The House Communications Subcommittee has concerns about overbuilding of ISPs...

referred to a study NCTA released that day that found such overbuilding. Jeffrey Eisenach and Kevin Caves of Navigant Economics studied three Rural Utilities Service awards in Kansas, Minnesota and Montana. The federal money for those projects totaled $231.7 million, 7 percent of the $3.5 billion that RUS got for broadband loans and grants under the 2009 American Recovery and Reinvestment Act. The Broadband Initiatives Program awards process “was fair and open,” an RUS spokesman said. “The projects highlighted in the NCTA study are in rural areas that lacked sufficient broadband for rural economic development, as required by the statute. All were carefully vetted on the ground by RUS field staff, received strong support from the local community, and will vastly increase broadband capacity in their communities.” The economists found that “more than 85 percent of households in the three project areas are already passed by existing cable broadband, DSL, and/or fixed wireless broadband providers,” they said at http://xrl.us/bjofip. “In part because a large proportion of project funds are being used to provide duplicative service, the cost per incremental (unserved) household passed is extremely high,” more than $349,000 for each of the 452 households lacking broadband service, Eisenach and Caves wrote. The cost is more than $30,000 per unserved home, if wireless service is excluded, they said. “We conclude that the RUS Broadband Initiatives Program, as currently structured, is not a cost-effective means of extending broadband coverage to unserved households.” NTCA got in a jibe at NCTA in a statement supporting RUS. The agency’s stimulus funding and regular broadband loan program “are essential to achieving policymakers’ goal of universal broadband availability,” NTCA CEO Shirley Bloomfield said. “Unfortunately, opponents of these programs often gloss over the fact that the community-based telcos have committed to providing broadband in those remote and less populated areas -- despite the exorbitant costs associated -- while the cable companies focus on the more lucrative towns. Rural consumers suffer when providers stand on the sidelines and choose not to provide service in rural areas -- and then criticize the very programs that make it possible."