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

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

• NARUC Letter to Commerce Secretary Gary Locke, Agriculture Secretary Tom Vilsack, and Acting Commerce Assistant Secretary Anna Gomez, April 2, 2009 (PDF)
• Public Utilities Commission of Ohio Letter to Locke, Vilsack and Gomez, April 1, 2009 (PDF)
• Kansas Corporation Commission Letter to Locke, Vilsack and Gomez, April 2, 2009 (PDF)