Stimulus spending too fast, group warns

Public interest groups are concerned that the government is spending billions in stimulus dollars to expand high-speed Internet networks without first knowing where they are most needed.

Their concerns highlight one of the biggest challenges that Obama administration is facing with the contentious stimulus signed into law this year. Many have criticized the White House for not circulating money fast enough to create jobs and boast the economy. But some are worried about just the opposite - that it is spending without properly assessing where the dollars will have the most impact.

The point of the broadband program is to expand high-speed networks in regions that have little or no Internet access. Stimulus dollars are also going toward creating a nationwide map to show where broadband is available and where it is needed.

But the map will not exist to guide the development of the actual networks until about half the money has been spent, consumer groups say. The government is doling out $4 billion of the $7.2 billion set aside for the broadband projects in the next few months.

Complicating the matter further is multiple government agencies are involved in collecting the data, but with different methods. That could lead to errors and ineffective spending, the groups say.

“We’re spending a lot of money very quickly under the stimulus act, but we don’t have the data we need to spend that money the right way,” said Derek Turner, policy counsel at Free Press, a public interest group. “There needs to be a national basis of information gathered very quickly."

The $787 billion stimulus called for the careful collection of data about where high-speed Internet service is offered. But Congress also ordered the quick spending of the money, giving agencies little time to collect data ahead of time. The National Telecommunications and Information Administration (NTIA), an agency within the Commerce Department, has allocated $240 million in stimulus grants to states to map broadband availability. The Commerce Department, working with the Agriculture Department's Rural Utility Service, is simultaneously doling out more than $4 billion in the first of three bidding rounds to expand Internet networks.

The program has been quite popular so far. The Commerce and Agriculture departments said they've received nearly 2,200 applications for almost $28 billion funding proposed broadband projects.

Meanwhile, the Federal Communications Commission (FCC) is collecting its own data about Internet penetration as it puts together the National Broadband Plan—a separate set of recommendations due to Congress in February that will likely guide future investment.

But in order to spend the stimulus money effectively, public interest groups say the FCC and NTIA should first coordinate their data collection processes. They also say the agencies are using different standards and methods of measuring broadband penetration, which could lead to an inaccurate map and, in turn, bad spending decisions.

In a letter sent this month to FCC Chairman Julius Genachowski, consumer groups including Consumer Federation of America, New America Foundation, Media Access Project and Consumers Union said the agency should be collecting information not only about broadband availability but also about speed, price, cost, revenue, capacity and network infrastructure.

In an interview, Genachowski said “there have been a lot of discussions back and forth” between the FCC and NTIA in a “cooperative relationship.”

“We’re working together now to understand the applications that came in last week,” he said. “This will be ongoing for the full duration of the broadband process—to figure out what kind of data we ultimately need in order to facilitate the best decision making.”

The NTIA has made some concessions in its data-collection process. The NTIA initially asked the Internet service providers to submit data about revenue earned per subscriber, but dropped the request after carriers including Verizon and AT&T complained that the data was proprietary and not relevant to mapping broadband availability.

The NTIA also tweaked other aspects of the request. The telecom companies agreed to tell the government where they provide Internet service based on census blocks, a larger increment than the address-by-address data the government initially asked for. The carriers will also give the advertised speed in the markets they serve, which is often higher than the actual speeds delivered.

Tom Power, NTIA chief of staff, said the changes helped ensure that the carriers would cooperate in the data collection process. The companies also agreed to be labeled by name on the final broadband map, holding them more accountable for the services they claim to provide.

“It was a big win to get the carriers to say they would turn over the data,” he said.

The grants are intended to help states locate areas that have little or no access to broadband. Some states are hoping to partner with third-party data collectors such as OneEconomy, BroadMap and ConnectedNation. But many third-party vendors use different methods to collect the data, so when the national map is pieced together, data from one state may not be directly comparable to another.

Power said the department will have a better idea of how to deal with those differences in data collection once it has reviewed the applications.

“That’s what we’re talking to the FCC about—to make sure there is no redundancy or lack of uniformity in the data,” he said.

Ken Eisner, managing director of ventures for OneEconomy, a nonprofit that is partnering with communities to apply for stimulus funds, said gathering precise data is a noble goal, but that getting communities connected to the Internet, creating jobs in the process, is the major goal of the stimulus plan.

“We can always increase the level of data and information, but we also have to make sure the plans aren’t compromised,” he said.

The consumer groups say they hope the broadband map will be put together in time to help guide the second and third rounds of grants for broadband projects scheduled for next year.

The FCC has already been collecting broadband data, requiring firms to submit information about their services on an annual basis.

In the letter to Genachowski, the public interest groups said the agency should require Internet companies to report at the census-block level in order to align with the NTIA’s new collection plans. That will also let the agencies layer the data with other census information, such as race, age and income to better understand broadband adoption patterns.

Harold Feld, legal director for Public Knowledge, said the FCC should force the companies to hand over as much data as is needed.

“The FCC is in much better shape to simply require the carriers to provide detailed information than the NTIA, whose regulatory authority is less clear,” he said. “Our hope is they’ll work together will to extract the necessary data at a level that provides for meaningful debate and doesn’t let the industry dig in its heels and hold up the data for too long.”