[F]ederal watchdogs have been raising questions about the U.S. Department of Agriculture’s broadband funding programs for four years, including programs that awarded more than $100 million to the Vermont Telephone Co.
The U.S. Government Accountability Office has released three reports since 2012 questioning the oversight at the USDA’s Rural Utilities Service, which awards grants and loans to companies that say it is too expensive to build in rural areas without a subsidy.
Two of the reports focus on shortcomings in the Broadband Infrastructure Program, the source of a $116 million award for VTel’s Wireless Open World project. One of those two raises additional questions about another federal program that awarded VTel $12.3 million to install fiber-optic cable in Vermont, New York and New Hampshire.
A recent VTDigger investigation found there is no evidence, based on public documents, to show that everyone in Essex County in the Northeast Kingdom has access to broadband, even though the Rural Utilities Service shelled out $116 million to connect the area.
Additionally, the investigation showed that residents of southern Vermont complain that VTel service through the Wireless Open World project is “spotty,” even though the Rural Utilities Service says VTel has lived up to its promise to build wireless Internet towers to serve rural areas of the state.
A spokesperson for the Rural Utilities Service said the agency “provided sufficient oversight” of the VTel project. “The Vermont project is among the 250-plus successful broadband (American Recovery and Reinvestment Act) projects providing service in 44 states and American Samoa.”
“Recovery Act projects will continue to grow and attract subscribers, providing access to improved educational, health care and business services and contributing to economic growth and prosperity,” the spokesperson said. “All RUS loans comply with the statutory requirements.”
The first audit of the Rural Utilities Service, in September 2012, focused on ways the federal agency failed at collecting data on projects that received awards. At the time, the most reliable indicator that a project was moving along was the amount of money it received from the federal government, the audit said.
At the time, the Rural Utilities Service had disbursed about 30 percent of the $3.3 billion it awarded to broadband companies. “However, the agencies disburse awarded funds for projects as payment becomes due, only as contracts are complete,” the audit said.
“The data (the RUS) has recently collected are not reliable measures of fiber miles and wireless access points deployed by (Broadband Infrastructure Program) projects,” the audit said, adding that the government “may struggle to demonstrate the progress and effectiveness” of the program because of the data limitations.
The audit said the Rural Utilities Service “did not establish nonfinancial performance metrics” for measuring progress on projects similar to Wireless Open World, and the agency “tends to focus on ensuring that the funding is disbursed, the project is built, and the agency is repaid, instead of tracking project outcome information.”
“In June 2012, RUS officials told us that they began tracking the number of fiber miles and wireless access points deployed (but) they could not ensure the quality of the data at that time,” the audit said, adding that the agency “may not be able to demonstrate the progress and effectiveness” of the Broadband Infrastructure Program.
Additionally, the audit said the Rural Utilities Service data on how many subscribers were using the federally funded broadband programs “may not be accurate,” and the agency told auditors “that the data are inaccurate and that RUS has implemented quality checks to improve the information.”
By June 2014, federal watchdogs said the Rural Utilities Service had been collecting appropriate data to monitor the Broadband Infrastructure Program awards. But a June 2014 report said the RUS was reporting limited information on the program’s impact on rural broadband availability.
By the time of the report, the agency had disbursed more than two-thirds of the $3 billion in awards from the Broadband Infrastructure Program, which auditors called “an unprecedented level of federal investment in broadband infrastructure, amounting to over eight times the funds RUS otherwise had available for broadband in the past decade.”
However, the Rural Utilities Service was reporting limited information, did not track the results of the Broadband Infrastructure Program in the USDA’s annual reports, and had not proved how the “unprecedented” level of investment in broadband helped rural Americans get Internet service, according to the report.
“Without reliable and regular information on the results of (these) projects, it will be difficult for USDA, RUS, and policy makers to determine the impact of Recovery Act funds and (the program’s) progress on improving broadband availability,” the report said.
