WASHINGTON – The first broadband stimulus grants won't be awarded until December, a month later than expected, federal officials said Tuesday, citing the complexity of the 2,200 applications received.
"We're going to take a few more weeks here to get this right. We absolutely understand the need to get the dollars out," said Larry Strickling, head of the Commerce Department's National Telecommunications and Information Administration, which is giving out some of the $7.2 billion in stimulus funding set aside for broadband Internet lines.
Mr. Strickling announced the delay at a Senate oversight hearing Tuesday, where several lawmakers expressed frustration at how the program has been run and concerns that the money won't be spent in rural areas without decent high-speed Internet service.
"I believe that to be fair to applicants, we need to find a way to simplify the process going forward," said Sen. Jay Rockefeller (D-W. Va), who questioned why applicants were asked for so much information and raised concerns that small companies serving rural areas in West Virginia and other states found the application process too daunting and costly to attempt.
A month delay in getting the stimulus funds out is the latest setback for the broadband grant program, which has drawn criticism for being laden down with so many rules and conditions that the nation's largest Internet providers -- AT&T Inc., Comcast Corp. and other smaller phone and cable companies – didn't bother applying for funds.
On Wednesday, Comcast and other Internet providers are expected to file information with federal officials that identifies areas where they offer service. Broadband stimulus grants are mostly being targeted at areas which don't have service now. Internet providers are worried that the government might help their competitors build out new lines in areas which already have some Internet service.
Federal officials are considering a number of changes to the program, including delaying the next application deadline so changes can be made that would allow more rural areas to become eligible for funding.
"There's no question we'll make changes. We've learned a lot from this first round," said Jonathan Adelstein, administrator of the Agriculture Department agency which is handing out some of the stimulus funding.
In January, Congress set aside $7.2 billion in stimulus funding to build new broadband lines and for programs to encourage more Americans to subscribe. The money was split between the Commerce Department and the Agriculture Department, which has run a loan program for broadband investments for several years.
That Agriculture Department program has been criticized over the past few years by congressional investigators and the USDA's own inspector general, which has found the program has offer low-cost loans for broadband lines in suburban areas with existing service and other problems.
On Tuesday, the Government Accountability Office laid out a number of concerns it has about the program, including the ability of the agencies to process that many applications effectively by September 2010, when all of the money must be awarded.
The GAO also raised concerns that the agencies don't have plans for monitoring the projects past 2010, even though much of the money will still be going out the door.
"The agencies charged with administering these programs have not convinced me that they have an adequate plan or sufficient staff to provide post-grant oversight of these projects," said Sen. Kay Bailey Hutchison (R-TX), during the hearing.
