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Frederick Butler

NARUC Ratchets Up Call for State Involvement in Disbursement of Broadband Stimulus Funds

in Broadband Stimulus/NTIA/NTIA Comments by

WASHINGTON, April 2, 2009 – The National Association of Regulatory Utility Commissioners on Thursday ratcheted up their call for greater state involvement in disbursement and use of the $7.2 billion broadband stimulus funds with a letter to top Commerce and Agriculture Department officials.

NARUC’s positions on the way Commerce’s National Telecommunications and Information Administration and USDA’s Rural Utilities Service should approach broadband grants were detailed in the letter, signed by 87 state utility commissioners representing 38 States.

“Both agencies face incredible challenges,” read the letter, which was signed by Frederick Butler, president of NARUC and Commissioner of the New Jersey Board of Public Utilities, and the other commissioners.

“NTIA has limited staff and must focus on the [digital television] transition during the most critical period for disbursements. RUS staff is fully occupied disbursing funds from previously authorized programs. Neither can possibly complete the tasks assigned under [fiscal stimulus legislation] without a very significant staff expansion,” the commissioners wrote.

They continued: “Even then, given the incredibly compressed timeframe, it will be almost impossible to review the anticipated thousands of applications most predict both will receive, much less rank the proposals according to American Recovery and Reinvestment Act-specified criteria, disburse the funds, and monitor grant specific implementations.”

The commissioners said both Congress and the Government Accountability Office (GAO) had in effect recognized the invaluable role of states, because the latter have “an intimate knowledge of their communications environment, geography and demographics along with every incentive to make certain the money is not wasted and is properly targeted.”

“Rather than contracting with Washington, D.C., consultants that lack both the states’ in-depth knowledge about the areas covered and inherent incentive to do the job right, both agencies should structure the program to insure state involvement,” the letter said.

As an incentive for states to participate in the screening process, NARUC said NTIA and RUS should establish, for the first round of funding, a “use or lose” minimum standard allocation for each state.

Under this approach, states would have the opportunity, assuming enough qualified proposals were submitted, to assure up to that allocation is disbursed in-state, in addition to federal agencies making minimal funding available to allow short term hires to assist State experts in screening applications and in monitoring grant implementation.

The commissioners said: “The advantages to this approach are obvious. It saves resources, puts the people with the information needed to make reasonable and rapid decisions in a strong advisory role, provides an additional layer of accountability, and significantly increases the chances that the money will actually get disbursed as States will have proper incentives to both opt-in and complete the task.”

NARUC General Counsel Brad Ramsay acknowledged that the state regulators’ proposals might not be “a perfect solution,” although it was necessary.

“If this money is to be spent wisely, states will have to be involved. Congress has been very specific in making this smart call,” he said.

Ramsey said the fiscal stimulus bill’s legislative history points to a role or states that could be identified as being both “monitoring and evaluation” of grant applications.

No insider Washington experience and any special intelligence would be necessary to grasp that, he said.

“We are talking about an impossible task that must be accomplished in a very short while – 18 months. It is akin to asking the federal government to do in a minute a 48-hour job. I do not see a better way than to involve states. This is extremely good advice,” he said.

Ohio and Kansas have also released letters which endorse key aspects of the NARUC proposals.

Broadband Breakfast Club

Don’t miss the opportunity to register for the April 14, 2009, Broadband Breakfast Club at the Old Ebbitt Grill. The theme of the April meeting will be, “Spending the Stimulus: Can States’ Front-line Experiences Expedite Broadband Deployment?” Register at http://broadbandbreakfast.eventbrite.com.

Confirmed speakers include Karen Jackson, Office of Telework Promotion and Broadband Assistance, Commonwealth of Virginia; Betty Ann Kane, Chairman, D.C. Public Service Commission; and Sue A. Suleski, Technology Investment Specialist and Program Manager for the Pennsylvania Broadband Initiative.

Broadband Census Resources

States Seek Best Strategies on Obtaining Broadband Stimulus Funds Close-to-Home

in Broadband Stimulus/NTIA by

WASHINGTON, March 16, 2009 – As the Obama administration on Monday begins poring over the nitty-gritty details about how they will be spending $7.2 billion in broadband stimulus funds, individual states are grappling to find their own best strategies to tap the funds.

At the public meeting on March 10, officials at the Commerce Department’s National Telecommunications and Information Administration made clear that the broadband grants – unlike the past several decades’ trend toward “block grants” – will not be channeled through states.

Rather, with the exception that at least one grant be awarded within each state, the NTIA’s broadband grants will up for grabs by the most qualified applicant.

But that hasn’t discouraged representatives from states and state groups.

In fact, many are quite pleased with the way the broadband stimulus program is taking shape, and are eager to have their voice heard in the next phase of the broadband stimulus process.

