$7.2 Billion Stimulus Package Promotes Broadband Overbuild

$7.2 Billion Stimulus Package Promotes Broadband Overbuild

Bruce Edward Walker

Bruce Edward Walker was managing editor of InfoTech & Telecom News from 2010 to 2012.... (read full bio)

The Government Accountability Office (GAO) report on the first of two rounds of federal stimulus funding to extend broadband access and adoption reveals numerous instances of publicly funded projects where privately funded operations already existed, a condition known as “overbuild.”

The GAO report, “Recovery Act: Further Opportunities Exist to Strengthen Oversight of Broadband Stimulus Program,” was released in August and details the outcome of $7.2 billion in appropriations from the American Recovery and Reinvestment Act to the Department of Commerce’s National Telecommunications and Information Administration (NTIA) and the Department of Agriculture’s Rural Utilities Service (RUS) for grants and loans to a variety of program applicants.

“NTIA’s contractor had a low or medium level of confidence in the accuracy of the overbuild analysis because data were inconclusive,” the GAO study reported.

Despite the GAO’s assertion its review of “found that the agencies consistently reviewed the applications and substantiated the information as specified in the first funding notice,” it also noted the process was “cumbersome” and “inconclusive.”

Broadband Overbuild

Diane Katz, a Heritage Foundation research fellow in regulatory policy, identified several specific instances of broadband overbuild.

For example, she notes Texas received $184 million in grants even though the Lone Star state already boasted 161 broadband providers. Likewise, although Kansas took home $121 million for broadband deployment, there were already 96 providers in the state.

Bruce Edward Walker (bwalker@heartland.org) is managing editor of Info Tech & Telecom News.

Internet Info:

“Stimulating Competitive Disadvantages in Broadband,” The Heritage Foundation Foundry Blog, August 31, 2010: http://blog.heritage.org/2010/08/31/stimulating-competitive-disadvantages-in-broadband/

“Recovery Act: Further Opportunities Exist to Strengthen Oversight of Broadband Stimulus Programs,” Government Accountability Office Report, August 2010: http://www.http://www.heartland.org/infotech-news.org/article/28354/Recovery_Act_Further_Opportunities_Exist_to_Strengthen_Oversight_of_Broadband_Stimulus_Programs_Government_Accountability_Office_Report.html

Bruce Edward Walker

Bruce Edward Walker was managing editor of InfoTech & Telecom News from 2010 to 2012.... (read full bio)