsidies for competition with incumbent providers and open access provisions.
House Republicans leveled pointed criticism at the agency heads overseeing broadband stimulus funding in an oversight hearing Thursday morning, blasting the decision to award grants and loans to fund projects in areas that already have some basic broadband service, when other regions are still without any form of high-speed connectivity.
The hearing comes as the National Telecommunications Information Administration (NTIA), a division of the Commerce Department, and the Department of Agriculture's Rural Utilities Service (RUS) are evaluating applications for the second and final wave of the $7.2 billion allocated for broadband projects in last year's economic recovery legislation.
At the time, GOP members of the House Internet subcommittee argued against prioritizing communities deemed "underserved" by broadband providers ahead of unserved areas, a criticism that continues to dog the stimulus initiatives.
"We feel that the NTIA and RUS broadband stimulus programs are not working as well as they could," said Florida's Cliff Stearns, the ranking Republican on the subcommittee. "It appears that some of this money might be going to duplicate access."
Stearns noted letters submitted by cable and telecom associations that highlighted a project in northern Georgia to fund a broadband project where they claimed an incumbent provider, Windstream, already offers high-speed service to the majority of the population. Some lawmakers warned against using federal funding to subsidize competition in areas where residents already have access to broadband service.
Steve Buyer (R-Ind.), who used much of his opening statement to blast Democratic efforts to expand their majority in the Energy and Commerce Committee, called the broadband program a "policy of shame."
NTIA chief Lawrence Strickling vigorously defended his agency's administration of the broadband funding, telling the panel, "It is fundamentally not the case that we are subsidizing competitors here."
Strickling also took aim at the efforts by large cable and telecom firms to pressure the agencies to back away from funding projects in underserved areas, saying that the North Georgia Network Cooperative, which received the inaugural stimulus grant in a high-profile ceremony attended by Vice President Joseph Biden, will serve a large population that Windstream has not connected, and that the region has fallen into economic blight in the absence of pervasive high-speed Internet service.
"I most emphatically disagree with the letters. They are obviously quite self-serving. They don't reflect what's happening on the ground," Strickling said. "Companies have been fleeing that region because of a lack of infrastructure."
Republican objections to funding broadband projects in so-called underserved areas echo one of the principal criticisms of any effort to include a public option in healthcare reform legislation, a scenario that GOP lawmakers say will put the government in direct competition with the private sector. In the case of underserved areas for broadband projects, they warn that the term is too subjective to use as the basis for awarding federal funding, an objection that permeated the markup of the bill last January.
"In the debate we had on the stimulus in here, I would say out of the entire package we had before us we probably spent a third of our time debating the nebulous terms of the broadband roll-out," said Lee Terry (R-Neb.).
Strickling countered that the application guidelines contain a precise definition of the operative terms. A community is deemed underserved if fewer than 50 percent of residents have access to service, fewer than 40 percent subscribe, or if the incumbent offers connections speeds below 3 Mbps. Communities that satisfy any one of those criteria may be considered underserved for the purposes of the stimulus programs.
But while those guidelines are clear enough, determining which communities qualify can be far more controversial, as estimates about broadband penetration can often vary widely, as was the case with the project in north Georgia.
RUS Administrator Jonathan Adelstein tried to assure skeptical Republicans that the applications are subject to a rigorous, multi-stage review that involves extensive field work to arrive at an accurate picture of a community's broadband needs.
"We don't take the word of the incumbent or the word of the applicant," Adelstein said. "We'll actually go out in the field and determine if there's service there."
Terry and other Republicans also took the opportunity of Thursday's hearing to blast the open network obligations that are a condition of the stimulus funding. Under the grant rules, any recipient of stimulus funding for a new broadband build-out must make the infrastructure available for other providers to access. The statute also binds grant recipients to net neutrality obligations.
Those provisions in part led larger telecom and cable operators to decide not to apply for the stimulus funding, Strickling conceded, though he said that other factors were involved.
"I don't remember hearing any carrier telling me it was solely because of the interconnection requirements," he said. "The fact that we require interconnection in our projects is an important one to putting to rest this notion that we are overbuilding or building duplicative facilities."
Strickling and Adelstein said they intend to meet the statutory deadline of Sept. 30 to award all of the $7.2 billion in stimulus money.