Broadband Stimulus Grants Delayed

Facing a flood of applications for the first pool of stimulus money allocated for broadband projects, officials from the agencies administering the programs told a Senate panel today that the first grants and loans won’t be issued until mid-December, about a month later than they had initially planned.

“We’re going to take a few more weeks here to make sure we get this right,” Lawrence Strickling, the assistant secretary of commerce for communications and information, told members of the Senate Commerce Committee at an oversight hearing on the broadband stimulus programs.

That delay will also push back the agencies’ goal for awarding all of the first tranche, or portion, of stimulus money until February. They had originally aimed to make all the awards by the end of this year.

The February economic stimulus package funneled $7.2 billion for broadband projects. The lion’s share was earmarked for network deployments, but the bill also set aside funding for programs to spur adoption and to develop maps of broadband service throughout the country.

To date, the agencies have awarded $14 million for mapping programs in seven states and the District of Columbia.

Strickling said he excepted to announce more recipients of mapping grants next week, and that his agency would continue to make awards on a rolling basis.

The agency Strickling administers, the National Telecommunications and Information Administration (NTIA), jointly announced the guidelines for the first wave of funding in July with the Rural Utilities Service (RUS), a division of the Department of Agriculture. Over the nearly two-month application window, the agencies received more than 2,200 proposals seeking nearly $28 billion in funding, seven times the amount that was made available in the first tranche.

Scheduling, staffing and data challenges

Mark Goldstein, the director of physical infrastructure issues at the Government Accountability Office, told the Senate panel that he was concerned that the agencies “face scheduling, staffing and data challenges in evaluating applications and awarding funds.”

Given the “compressed schedule” of the grant and loan process, Goldstein said he was worried “the agencies may risk awarding funds to projects that are not sustainable or do not meet the priorities of the Recovery Act.”

Strickling and RUS Administrator Jonathan Adelstein assured the senators that they were working closely together and subjecting each application to rigorous scrutiny.

“Our mission is to make sure we don’t fund any bad applications,” Strickling said.

NTIA has enlisted hundreds of volunteer experts to help with its review process. After a three-person evaluation team okays an application, it moves on to the due-diligence stage, where it is reviewed by agency staffers and outside consultants from Booz Allen Hamilton.

The senators variously expressed concerns about insufficient oversight of the program — particularly in the years following the dispersal of the grants and loans — as well as the apparent redundancy of pairing two agencies to work on the same objective and the pace at which the money is to roll out.

“I’m a little concerned that money that’s supposed to stimulate the economy is not out there turning dirt and stimulating the economy,” said Florida Republican George LeMieux.

Strickling and Adelstein answered each in turn, assuring the senators that they were steering clear of turf wars, and proceeding with a sense of urgency while taking pains to weed out bad applications.

“We certainly are trying to move as quickly as possible,” Adelstein told LeMieux. “I share your frustration about how long it takes.”

Defining rural and remote

The first tranche of funding focuses heavily on projects to bring broadband to rural areas, but several senators objected to the guidelines’ definition of the term “remote.” Under the RUS’ Broadband Improvement Program, only areas designated as remote — defined as at least 50 miles from an urban center — would qualify for 100 percent grants.

The senators objected that that seemed an arbitrary cut-off that excluded many rugged areas in their states where private broadband providers had avoided because they didn’t seem commercially viable.

Adelstein admitted that the definition of the term had raised concerns among prospective applicants, who made the case that RUS should weigh other factors, such as population density, income level or geographic barriers, such as a mountain range.

“We’ve heard a lot of concern about the definition of remote, and we’re going to revisit that in the next NOFA,” Adelstein said, adding that RUS is “completely open” to changing the definition in the next notice of funding availability. “We are looking at other ways to evaluate this.”

By statute, the agencies are required to award all of the $7.2 billion by Sept. 30, 2010.

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