House GOP Blames NTIA for Misuse of Broadband Stimulus Funds

The characteristically reserved Chairman Greg Walden, R-Ore., launched into a heated debate with Strickling about whether taxpayer funds were wasted in the agency’s Broadband Technology Opportunities Program (BTOP) grant to the state of West Virginia. Walden questioned why high-powered Internet routers designed to serve large corporations, universities and medical centers were installed in small libraries, elementary schools and health clinics (CD May 10 p11). “We're talking millions and millions of dollars being wasted here that we don’t have that I expect you to go after,” Walden bellowed. “You're happy with the outcome in West Virginia … is that correct? You believe that what they did is an accurate and good use of taxpayer money?"

Strickling defended West Virginia’s purchase of the “future-proof” routers which were sold at a discounted price: “There is no real showing of wasted dollars and expenditures there.” He said Cisco offered the state 100 free routers and a reduced purchase price which made the deal more economical than buying routers with lower capabilities. “It is not at all clear from the reports that what West Virginia did was unreasonable,” said Strickling. “We are confusing cost with capability,” he said.

Walden illustrated his inquiry with a photograph of a small, West Virginia library housed in a trailer that allegedly received a Cisco enterprise router meant for enterprise-scale capabilities. “Mr. Strickling, with all due respect, this public library is open Thursdays, Fridays and Saturdays in a single wide trailer with one Internet connection. You really think that’s going to build out where they have the need for a couple hundred Internet connection router in a community of fifteen hundred?” Strickling noted that the community has plans to build out a 5,500 square feet library to replace its temporary facilities shown in Walden’s photograph. Subcommittee Ranking Member Anna Eshoo, D-Calif,. acknowledged that Walden’s photograph of the “shed doesn’t look good,” but said the state would “shortchange” itself if it didn’t consider the future demand for increased broadband capacity.

Rep. Cory Gardner, R-Colo., said “something has gone dramatically wrong” with Colorado’s EAGLE-Net Alliance, which he accused of overbuilding services in the eastern regions of the state while ignoring western communities. The recipient of a $100.6 million broadband stimulus grant, part of NTIA’s BTOP, faced accusations of overbuilding mid-last year from smaller telcos (CD Sept 27 p6), a charge a CenturyLink executive repeated (CD Dec 26 p8). “Why do we have so much overbuild in Colorado, $100 million at a time when this government is trying to scrape money together?” he asked witnesses. Gardner specifically asked Strickling whether he thought overbuilding of broadband services was occurring in Colorado. “Well, it depends on what you mean by overbuilding,” said Strickling. Gardner clarified: “Has EAGLE-Net in Colorado put fiber in the ground where existing fiber exists?” Strickling responded affirmatively but was then cut off by Gardner before he had an opportunity to explain his response.

Gardner illustrated how EAGLE-Net deployed a broadband communications facility at an 11-student elementary school in Agate, Colo., which was already served by two other broadband providers funded with federal money. Gardner said 96 percent of the program’s total federal grant dollars are “tied up” and yet only 25 percent of Colorado’s educational institutions have been served by it. “Why did NTIA take so long to suspend the grant?” he asked Strickling. Strickling said the federal government’s suspension of EAGLE-Net’s project in early December was due to environmental assessments stemming from the alliance’s decision to switch from the deployment of microwave services to fiber broadband services (CD Dec 10 p6).

Strickling acknowledged that financing is a now a concern for EAGLE-Net but declined to say whether he thought the alliance had wasted federal dollars. “What we know is that the process that has been used has gotten us to a result where we have people complaining about the project. We have been working to resolve the complaints,” said Strickling, who met with EAGLE-Net officials and stakeholders when in Colorado recently. Rep. Diana DeGette, D-Colo., offered an olive branch to sit down with Gardner, EAGLE-Net and any other interested parties to “see if we can make peace in Colorado. I think that would be a win-win situation for everyone.”

Rep. Mike Doyle, D-Pa., said he was “not happy with the direction” the hearing had taken and defended the work of NTIA and RUS to expand the nation’s broadband access. “Is this program perfect? Of course it isn’t perfect,” he said. “If you want to criticize or ask questions about West Virginia or Colorado you have every right to do so and I support that. What you don’t have the right to do is to imply that this program in its totality is a waste of government money and hasn’t met its mission.”

"This reminds me an awful lot of the Solyndra hearings,” Rep. Mike Pompeo, R-Kan., said in reference to the 2011 House Commerce Committee inquiry of the California-based solar manufacturer that received government loans. “We had enormous amounts of federal money being rushed out the door under tight deadlines and constraints … and you were given a task that was darn near impossible. You have not succeeded,” he said. “The challenge is … you have no incentive to get it right because you don’t have your own personal skin in the game. You have no risk. You have taxpayers’ money making arbitrary decisions,” he said.