As if the Administration’s stimulus program didn’t have enough problems, the Government Accountability Office has now issued a report raising concerns on the handling of $7.2 billion in broadband communications grants warning the programs “present risks of waste, fraud and abuse“.
The agencies – the Commerce Department’s National Telecommunications and Information Administration, and Agriculture’s Rural Utilities Service were charged with awarding grants to help build out broadband Internet infrastructure, such as bringing wireless broadband connectivity to 41 Minneapolis public housing high-rises. But the complete mapping data on where investment is needed won’t be available until March 2010. This lack of data, the GAO warns, combined with staffing challenges and a deadline of September 2010 to award the grants, “may pose risks to the thoroughness of the application evaluation process.”
The GAO also had concerns about agencies ability to administer a program of that scale. The NTIA and RUS both expect to fund around 1000 projects each before the September 30th deadline. Previously, the NTIA’s Technology Opportunities Program has averaged a total of 55 grants per year while the RUS’s Broadband Access Loan Program averaged 15. The average amounts for each project by the NTIA and RUS is estimated to be $4.35 million and $9 million respectively. In the past, the average grant for the Technology Opportunities Program was $382,000 while the average amount for the Broadband Access Loan Program was $521,000. The GAO has also warned that the programs may lack the ability to effectively monitor the projects to completion.
This is not the first time that concerns have been raised on the handling of the stimulus funds for broadband infrastructure. Some have also questioned the seemingly excessive $350 million that Congress has allocated for the production of a national broadband map to aid the government on where to best direct the funds. Currently, approximately $125 million has been requested. And, as the AP reported: Rory Altman, director at telecommunications consulting firm Altman Vilandrie & Co., noted that “even $100 million may be high”. Altman added that his firm “could create a national broadband map for $3.5 million and would gladly do it for $35 million.” Similarly, the AP added: “Dave Burstein, editor of the DSL Prime broadband industry newsletter, believes a reasonable cost for the map would be less than $30 million.”
Of course for many, spending is the whole point of a stimulus. But, as the GAO report shows, spending is easy. Spending effectively is the hard part.