SAY WHAT??? Despite Mounting Evidence, Obama Administration Denies Broadband Stimulus Waste

February 27, 2013

WASHINGTON, DC – The Communications and Technology Subcommittee, chaired by Rep. Greg Walden (R-OR), today held a hearing to examine reports of waste and misuse in the Obama administration’s $7 billion broadband stimulus program. Although the administration widely proclaimed its 2009 stimulus program would create “shovel ready” projects, four years later, only 60 percent of the broadband funds have been put to use. In addition, there have been numerous allegations of waste and overbuilding.

During the hearing, Chairman Walden focused on a project recently flagged by the Department of Commerce Inspector General and the West Virginia Legislative Auditor. Both concluded that a widely-reported $126.3 million BTOP grant awarded to West Virginia resulted in overspending and waste and that no capacity or needs assessment had been done beforehand. Despite the non-partisan analysis by federal and state watchdogs, Larry Strickling, Assistant Secretary at the National Telecommunications and Information Administration, maintained, “there is no real showing of wasted dollars.”

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Members also examined incidences of overbuilding. The law’s purported purpose was to provide broadband access to consumers in unserved areas. However, as reported by the New York Times, “local phone companies have complained about waste or unfair competition, like using some of the grants to build fiber networks where they already exist….” One example receiving national attention recently is the $100 million grant the NTIA awarded to EagleNet in Colorado. Pete Kirchhof, Executive Vice President of the Colorado Telecommunications Association, testified, “First and foremost, federal agencies should insure that taxpayer dollars are not used to duplicate infrastructure development in rural communities.”

Meanwhile, Chairman Emeritus Joe Barton (R-TX) questioned the necessity of the $7 billion program. Barton said, “When 220 million Americans have access to broadband in their homes and on their iPhones and iPads, 96 percent of the country has access in some shape, form or fashion, it really calls into question why we need the program. It’s not that it’s a bad program. It’s not that it’s even a wasteful program. But is it a necessary program when this weekend we’re going to have sequestration kick in and it’s going to cut $85 billion and if you believe President Obama the sky is falling?”

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