Lawmakers Scrutinize Broadband Deployment Inefficiencies, Overbuilding

Walden asked Strickling to explain recent allegations in West Virginia that some high-powered Internet routers designed to serve large corporations, universities and medical centers were installed in small libraries, elementary schools and health clinics instead (CD May 10 p11). “The state bought 1,000 enterprise routers and installed them in local libraries,” he said. “Each router cost $22,000. What is NTIA doing about this $22 million of NTIA dollars?”

"Don’t believe everything you read in the newspaper,” Strickling told Walden. First, the routers cost $12,000 and were purchased because of package discounts the state was offered and efficiencies related to maintenance training, he said. “The state made an economical decision,” he said. Rep. John Shimkus, R-Ill., told Strickling “your response to the West Virginia story is really bad … as much as you try, you cannot defend what is going on."

Eshoo said NTIA made the “correct action to protect taxpayer dollars” when it partially suspended seven public safety grants (CD May 14 p10), following the passage of the Middle Class Tax Relief and Job Creation Act. The law created FirstNet, a nationwide public safety broadband network based on a single nationwide architecture. “By going a little slower now, NTIA is making sure we achieve the nationwide interoperable network we should all want. The short delay is prudent,” Waxman said. “But it should not become a prolonged slowdown.” Strickling will reevaluate the grants after the FCC establishes FirstNet interoperability standards, he told lawmakers. “I want to avoid a situation where choices that are being made by individual communities could upset FirstNet’s model for a public-private partnership."

Strickling boasted of the positive effects of the broadband grants, including the building or improvement of 56,000 miles of broadband infrastructure to support at least 100 colleges and 600 rural healthcare facilities. “All of our projects are scheduled for completion in three years with the exception of the suspended public safety awards,” Strickling said. “I will not entertain requests for extensions."

Witnesses at the hearing also fielded questions from lawmakers about a loan and grant funding a fiber network in Lake County, Minn., that Mediacom and the state’s cable association have raised concerns over (CD May 7 p1). David Gray, U.S. Agriculture Department deputy inspector general, said his office found no evidence to support allegations that Lake County’s loan and grant applications contained misrepresentations. “We did not find that to be the case in our preliminary inquiry,” Gray said. His office then referred the matter to Rural Utilities Service, he said. “I believe RUS got back to us in January of this year and they in turn found no substance to the allegations, and found that the application was proper and appropriate."

RUS Administrator Jonathan Adelstein, taking questions from Rep. Cliff Stearns, R.-Fla., said the government will seek full repayment of the loan to Lake County in event of a default, despite a report in Communications Daily in which an attorney for Mediacom discussed meeting with county officials who had claimed to have assurances the government would not seek full repayment. “I don’t know who said that, I've tried to track that down,” Adelstein said. “There’s no evidence that actually happened,” he said. Such assurances would be against the law, Adelstein said. “We have a requirement under the Credit Reform Act to aggressively seek collection of any defaults on debts,” he said. “I can’t imagine why anyone would say such a thing. Maybe there was a misunderstanding somebody mischaracterized something that was said."

Mediacom was glad to hear Adelstein’s answer, said Vice President Tom Larsen. “If that wasn’t the case, the entire RUS portfolio wouldn’t be in serious trouble.” But he said it was interesting that the same month that Gray testified RUS had told it found no misrepresentations in Lake County’s loan material, it was querying the county via emails about its authority to operate a telephone switch. “If you certify in the application that you have the authority to do something, and then RUS tells you don’t,” that seems like a misrepresentation, Larsen said. Officials for the county and Lake Communications -- the contractor running the fiber project -- did not immediately respond to our query.

Rep. Adam Kinzinger, R-Ill., suggested that the government streamline its broadband programs, to prevent overbuilding and duplicative efforts. “It seems like we are making more bureaucracy to accomplish the same thing, which is to expand the deployment of broadband,” he said. “At some point it would be beneficial for us to take a look at consolidating these programs.”

Rep. Steve Scalise, R-La., questioned the NTIA’s recent spectrum report, and asked why it would take 10 years and nearly $18 billion to relocate government agencies from the 1755-1780 MHz band. Strickling said that even if the time and financial estimates are high, “we really do need to have a new paradigm for spectrum and commercial use.” Strickling added that there are a number of Defense Department aeronautical systems in the 1755-1780 MHz band “that utilize all 95 MHz of that spectrum.” Scalise was unsatisfied: “The private sector is being held back from creating jobs” while federal agencies are “sitting on assets” that are owned by taxpayers, he said. Scalise is a member of the subcommittee’s recently formed spectrum working group.