Advocates Seek Accountability in Expenditure of Broadband Stimulus Funds

News | NTIA-RUS Forum | Day 6, Session 1

WASHINGTON, March 24, 2009 – At the final day of a six-day public forum about the federal government’s $7.2 billion broadband stimulus funding on Tuesday morning, the discussion made a sharp turn toward a focus on oversight and post-award compliance.

The forums, sponsored by the Commerce Department’s National Technology and Information Administration and the Agriculture Department’s Rural Utilities Service, addressed the parameters of the program being put in place at the two agencies because of the American Recovery and Reinvestment Act, the fiscal stimulus package.

Beth McConnell, executive director of the Media and Democracy Coalition, a coalition of public interest media advocacy groups in the states and in Washington, said there was need to “ensure grantees are accountable to the congressional intent in the Recovery Act” and that “grantees are complying with the rules and agreements.”

“To address both, we need clear and concrete objectives in grant contracts, strong rules to hold them to, and good data to evaluate,” she said. Companies should not be able to evade these conditions by selling their contracts, she said.

Additionally, said McConnell, all funded projects should contain a component that will measurably increase adoption. She also said that the NTIA and RUS “should require that all grantees report their network management practices.”

She also said both NTIA and RUS should require that grantees report the actual speeds delivered, prices paid by customers, and adoption of services.

McConnell also said that funds should not be awarded to any entity that purports to map broadband services yet withhold critical information. Instead, agencies should consider grantee reporting a critical opportunity to gather data to inform broadband data-collection and mapping, and that consideration should be given to robust post-grant assessment of the impact of projects.

Eli Noam, director, Columbia Institute for Tele-Information and professor of finance and economics at Columbia University’s business school, said the selection process must be rigorous, with classification of the applications into four baskets: rural, metropolitan, community development and innovation baskets.

“Each of these baskets will have somewhat different criteria,” said Noam. “Within each basket, projects would be graded and ranked. The rural basket should be evaluated jointly by NTIA and RUS. All baskets should be evaluated in parallel by their state Public Utility Commissions or internet boards,” he said.

Noam also called for thresholds to govern operational viability and speeds in the market, before applications could be evaluated on network efficiency and employment effect.

Selection criteria for performance, he said, “must be clear rather than fuzzy, because otherwise the monitoring will be fuzzy, and the accountability will be fuzzy.”

Transparency, independent performance evaluation and government accountability will be helpful too, he said.

Amina Fazlullah, counsel for Media and Telecommunications Reform at the U.S. Public Interest Research Group, asked that oversight be tailored for each program objective, with clear deliverables for grantees set at the beginning.

All participants, she said, should participate in oversight –  not just grantees. Interventions in the event of failures should be made early.

She also called for regional, quarterly, press briefings “to give the public information on grantee programs.”

Sunne Wright McPeak, president and CEO of California Emerging Technology Fund, called for the establishment of a framework and process before awards are made. She said there should be an agreement governing deliverables and outcomes beforehand.

Baselines should be established to guide supply, redeployment, demand and adoption across states.

She said immediate outcomes should be seen in jobs created and people connected, while long-term outcomes should be seen in an increase in deployment and adoption of broadband technology.

Chris Murray, senior counsel at Consumers Union, said judgment of the oversight process should be based on how many homes are served, what speeds are used up and down, and at what cost for the consumer.

He said the NTIA must be able to provide clear answers to the questions:

• Who is the recipient of the grant?
• What is the purpose of the grant?
• What is the grant spent on (including specific equipment)?
• What is the impact?

John Bunting, a Broadband Technology Opportunities Program Audit Manager in the Commerce Department’s Office of Inspector General, said his office would deploy dedicated staff, initiate targeted risk-based audit and expedited reporting, participate in departmental committee and working groups, and embark on fraud awareness training as well as timely response to citizen complaints.

Members of the public in attendance expressed concern over the need for rigorous compliance, comprehensive vetting prior to and during projects, clarification of performance criteria and generosity to all applicants, and an examination of financial capability before grant awards.

There was also concern for public life, health and property; the need for independent engineers at every stage; state-based solutions to existing and emerging needs as well as the need to increase resources for deployment in some parts of the country.