Tuesday, October 27, 2009

Citizens Against Government Waste Takes Aim at Broadband Stimulus Applicants

BUSINESS WIRE via 10/27/09 - Citizens Against Government Waste (CAGW) today raised objections to 23 applications for broadband stimulus grants totaling $550 million that have been submitted to the National Telecommunications Information Administration (NTIA).

“There have been numerous reports of waste and mismanagement of stimulus funds, such as hundreds of underage ‘first-time homebuyers,’ including a four year-old, seeking the $8,000 tax credit,” said CAGW President Tom Schatz. “There is a total of $4.7 billion at stake in the Broadband Technology Opportunities Program, which should not become another opportunity to waste the taxpayers’ money.”

There are many reasons to question the 23 applications. Due to a 20 percent matching fund requirement, states with large budget deficits, such as New York and Maryland, will have to come up with tens of millions of dollars that they simply don’t have to spend on broadband services.

One applicant, the California Broadband Cooperative, is seeking $81 million to serve 400 housing units, equal to $202,500 per unit; even worse, it does not have the 20 percent matching funds and is seeking 100 percent funding from NTIA.

The City of Philadelphia is asking for $21,818,411 to build a fiber backbone/ring in the city; and Wilco Electronic Systems, as part of a Philadelphia Housing Authority project, is asking for a suspiciously similar $21,865,647 to provide broadband service in parts of the city; both are examples of municipal overbuild.

Apparently the state of Delaware is bereft of any service providers; four of the applications cover all or part of the state. The most ridiculous request of all was made by the E-Mac Corporation, which claimed that there are 397,104 underserved households and 395,323 unserved homes in Delaware when there are approximately 300,000 households, period, in the entire state.

CAGW’s letters note that the entire NTIA budget in fiscal year 2009 was $658 million.

The $4.7 billion being provided in the stimulus for the BTOP is 624.5 percent greater than that amount. NTIA’s prior experience in issuing broadband grants was limited to the discontinued Technology Opportunities Program, which provided $233 million in grants between 1994-2004, or 5 percent of the BTOP total.

“In order for NTIA to spend $4.7 billion expeditiously without waste or mismanagement, the agency will have to thoroughly review each application. There is a September 30, 2010 deadline to spend the stimulus money, so there may be a temptation to just say ‘yes’ to every applicant,” added Schatz.

“Taxpayers, the media, and hopefully members of Congress will be watching to see how these applications are handled by NTIA.”

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.
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