Energy and Commerce Committee Leaders Continue Examination of $7 Billion Broadband Stimulus Programs

March 13, 2013

WASHINGTON, DC – As part of the ongoing effort to protect taxpayer dollars, Republican leaders of the House Energy and Commerce Committee today continued their examination of the president’s broadband stimulus programs, requesting information from both the Rural Utilities Service (RUS) and Government Accountability Office (GAO) regarding RUS’s Broadband Initiatives Program (BIP). The Subcommittee on Communications and Technology, chaired by Rep. Greg Walden (R-OR), recently held its fourth hearing looking into the president’s broadband stimulus programs, including the BIP and the Broadband Technology Opportunities Program (BTOP) administered by the National Telecommunications and Information Administration (NTIA), which received a combined $7.2 billion as part of the American Recovery and Reinvestment Act (ARRA). In particular, committee leaders are looking into a loan/grant combination given to Lake County, Minnesota, that may have skirted BIP eligibility requirements and placed taxpayer dollars at risk.

In a letter to RUS Acting Administrator John Padalino, the members requested information regarding the agency’s management and oversight of the BIP program, particularly its review process for awarding $66.4 million in grants and loans to Lake County. Members expressed concern that the Lake County project may be overbuilding areas already served by existing broadband providers, instead of expanding access to underserved or unserved areas, as required by ARRA.

The leaders wrote, “While the committee recognizes the importance of expanding broadband access to rural areas of the country, we are concerned with suggestions that the BIP program may have been used to overbuild existing systems rather than extend service to areas that legitimately meet the underserved/unserved eligibility requirements. Materials reviewed by committee staff also raise questions as to whether RUS adequately considered the financial viability of the Lake County project before committing $66.4 million in government funding.”

Additionally, committee leaders requested GAO examine all of the loans and grants distributed through the BIP program. The members wrote, “As we seek to expand the deployment of broadband infrastructure in a constrained budget environment, the overbuilding of existing broadband networks using federal dollars represents a significant concern. As GAO and others have reported, access to broadband service can improve economic growth and quality-of-life. Yet, overbuilding diverts scarce budget resources from areas without broadband service to areas with service and can impede vital private-sector investment. Given the need to ensure the most efficient and effective use of federal dollars and guard against waste, fraud, and abuse, we ask that GAO conduct an in-depth analysis of work already completed under BIP.”

Read the letters to RUS and GAO here.