Federal rural broadband stimulus program slammed

by Steve Blum • , , ,

Not much to show for $3 billion.

The federal agriculture department’s Rural Utilities Service is broken, according to a long and well researched article by Tony Romm in Politico. Given $3 billion in stimulus money by the 2009 American Recovery and Reinvestment Act, RUS approved broadband infrastructure builds that couldn’t or wouldn’t be completed – about half of the 300 or so approved projects are still works in progress, and 42 of those never got started at all. With a drop dead date of 30 September 2015 to finish the work, the agency is on the verge of leaving nearly $300 million unspent, and an unknown, but likely even greater, amount wasted.

The article describes how RUS lost the plot as the number of home benefiting from the program rapidly dwindled

RUS can’t tell which residents its stimulus dollars served. In May, the agency reported it has delivered new or improved services to 213,000 households and more than 15,000 businesses. But RUS, as it collected that data from awardees, never asked whether those residents live in unserved, neglected rural towns, or areas that had some broadband access before the Recovery Act….

Either way, it’s a far cry from [agency head Jonathan] Adelstein’s original prediction that RUS funding would benefit more than 7 million people in rural America….

For years, though, RUS quietly and steadily lowered its estimates. Its latest prediction, made in March 2014, is that it will benefit 728,000 homes within five years. In May, however, the agency stopped putting that number in writing.

It’s frustrating to see money intended for rural broadband projects go to those most adept at milking federal money, rather than to projects with the best business case. RUS is proposing to make relatively minor changes to its current broadband subsidy program and is accepting comments. It might be futile, but it’s time to suggest a major overhaul instead.