Red tape could hurt broadband program, senators warn

Influential senators raised fresh concerns about the $7.2 billion broadband stimulus program during an oversight hearing Tuesday, complaining that it is divided between two federal agencies when only one is necessary.

As part of this year's economic stimulus package, Congress tasked the Commerce Department's National Telecommunications and Information Administration and the Agriculture Department's Rural Utilities Service with implementing the initiative.

"There shouldn't be two of you here. Only in the federal government would we have two people doing the same thing," said Sen. Claire McCaskill, D-Mo., in a blunt assessment of the situation, which she described as "nonsense."

Referring to Rural Utilities Service Administrator Jonathan Adelstein and NTIA Chief Larry Strickling, she said, "If I could wave a magic wand I would morph you into one person and combine your two agencies with the snap of fingers."

"I don't know why it was divided up the way it was, but that's what happens with political power around here," echoed Senate Commerce Chairman John (Jay) Rockefeller. He further complained that some applicants well-positioned to aid their communities might be dissuaded by the cumbersome process for obtaining the stimulus funds.

Their comments reflect concerns raised by companies and other parties about the complexities of having requests for loans and grants reviewed by two bureaucracies -- and the risks of ending up with loans even when grants are sought.

After being inundated with close to 2,200 requests seeking nearly $28 billion, both agencies have fallen behind schedule and plan to begin issuing awards in mid-December -- a month later than intended.

Rockefeller and McCaskill were among the senators who criticized criteria that could prevent some rural areas within 50 miles of urban centers from being eligible for the most generous grants.

They urged the regulators to address the matter, prompting Adelstein to assure them that "everything is on the table" when it comes to making adjustments. He described Rural Utilities Service as between a rock and a hard place because it has been criticized for diverting too much assistance to nonrural areas.

Senate Commerce ranking member Kay Bailey Hutchison reiterated her view that the bulk of the funding should help regions that are unserved or "substantially" underserved.

During his testimony, Mark Goldstein, director of physical infrastructure issues at GAO, warned that both agencies lack funding for oversight of the program beyond FY10.

Adelstein and Strickling said they're doing everything they can to maximize the impact of the grants and loans. "I want to ensure you today that these funds will be well-spent," Strickling said, noting that there have been no turf battles.