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Unbelievable NTIA Figure: $1,759,530.79 per Unserved Home Passed in First Stimulus Round
Saturday, 17 July 2010 13:00
39 of the first 40 projects Larry Strickling approved at NTIA are not aimed at reaching people who can't get broadband. NTIA spent $1,759,530.79 of public funds per unserved home according to the spreadsheet I just obtained using the Freedom of Information Act. Yes, that's millions, although I'm sure the figure would be reduced to under $200,000/home and probably under $100,000/home if the agency carefully analyzed the projects funded for other reasons.
     When I return from Washington and I will scan and post the data they sent me on many sheets of paper. Since NTIA is currently considering spending another $2B or so of public money -- much I believe wasteful -- I wanted to get the basic information out before I left. Maybe now that the information is public they will post it on their website as well. 
      The one out of forty projects actually designed for people without service is 682 homes near Williamstown, Kentucky.  Some of the other projects cover areas where the broadband take rate is low, while many are for backhaul overbuilds or school connections where service is already widely available.
     The Obama platform promises "We will ensure every American has access to highspeed broadband," which should have come first. A half dozen Congressmen of both parties at an oversight hearing castigated NTIA and RUS for not reaching the unserved which they affirmed was the primary goal of the $7B they allocated.
In May I wrote "Strickling amazed me by giving the House Committee a big 'eff you, saying he would use the money not for people without service but instead for faster connections to community colleges, etc. ... . Boucher and Markey have backed off criticizing NTIA because of the election. I struggled with whether to do similar, because I'm a strong Obama supporter. Larry has been very gracious and people I respect believe he's one of the best. But I'm seeing $billions mostly wasted and NTIA is stonewalling not just me but Congress on how the money is being spent."
     I have three times asked Strickling "How many unserved have you reached and how many jobs directly created?" He always refused to answer, and I now have only a very partial answer a year later in response to my FOIA request. In addition, NTIA does not even have an estimate for "jobs directly created." They are apparently accepting figures of "indirect jobs." Those figures were seriously discredited by Raul Katz of Columbia as well as the work of the broadband plan.
   The $7.2B could easily have brought megabits to 98-99% if the U.S. if spent well, but will only reach about 20% of what was practical. With hindsight it becomes apparent the program was based on a totally false premise: Julius Genachowski's belief that 20% or so of the U.S. could not get broadband. The real number is about 5%, most of them in such small groups they can't be reached economically by anyone without local facilities. In most places, only the local telco and cableco have facilities, but the program was built on an assumption there would be many bidders. It cost nothing to apply, so 2,200 applied. But nearly none of the proposals were to bring service to those without.
        When the applications came in, nearly all the insiders knew the program was likely to fail. One top FCC official in August told me "I've given up on the broadband stimulus having any effect at all." Most of the money should have been frozen and everything rethought. Adelstein at RUS had the courage to say "I was wrong" and change the rules but NTIA didn't.

     Some of those other projects do serve public purposes at reasonable cost, as Larry has been desperately trying not to fund the most wasteful. But miscellaneous improved university connections do not fulfill Obama's promise "As a country, we have ensured that every American has access to telephone service and electricity, regardless of economic status, and Obama will do likewise for broadband Internet access."