Among their grounds for optimism:

  • States and their political subdivisions are themselves eligible to receive grants through the various broadband programs of the NTIA and the Agriculture Department’s Rural Utilities Service.
  • States have the on-the-ground knowledge about particular communications needs that positions them to play the kind of coordinative and facilitative role that will be necessarily in an expedited process of broadband expenditures.
  • States’ engagement with economic development officials allows them to work collaboratively with both public- and private-sector partners.
  • States have been among the principal players in the attempts to map out broadband deployment.
  • States have filled what many regard as a leadership void in the field of broadband policy over the past several years.

Almost immediately following the March 10 public meeting, for example, broadband officials in the state of Illinois held in a conference call to consider statewide strategies to tap into federal dollars.

Prior to assuming the governorship, Illinois Gov. Pat Quinn had assumed the cause of broadband, saying that “We have to be the modern-day, 21st century Johnny Appleseeds, planting good technology projects all over the state.” He did so as part of the state’s Broadband Deployment Council.

Massachusetts, another state leading the broadband drive, announced that it, too, would hold a conference call on Thursday, March 19th, from Noon to 1:00 p.m., to discuss broadband stimulus in Massachusetts.

The conference call is being organized by the Massachusetts Broadband Initiative, a non-profit with $40 million in state funds seeking to ensure universal broadband within the state.

That next phase of the broadband stimulus debate begins on March 16 with a six-day series of public meetings of the NTIA and RUS. Meetings on March 16, March 19, March 23 and March 24 will be in Washington. The meeting on March 17 will be in Las Vegas, and March 18 will be in Flagstaff, Ariz.

These state actors believe that states are poised to play an important and influential role in the process.
“The states bring a good deal to the table” when it comes to broadband policy, said Indiana Utility Regulatory Commissioner Larry Landis. “This is going to be a huge undertaking for NTIA, and the states can help them get up to speed relatively quickly.”

Landis, co-chair of a joint board proposing broadband actions by both state regulators and the Federal Communications Commission of the NARUC, points to the way that states stepped in over the past several years to fill a perceived void in federal policy-making with respect to broadband. At least 39 states have taken some steps toward creating statewide broadband policies and better access, he said.

In addition to Massachusetts and Illinois, California conducted a detailed census of broadband availability and speeds, which it released in January 2008. Over the past 18 months, Virginia directed money from a tobacco lawsuit settlement to provide the best-quality broadband possible to its rural industrial parks. And the Minnesota legislature, in passing its broadband legislation last summer, toyed with the notion of requiring broadband on the order of 1 Gigabit per second, or more than three orders of magnitude higher than what currently passes for “broadband” under the FCC’s definition.

BroadbandCensus.com has been profiling the state of broadband, and of broadband, within each state at http://broadbandcensus.com/blog/2008/09/broadband-census-in-the-states/.

Several state-level officials – including D.C. Public Service Commission Chairman Betty Ann Kane, New York State Public Service Commissioner Maureen Harrison, and National Association of Regulatory Utility Commissioners President Frederick Butler – will be featured during the NTIA/RUS events.

Chairman Kane, for example, is a featured speaker at Monday’s first panel, a panel of private sector eligibility. Kane has been working with the NARUC/FCC joint board on broadband, and has been focusing on creating a web site in which the efforts of the states may be showcased and coordinated. Butler and Harrison are scheduled for subsequent meetings.

Kane is also a confirmed panelist at BroadbandCensus.com’s Broadband Breakfast Club event on Tuesday, April 14, from 8 a.m. to 10 a.m., at the Old Ebbitt Grill. Registration for the event is available at http://broadbandbreakfast.eventbrite.com.

In the lead-up to Congress’ passage of the federal stimulus legislation on February 13, states were actively lobbying on the issue. “States have intimate knowledge of the communications environment, geography, and demographics within their boundaries,” said Butler, president of the National Association of Regulatory Utility Commissions.

Further, said Butler, “states can assure efficient utilization and targeting of stimulus monies and states have every incentive to make certain the money is not wasted.” Of particular concern to Butler was that “early adopter states should not be penalized,” according to a NARUC policy statement.

In other words, a state like Massachusetts shouldn’t become ineligible to recoup broadband funds spent out of its own treasury prior to the enactment of broadband stimulus legislation.

Massachusetts and a group of six other states made similar points in their own position paper, “Broadband Investment for Economic Recovery: Perspectives of an Ad-Hoc Group of State Broadband Entities,” (PDF) submitted to the administration and to Congress on February 9.

The states, including Arizona, Georgia, Maine, New York, North Carolina and South Carolina, called themselves “a small sample of the many states that are well positioned to make quick use of federal monies to partner in the effort to build out much needed broadband infrastructure.”

They argued for the full $7 billion in funding, for ensuring that the bulk of funding was made available through grants and not through loans, and that in-kind contributions by states be allowed to meet the 20 percent matching requirement called for the stimulus law.

Editor’s Note

4/2 – The preceeding story has corrected to the name of the President of the National Association of Regulatory Utility Commissioners. It is Frederick Butler.

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