Agriculture Committee Skeptical on RUS' Ability to Manage Funds

Broadband Stimulus, Broadband's Impact, NTIA July 9th, 2009

, Reporter-Researcher,

WASHINGTON, July 9, 2009 – Members of Congress on Thursday questioned the efficacy of the grant criteria set out last week by the National Telecommunications and Information Administration and Rural Utilities Service. During a hearing before the House Agriculture Subcommittee on Rural Development, Biotechnology, Specialty Crops, and Foreign Agriculture, representatives expressed skepticism over ill-defined criteria in the the joint Notice of Funds Availability the agencies released last week

Mark Seifert,  Senior Advisor to NTIA administrator Lawrence Strickling said the NOFA“set up a fairly stringent system” for determining which areas are most in need, but will be flexible in allowing applications to be made efficiently and give all stakeholders a fair shake.  NTIA and RUS will simultaneously evaluate applications in order that there will be “no lag-time,” he said.

And if an applicant doesn’t meet the criteria for one agency’s program, Seifert said that would not exclude an applicant from the other program if judged more appropriate. The unique process of creating a joint NOFA has allowed NTIA and RUS to “leverage our collective experience,” he said. And RUS Deputy Undersecretary Cheryl Cook said the effort has been a “significant interagency work.”

Cook and RUS assistant administrator David Villano assured the committee — specifically Ranking Member Michael Conaway, R-Texas — that RUS was up to the task of distributing between $7 and $9 billion in loans this year, compared to RUS’ previous budget of $1.2 billion. And while Villano remained confident of RUS’ ability, Conaway sharply reminded him that “every nickel of this stimulus money is borrowed.”

States with existing broadband mapping programs will provide “ample” information for the first round of grants, Seifert said. And mapping projects funded through the stimulus — including a national map to augment state maps — will serve to help NTIA improve grant-making with each of the rounds, he said. “The states have a…critical role in finding out where broadband is and where broadband isn’t,” he explained. After maps are complete, Congress will know “where they need to invest funds.”

But the definition of “rural” will remain a sticking point until RUS clarifies its criteria, said Chairman Michael McIntyre, D-N.C. Areas deemed “remote” can qualify for 100 percent of funding in the form of grants, rather than traditional RUS loans. Currently RUS defines “rural” as an area with less than 20,000 persons in the defined area. But Cook said RUS will soon consider ways to clarify the definition.

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2 Responses to “Agriculture Committee Skeptical on RUS' Ability to Manage Funds”

  1. Brett Tarnutzer Says:

    This program faces some real hurdles given the tight time frame it has to be put in motion. Wisely, the agencies are approaching it in multiple steps with this as the first of 3 NOFAs, but there is the constant push to get ARRA funds allocated quickly. There will be a steep learning curve as there was with the FCC’s auction program and some mistakes will be made, but there is little choice given the mandated time line. This really is the first step in an evolving program but the agencies have to avoid large blunders (think back to the PCS C block financing rules which were designed to help bidders and ultimately tied the spectrum up in litigation) to make sure the money can be efficiently and effectively allocated.

  2. Broadband Stimulus Program | Telecompetitor Says:

    [...] is being critical of the stimulus program to date. Congress’ Agriculture Committee has expressed skepticism of the developing broadband stimulus roadmap. Is all of this criticism due to the current popular trend of ‘piling on the government’ as [...]

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