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Wednesday, November 18, 2009

Rural Utilities Service of USDA Issues Third Broadband Stimulus Report to Congress

Why It Matters that RUS Issues Separate Reports to Congress, Distinct from NTIA Reporting

StimulatingBroadband.com 11/18/09 Boston
- As required by provisions of the federal Recovery Act, the Rural Utilities Service (RUS) of the U.S. Department of Agriculture (USDA) yesterday issued to Congress its third quarterly report on its conduct of the Act's broadband stimulus program.

StimulatingBroadband.com obtained a copy of the report this afternoon from an authorized representative of RUS, published below.

NTIA and RUS: Separate Reports
Each quarter, the two separate agencies which administer the broadband stimulus program, funded with $7.2 billion in appropriations under the Recovery Act, file separate reports to Congress about the program.

Two days ago, on November 16, the National Telecommunications and Information Administration (NTIA) issued its own quarterly report to Congress on its Broadband Technology Opportunities Program (BTOP). Yesterday, RUS issued its report on the Broadband Initiatives Program (BIP) which it administers.

Although their respective administrators, Jonathan Adelstein at RUS and Larry Strickling at NTIA, have appeared jointly at each congressional oversight hearing (following appointment delays for each) held on the program, they are running separate and legally distinct elements of the effort. Congress funded the NTIA and RUS portions of the program with separate appropriations, and charged each with distinct missions.

In the flurry of activity around broadband funding and telecom regulatory issues in Washington, it is often difficult to keep all of the moving pieces straight. At least one national trade publication today referred to the the BTOP report as a "joint report" authored by both agencies. That is incorrect information. It is an easy mistake to make. Such a mistake nonetheless obscures a true understanding of the often strained relationship between NTIA and RUS, and makes more difficult a strategic understanding of the possible future of the program in funding Round II.

Separate Agencies, Separate Reports: Why Does It Matter?
Why does this issue of separate agencies and separate reports to Congress matter?

It is is important to understand the separate programmatic elements of the broadband stimulus initiative because there are financial, regulatory, and going forward strategies that are distinct to two programs. Those distinct programs are managed by organizations that have very different histories and skill sets.

As we documented throughout the spring of this year, it was not at all a foregone conclusion that there would be one jointly issued set of rules (called a Notice of Funds Availability, or NOFA) for funding Round I. We were the first online service to talk about a "consolidated NOFA" during that time. We followed the twists and turns of the inter-agency decision making, and identified the entrance into the process of policy makers from the Administration who directed the unified NOFA.

It was that effort by personnel from the Executive Office of the President (EOP) that generated the single document of funding rules on July 1 (with the official Federal Register version following on July 9). We call that single set of issued rules NOFA-1, a document still in force as funding Round I moves ahead.

Why Does It Really Matter?
Neither administrator, Adelstein nor Strickling, have mentioned it in any of their seemingly continuous testimony in congressional oversight hearings, but there remains considerable tension between the line managers at the two agencies. That tension is both indicative of the two fully distinct organizations at the agencies, and of the different approaches to the program ahead under funding Round II.

RUS has a national staff of full time employees in Washington, and in regional and state field offices nationwide who administer legacy grant and loan programs. Those programs have their origin in the presidency of Franklin Roosevelt. NTIA has no such widely decentralized staff, nor programmatic capacity. It has not run a national grant program approaching the scale and scope of BTOP since the defunding of the much smaller Technology Opportunities Program (TOP) during the administration of George W. Bush.

Significantly, what RUS has -- and has had for rural telecom projects since 1949 - is congressional authority to issue loans. As seen in the recovery Act, NTIA is authorized to issue only grants under BTOP. RUS, via BIP, has authority to issue grants, loans, and grant - loan combinations. Congress assigned the loan responsibilities of broadband stimulus solely to RUS given its decades of experience in writing and administering literally billions of dollars in infrastructure loans.

For these reasons of differing program capacity, institutional experience, and project financing, there is today the strong chance that the two programs may be administered with a much greater degree of separation under the Round II funding round.

Yes, we understand that the 2 agencies are now managing a joint public comment cycle intended to frame the rules for Round II. We get that. Both administrators have explicitly and repeatedly talked of continued close cooperation. They are being honest and straight forward, but there are differences between the agencies that even the best managers can not fully overcome.

From our discussions with line and policy mangers in the agencies, we now believe it is a sure bet the BIP and BTOP programs will be managed in Round II with greater independence of each other. We believe this will be the case, even if the the concept of a second joint agency NOFA remains in force.

Stay tuned.

NTIA Document Release
NTIA's separate Broadband Technology Opportunities Program (BTOP) Quarterly Program Status Report, issued on November 16, is available here. The document has been widely reported on and circulated on a variety of sites.

RUS Document Release
As we have before, we thank the hard working folks at RUS who, like their colleagues at NTIA, continue to do yeoman's duty under very difficult circumstances as the broadband stimulus program is rolled-out across the nation. We appreciate the effort to release the document to us, and expect the report will be posted soon on a federal site.

We have published the document at our deep content site StimulatingBroadband on Scribd, and make it available, here:


Broadband Stimulus Program Quarterly Report to Congress 3 - BIP Quarterly Report 3 Issued 11-17-2009

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