February 27, 2013, 2:59 PM — Some Republican lawmakers on Wednesday accused two U.S. agencies of wasting hundreds of millions of dollars in broadband stimulus money on failed projects, but supporters of the broadband spending questioned the Republican numbers.
Some projects that were part of a US$7 billion broadband stimulus program passed by Congress in early 2009 have spent money on equipment they didn't need and other projects overbuilt existing broadband service, said critics of the broadband programs.
The U.S. National Telecommunications and Information Administration (NTIA) and the U.S. Rural Utilities Service (RUS) have suspended or revoked awards to 42 projects, which received $611 million in funding, said Representative Greg Walden, an Oregon Republican and chairman of the House Energy and Commerce Committee's communications subcommittee.
In some cases, the broadband stimulus projects are competing with privately built networks, Walden said during a subcommittee hearing. "Promoting broadband is a laudable goal, but there are many laudable goals in our government," he added. "When the government's borrowing 40 cents on every dollar to fund government services, we cannot afford them all, especially if the private sector is succeeding without government involvement."
In West Virginia, the state used federal funds to purchase "enterprise-grade" routers with support for 200 simultaneous users for small-town libraries, including one housed in a single-wide mobile home in a town of 1,500, Walden said. In Colorado, federal funds paid for a third fiber connection to a school with 11 students, he said.
But subcommittee Democrats and NTIA Administrator Larry Strickling disputed Republican allegations of large amounts of waste in the programs. The NTIA suspended nine projects out of about 220 funded, but four of those projects are back on track after working with the agency and the agency is still working with three others, Strickling said.
The NTIA terminated two projects, but awardees spent only $11 million before the agency shut them down, Strickling said.
That $11 million represented 0.3 percent of the NTIA broadband funding, said Representative Anna Eshoo, a California Democrat. "Let's keep things in context," she said.
Strickling and Walden tangled over West Virginia's spending on high-capacity, $20,000 Cisco Systems routers for small-town libraries. While Walden raised concerns that the state did not use proper procurement procedures, Strickling suggested that a state report on potential cost savings with smaller routers didn't take into account discounts the project received, including 100 free routers.
The actual cost savings would have been minimal and the larger routers give the libraries room for growth in broadband demand, Strickling said.