House Small Business Committee Backs Focus on Broadband Funding For Remote Areas

Committee chair and ranking member say funds should be targeted to unserved locales

The cable industry has found allies in the chair and ranking members of the House Small Business Committee in its push to get the government to focus broadband stimulus money on areas where there is no broadband access.

In a letter to the National Telecommunications and Information Agency (NTIA) and Rural Utilities Service (RUS), which are soliciting comments on ways to improve the stimulus fund bidding process, Committee Chair Rep. Nydia M. Velázquez (D-N.Y.) and ranking member Rep. Sam Graves (R-Mo.), wrote: "It is the Committee's recommendation that funds should be targeted to areas which are first "unserved" and only then to "underserved" areas, if funding remains."

The letter was signed by 21 members, or about two-thirds of the committee.

The committee held a hearing Oct. 22 on the Recovery Act's broadband stimulus funding, in which $7.2 billion is being handed out in grants and loans by NTIA and RUS. The first round of bidding has closed, but not without criticism from industry and the Hill over how it was set up, including what was seen as disincentives to small business and definitions of service that excluded some areas.

The committee had more recommendations for the next round of bidding next year. That includes improving the Web sites to make it easier to comment or apply for funds, saying the current procedures are "confusing and time/resource consuming."

The committee also says the application process for the first round included the following barriers to small business participation that need to be lowered next time around: "a 10-year limitation on the sale of award funded facilities, a matching contribution requirement, and a first lien rule." Requiring RUS, for example, to hold the exclusive first lien (the first lender to get paid back) violated some existing loan agreements and discouraged "many companies" from participating, the legislators said.

One problem raised at the October hearing and echoed in House and Senate Commerce Committee hearings on the program, is the definition of remote area. The current definition is an area 50 miles from a non-rural area. But that can exclude mountainous areas where it is geography, not distance, that makes an area remote. This include much of the state of West Virginia, home of Senate Commerce Committee Chairman Jay Rockefeller and Rick Boucher (D-Va.), chair of the House Communications Subcommittee.

The Small Business Committee members suggested that definition needs to either be modified or jettisoned.

At the October hearing, NewWave Communications President and American Cable Association member James Gleason, raised many of the issues the letter seeks to address.

"I am very pleased that Chairwoman Rep. Nydia M. Velázquez (D.-N.Y.) and ranking member Rep. Sam Graves (R-Mo.) agreed with ACA that applicants should have easier access to grant money and not be constrained by the first-lien rule or the prohibition on the sale of funded infrastructure for 10 years, among other issues," said ACA President Matt Polka in a statement.