Cable Sues USDA Over 'Net Subsidy


The Iowa Cable & Telecommunications Association and cable company Mediacom have filed suit in federal court charging that the U.S. Department of Agriculture's broadband grant/loan program is a failure and actually undermines the broadband deployment it is designed to promote.

The suit, which asserts the loan program should be used primarily to fund broadband in rural, unserved areas, follows a USDA Inspector General report finding that "hundreds of millions" in low-interest loans were made to companies providing service in affluent communities, some with already two or more broadband providers.

As examples, the plaintiffs cited IG findings that: "In one instance, an applicant in North Dakota received a $15.6 million loan even though there were four other companies providing broadband service in a town of 15,000 people. And in Texas, $45.6 million in RUS loans were used to fund facilities in subdivisions just outside of Houston."