Rural broadband loan program may fail recovery transparency test

A federal watchdog lambasted a U.S. Dept. of Agriculture Rural Utility Service effort to expand broadband Internet service to rural communities for serious “irregularities” in the $5.7 billion loan program.

The Ag department’s Inspector General knocked the broadband program for being too slow to dole out money, approving projects near major urban cities and loaning money to areas already served while three largely rural western states, Idaho, Montana and New Mexico, have received no money at all.

We remain concerned with RUS’ current direction of the broadband program, particularly as they receive greater funding under the American Recovery and Reinvestment Act. RUS’ broadband program may not meet the Recovery Act’s objective of awarding funds to projects that provide service to the most rural residents that do not have access to broadband service.

As NewWest notes, the USDA is slated to receive an additional $2.5 billion in broadband loans to expand coverage areas under the federal economic stimulus act.

Of the $267 million loaned to broadband companies to promote economic growth and high-speed Internet availability in rural Colorado, 82 percent of the 546 small communities in the service areas already had two or more broadband plans to choose from.

The Inspector General’s audit also found that the program has made $1.35 billion in loans since 2001, or just 24 percent of the $5.7 billion allocated by Congress over the last eight fiscal years with more funding on the way.

In response to the critique, the RUS argued that it has not taken a more fleet-footed approach in addressing the auditor’s 2005 report corrective action recommendations because of holdups in passing the 2008 Farm Bill that could have demanded new revisions to the proposed loan guidelines.

Buck passing. How quaint.

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