By David Hatch
(Tuesday, May 22) Two senators introduced legislation to overhaul a federal loan program designed to spur deployment of high-speed Internet service to rural communities.
The initiative, part of the Agriculture Department's Rural Utilities Service, has provided more than 70 loans totaling $1.2 billion since its creation five years ago. But critics, including Senate bill sponsors Pat Roberts, R-Kan., and Ken Salazar, D-Colo., complain that most of the money goes to places that do not need it.
"RUS has used its limited funds in urban areas, suburban developments and towns that already have access to high-speed Internet," Roberts said in a written statement. He wants to shift the focus back to rural regions that lack broadband service.
Roberts added that high-speed Internet access is as critical today as railroads in the 19th century. "If we are to close the digital divide, we need a comprehensive approach that effectively targets rural America," he said. Salazar's office did not return phone calls.
Congress created the broadband loan program in the 2002 farm bill to assist communities with populations of 20,000 or less. For fiscal 2008, the Bush administration has proposed a $300 million budget.
In a 2005 report, the Agriculture Department's inspector general concluded that the effort "has shifted away from those rural communities that would not, without government assistance, have access to broadband technologies." It blamed "inconsistent" administration for "irregularities in approving and servicing grants and loans."
A Roberts staffer also faulted Congress for sending mixed signals about where the loans should be targeted and under what circumstances. The program's administrator has considerable latitude in distributing loans. To recalibrate the program, the legislation, S. 1439, would mandate that loans go to areas where at least 75 percent of residents lack access to broadband.
Jay Fletcher, an Agriculture spokesman for rural development, said the agency is taking steps to revise and update its guidelines. On May 17, the department proposed limiting funding to urban centers "where a significant share of the market is served by incumbent providers."
It recommended that loans be awarded to areas where 40 percent of households are not served or have only one high-speed Internet provider. Agriculture also sought to increase transparency, improve lending/borrowing decisions and ensure that funding keeps pace with bandwidth demand. The department is accepting public comment and may issue interim rules this summer.
Both Roberts and Salazar sit on the Agriculture Committee and are hopeful that their legislation will be woven into a 2007 farm bill, the Roberts staffer said.
A similar House measure that would revamp the broadband loan program to focus on truly rural areas was introduced in April.
In a statement, U.S. Telecom Association President Walter McCormick Jr. applauded the latest bill and said the changes "are long overdue."
The Senate Commerce Committee is exploring separate steps to increase broadband availability. "We're sensitive to the concerns of the Commerce Committee," the Roberts aide said, noting that he has kept that panel apprised of his boss' legislation, which he said "clearly" falls within Agriculture's jurisdiction.
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