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TPA to Senate: Time to Rein in Rural Utilities Service
05-03-2013 at 07:25 am - David Williams - Posted in: Broadband, David Williams, Farm Bill, Internet, Rural Utilities Service, Senate, Spending, Taxpayers Protection Alliance - 0 Comment

The Taxpayers Protection Alliance has expressed concerns about government-funded broadband for many years.  One program in particular that TPA has highlighted has been the Rural Utilities Service Broadband Loan Program.  We were encouraged last year when during last year’s consideration of the Farm Bill, the Senate adopted an amendment sponsored by Senator Mark Warner (D-Va.) which laid out the 25 percent unserved-household standard for the RUS Broadband Loan Program.  This effort received bi-partisan support from co-sponsors Sens. Mark Kirk (R-Ill.), Mike Crapo (R-Idaho), Jeanne Shaheen (D-N.H.), and Michael Bennet (D-Col.), which made significant reforms to the RUS Broadband Loan Program. Even though the program should be eliminated completely, limiting the RUS to serving areas where 25 percent of the households in an applicant’s proposed service is unserved is a step in the right direction.  Today (May 3) TPA sent a letter to the Senate encouraging and urging the Senate to keep Sen. Warner’s language as they craft this year’s Farm Bill.

Read full letter below:

 

United States Senate                                                                             May 3, 2013

Washington, D.C.  20510

Dear Senator

The Taxpayers Protection Alliance (TPA) urges you to support efforts to rein in the Rural Utilities Service’s (RUS) Broadband Loan Program.  Even though we believe in eliminating the program completely, limiting the RUS to serving areas where 25 percent of the households in an applicant’s proposed service is unserved is a step in the right direction.

During last year’s consideration of the Farm Bill, the Senate adopted an amendment sponsored by Senator Mark Warner (D-Va.) which laid out the 25 percent unserved-household standard for the RUS broadband loan program.  This effort received bi-partisan support from co-sponsors Sens. Mark Kirk (R-Ill.), Mike Crapo (R-Idaho), Jeanne Shaheen (D-N.H.), and Michael Bennet (D-Col.), which made significant reforms to the RUS Broadband Loan Program.  TPA, and taxpayers across the country, encourage the Senate to keep this language in the new Farm Bill.

RUS’s primary goal is to provide loans to help bring Internet broadband service to unserved rural communities, which are generally defined as communities with populations of less than 20,000.  A March, 2009 report by the U.S. Department of Agriculture’s (USDA) Office of Inspector General (OIG) observed that while the 2008 Farm Bill modified the broadband program and narrowed the definition of “rural area,” the  RUS continued to issue loans in exurban and suburban areas. Instead of funding deployment in unserved rural areas, the RUS had funded service in 148 communities which were within 30 miles of cities with 200,000 inhabitants, including communities near very large urban areas such as Chicago and Las Vegas.

According to a report by the USDA on April 23, 2012, “We found that RUS had not maintained its focus on rural communities most in need of Federal assistance. This is largely because its definition of ‘rural area,’ although within the statutory guidelines, was too broad to distinguish between suburban and rural communities. As a result, RUS issued over $103.4 million in loans to 64 communities near large cities.”

Not only does this misuse of taxpayer dollars do little to help the areas of the country that still don’t have broadband, but it also crowds out private investment in broadband. The Warner amendment is critical in bringing some accountability to the RUS.

Sincerely,

David E Williams

President


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