TPA Sends Letter Urging House Agriculture Committee to Reject RUS Broadband Loan Program Amendment

As the Taxpayers Protection Alliance (TPA) continues to follow developments on the Farm Bill, including the bill clearing the Senate Agriculture Committee yesterday, TPA President David Williams sent a letter to the House Agriculture Committee yesterday in response to a proposed amendment weakening oversight of the wasteful Rural Utilities Service Broadband Loan Program. The letter outlines opposition to the program and calls on the committee to reject an amendment offered by Rep. Chris Gibson (R-N.Y.) and Rep. Kurt Schrader (D-Ore.) further providing taxpayer funding to a program rife with problems. When it comes to wise use of taxpayer dollars, RUS has a troubled history. 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. In 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. Also, 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.”  TPA will continue to monitor this and other provisions in the Farm Bill.

Read the full letter here:

House Agriculture Committee

May 14, 2013

Washington, D.C. 20510

Dear Committee Members and Staff:

The Taxpayers Protection Alliance (TPA) urges you to reject an amendment offered by Reps. Chris Gibson (R-N.Y.) and Kurt Schrader (D-Ore.) which would weaken oversight of loans given by the Rural Utilities Services (RUS) for broadband deployment in unserved areas. TPA supports eliminating RUS completely, but in the absence of total elimination, safeguards must be put in place to ensure that taxpayer money spent on broadband deployment be closely monitored.

The amendment states that, “The Secretary shall establish a process under which an incumbent service provider which, as of the date of the publication of notice under paragraph (5) with respect to an application submitted by the provider, is providing broadband service to a remote rural area, may (but shall not be required to) submit to the Secretary, not less than 15 and not more than 30 days after that date, information regarding the broadband services that the provider offers in the proposed service territory…” Not requiring recipients to account for the expenditures puts hundreds of millions of tax dollars at risk.

When it comes to wise use of taxpayer dollars, RUS has a troubled history. 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. In 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 that were within 30 miles of cities with 200,000 inhabitants, including communities near very large urban areas such as Chicago and Las Vegas.

Furthermore, 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. Reps. Gibson’s and Schrader’s amendment should be rejected by the Committee.

Sincerely,

David Williams

President

Taxpayers Protection Alliance