Commerce Department cancels broadband stimulus funds to Louisiana

By Brendan Sasso - 11/01/11 03:51 PM ET

The Commerce Department has cancelled an $80 million stimulus grant that was aimed at expanding high-speed Internet access in Louisiana, saying the state had violated the terms of the grant by changing its plans and falling behind schedule.

The grant, which was award to Louisiana last year as part of the economic stimulus law, would have deployed 900 miles of fiber optic network in rural parts of the state. The program would have especially focused on expanding access in universities, schools, libraries and health care facilities.

Aside from the roughly $594,000 that was already spent, the money will be returned to the U.S. Treasury, according to the National Telecommunications and Information Administration, the Commerce Department agency overseeing the funds.

"We wish that the Louisiana infrastructure project could have moved forward to bring much-needed economic opportunities in the state," Lawrence Strickling, the administrator of NTIA, said. "Due to changes in the grantee’s project plans, however, we had concerns about the project’s long-term viability and timeliness.”

The agency's decision is final, and there is no appeals process for the state.

Sen. Mary Landrieu (D-La.) pinned the blame for the failed project on the state government.

"Despite receiving the green light for more than $80 million in federal funds, the State fumbled the ball and was either unable or unwilling to complete the project, which could have been a tremendous boost to Central and Northeast Louisiana," Landrieu said in a statement.

"This is yet another missed opportunity to improve the lives of Louisiana residents, particularly rural Louisianians who are often left out of such initiatives."

A spokesman for Gov. Bobby Jindal (R-La.) points out that it was the state's Board of Regents, and not the governor's office, that originally applied for the funds.

"From the start, we've always said there were implementation and sustainability problems in the grant that had to do with a top-down, government-heavy approach that would compete with and undermine, rather than partner with, the private sector and locals," said Paul Rainwater, commissioner of the state's Division of Administration.

Commissioner of Higher Education Jim Purcell said he became aware of delays and problems with the project soon after taking his post earlier this year.

"In my capacity, I have worked closely with stakeholders including the Division of Administration as well as private internet providers to prepare an alternative implementation plan that would salvage this project. Unfortunately, despite gaining demonstrated support from both our public and private partners, our approach was rejected," he said, adding he hoped to continue working to expand high-speed Internet access in rural areas.

This post was updated at 5:05 p.m.