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Getting Things Done: NTIA Delays Broadband Recovery Act Funding

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June 01, 2009

Getting Things Done: NTIA Delays Broadband Recovery Act Funding

By Barlow Keener, Attorney

On May 18, 2009, NTIA submitted the first required quarterly progress report to Congress on getting the Recovery Act funding out the door.  Without a press release or press conference, NTIA “quietly” (a word GigaOm’s Stacey Higginbotham used) explained to Congress that the first tranche of broadband funding would not be put to work until December 31, 2009.  In fact the report does not address the amending of the dates as a change and did not address the initial dates announced publicly at the March 10, 2009 open meeting. The NTIA Quarterly Report addressed the date change as follows and even hedged the committed date by using the word “anticipates”:

After its review of the initial grant applications, NTIA anticipates making grant awards beginning in the final quarter of calendar year 2009.
The Obama Administration’s site contains the specific date, December 31, 2009 as the “Initial Grant Award” date.   There is no mention of this date on the NTIA BTOP web site. We all know that “December 31, 2009” means no Recovery Act spending for jobs creation, stimulus or broadband acceleration during 2009. 
Telecommunications equipment vendors, internet providers, libraries, municipalities and the unemployed (now at 9%) are waiting for NTIA to release the funds.   There has been talk that some telecommunications providers are holding back on spending for new infrastructure until the NTIA and RUS funds are released.   Holding back on spending is clearly not helping the U.S. move forward in accelerating broadband penetration or in stimulating the job creation in 2009.  
NTIA and RUS are responsible for delivering $4.7 billion and $2.5 billion, respectively, for a total of $7.2 billion. Many have analogized building broadband to the unserved and underserved homes and businesses. 40 million+ homes do not have broadband today. On March 10, 2009, a few weeks after the act was signed on February 17, 2009, the NTIA held an open meeting. During the meeting, the NTIA’s Dr. Bernadette McGuire-Rivera, who has been responsible for the NTIA DTV-to-analog converter box coupon program, announced the tentative dates for the grants proposals and for releasing the funds:
The first grant round, again the notice for that we expect to go out, I'm going to give you ranges of times, between April and June of this year. Second round, from October to December of this year.  Third round around April or June in 2010.
It was clear from Dr. McGuire-Rivera’s March 10, 2009 announcement that, although the timing would be tight for turning around grants, getting funding into the hands of responsible grantees to deliver jobs, stimulate local economies, and build broadband infrastructure was more important than inter-agency or federal-state-municipal government wrangling.  The March 10, 2009 announcement left the impression that the first round of funding would be announced and delivered by September 30, 2009 (before the submission of the “second round”). The second round of funding would be delivered for new jobs by December 31, 2009. 
Transparency has been the key word used to describe the process involved with delivering the funding with no deals made without the public being notified. Transparency promotes integrity in the system and provides for economic predictability and stability for the telecommunications industry.  The seven NTIA, RUS, and FCC (News - Alert) open meetings held during March were a great start.   Delivering bad news for the telecommunications industry that broadband Recovery Act funds would not be delivered during 2009 through a “quietly” produced Congressional progress report does not build confidence in the process or in the commitment to transparency. Moving the release of funds dates out by four to six months during this economic crisis was not a mere administrative matter for the recipients of the news. The decision making process about changing the dates should have been more transparent. When finally made, the decision should have been clearly announced at press events by the Department of Commerce’s NTIA and explanations for the change should have been provided. 
While moving out the funds release dates into 2010 may have benefitted the NTIA and some states and municipalities to plan and put the grants together better than they would have on a fast track, the bottom line is that the Recovery Act broadband funds will not be used to stimulate the economy or the telecommunications industry during 2009.

Ed LaBanca, a veteran of the telecommunications industry with more than 30 years of experience in product design and management, writes the Enterprise & Contact Center Communications column for TMCnet. To read more of Ed’s articles, please visit his columnist page.

Edited by Jessica Kostek

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