USDA Revives Broadband Loans, Promises New Rules to Prevent Waste
The U.S. Department of Agriculture revived its broadband loan program, with new interim rules that department officials said will eliminate the kind of waste cited by the USDA’s inspector general last month. Congress is still debating the budget and a federal government shutdown looms, but Agriculture Secretary Tom Vilsack said in a conference call with reporters Thursday that “hundreds of millions of dollars” in unspent funds have been left over from the original broadband loan program that was first authorized in 2002. A government official told us that anywhere from $446 million to $700 million could be available. “Obviously we're keeping an eye on Congress relative to the flexibility they'll give us on the budget,” Vilsack told reporters.
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"We were very busy in the first two years of the stimulus program implementing the stimulus projects,” said, explaining how so much money could accumulate in the broadband loan program. “The reasons why these resources had not been expended was because we had some real challenges in working with the Commerce Department” on the Obama administration’s broadband stimulus projects, he said. “We also had to craft rules” to comply with the 2008 farm bill, which narrowed criteria for the loans, Vilsack said. Despite the disruption caused by the stimulus, Agriculture officials said in a separate report Thursday that the recovery funds had improved broadband service for some 7 million rural Americans.
Vilsack said he hoped rural telcos would get involved quickly in the program. “We're encouraging folks to apply for these funds right away,” he said. Last month, USDA Inspector General Phyllis Fong told Congress that her office had found some $340 million in “questionable” loans under the program. Loans were approved without complete applications, several lenders later defaulted and grants “were used for inappropriate purposes,” Fong said. Auditors also discovered that up to two-thirds of the loans went to areas where broadband service was already available, Fong said.
Thursday’s interim rules define “rural” areas as Census tracts with less 20,000 people or fewer or “an urbanized area contiguous and adjacent to a city or town that has a population” of 50,000 or fewer. Thursday’s rules will also give top priority to areas where there are no broadband providers, Vilsack said. Meanwhile, the department is seeking comment on its interim rules. “We'll use these regulations to perfect the program later,” Vilsack said.
Testifying before the Senate Appropriations subcommittee later Thursday, Vilsack said the department is trying to walk a fine line. “We recognize the responsibility to reduce our budget,” he told the Senate panel, but “we also have to grow the economy.”
Rural Telecom Group Executive Director Tanya Sullivan said that she wasn’t sure the reformed broadband program would help her group’s telcos without FCC mandates for data roaming, network interoperability and access to mobile handsets. “Otherwise, these mobile broadband networks will become islands onto themselves, which means rural consumers will not have connectivity to the rest of the nation when they travel outside their rural area,” Sullivan said. “In addition, these rural mobile broadband networks should be accessible to urban consumers who travel through and to rural areas.”