Broadband Grant Rollout Delayed One Month

The government has received more than 2,200 applications for the $7.2 billion in broadband loans and grants provided by the stimulus package, but that demand will delay the first round of funding for another month, officials told a Senate committee Tuesday.

At this point, project proposals have come from all 50 states, five territories, and the District of Columbia. They request nearly $28 billion in funding, a number that jumps to $38 billion when considering the $10.5 billion in matching funds from applicants, according to Larry Strickling, administrator for the National Telecommunications and Information Administration (NTIA).

Many applications, particularly for infrastructure projects, have been very complex, Strickling said. As a result, the department will expand its review period and award its first grant in mid-December, about a month later than originally planned.

The first of three rounds of funding, meanwhile, is now scheduled to be completed in February 2010 rather than at the end of this year, Strickling told the Senate Commerce Committee.

The stimulus package passed earlier this year included $7.2 billion for broadband grants. The funds are split between the Department of Agriculture's Rural Utilities Service – which gets $2.5 billion – and NTIA within the Commerce Department, which gets $4.7 billion.

An additional $350 million was set aside for a broadband inventory map. At this point, NTIA has allocated $14 million to seven states and D.C. to fund mapping activities, Strickling said. These states – Indiana, North Carolina, West Virginia, Arkansas, Vermont, California, and New York – must use the money to collect and verify the availability, speed, and location of broadband in their states.

Sen. Kay Bailey Hutchison, a Texas Republican, expressed concern that this map is not due to be completed until February 2011 – well after the first grant is handed out.

"We have the mapping that is required to see where the real priorities are … and yet the funding has to start before the mapping is finished," Hutchison said. "I'm concerned that we're not going to be using the right priorities for the taxpayer dollars."

Strickling acknowledged that his job would be "simpler" if NTIA already had access to the completed broadband map, but said that the agency has other resources in the interim.

Applicants, for example, are required to provide as much information about their potential coverage area as possible. NTIA has also asked states to provide input on what regions they would consider priority areas. Service providers, meanwhile, have been asked to submit comments by this week about subscriber numbers and broadband availability in their coverage areas.

"I think we have a pretty good picture," Strickling said.

Hutchison also expressed concern that applications are first reviewed by a team of volunteers. Strickling said that all volunteers – about 1,100 in total – have expertise in the broadband field. The current team includes former telecom executives and academics, and up to 300 applicants were rejected for not having the right qualifications, he said.

"Their role is a first-round screener," he said. After that, a team at NTIA does a "top-to-bottom scrub. Our mission is to make sure we don't fund any bad applications."

There was also much discussion about definitions, particularly the difference between a rural and remote area. The funding notice defines a "rural area" as one with a population less than 20,000 people or an urbanized area not adjacent to a city or town with a population greater than 50,000. A "remote" area, meanwhile, is one that is 50 miles or more from a non-rural area.

Democratic Sens. John Kerry of Massachusetts and John Rockefeller of West Virginia took umbrage at the definition of remote. Both said that portions of their states would definitely be described as "remote" but were not necessarily 50 miles from a city.

Jonathan Adelstein, a former FCC commissioner and new administrator of RUS, said his agency would "completely revisit" the definition during the second round of funding. RUS is looking at other factors besides remoteness, like density and income, he said.

The goal is to provide loans to areas that are relatively easy to reach and provide grants to the more far-flung, "remote" areas, Adelstein said.

Sen. Claire McCaskill, a Missouri Democrat, was annoyed that RUS even took the time to define "remote" after Congress had already done it in the Farm Bill. She also urged RUS to fund projects that will actually help communities in need instead of just blindly following arbitrary metrics.

"I just don't want federal money competing with people who have made investments without that federal money. I don't think it's fair to those companies and I know how many communities there are in my state that are not going to get help under this [rulemaking] because they happen to be within 50 miles of a community," she said.

McCaskill pointed to Albany, Mo., a town of 1,900 that is about 50 miles from the city of St. Joseph, which has about 76,000 residents. Albany has a 25 percent unemployment rate, but its proximity to St. Joseph would make it ineligible as a "remote area."