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October 28, 2009 9:36 AM

RUS Skating On Thin Ice

One of the most notable things I observed at yesterday's Senate Commerce Committee oversight hearing on the broadband stimulus was the precarious situation that RUS finds itself in.

For starters, Sen. Rockefeller went out of his way multiple times to suggest that if he had it his way that RUS wouldn't have gotten any money from the broadband stimulus. He said that at the beginning, and then made another jab at the end where when referring to both Adelstein and Strickling he said that they represent one and a half agencies, alluding to his belief that RUS doesn't even constitute a whole agency.

It was interesting to hear a Senator call them out so directly, though it's not exactly surprising given the agency's many issues, like its historic inability to distribute all of its funds in a timely manner, like its penchant for giving money to areas that don't need it, and like its structure which favors profit-making deployers over community broadband efforts.

But that leads to another interesting happening from yesterday's hearing: watching Administrator Adelstein attempt to introduce his agency and its past in glowing terms.

Now, everyone acknowledges that Adelstein had nothing to do with RUS's past failures, and everyone seems to like him and want to see him succeed. But he's got a monumental challenge ahead of him to overcome, all while having to walk across a delicate tightrope.

The monumental challenge is obviously getting RUS working again, in particular the broadband grant, loan, and loan guarantee programs. While I get the sense they've got good people over at RUS, it can be hard to break through established habits and groupthink to chart a new course for the organization's future. It can be especially hard to introduce new ideas that exist outside of the box of their current view of the world.

The delicate nature of what Adelstein has to overcome is how he frames RUS's past relative to its future. I think he risks discrediting himself if he goes too far in praising everything RUS has done and doesn't address head-on the many concerns that Congress and others have about the agency's efficacy. Yet he obviously can't go too over-the-top in criticizing it as then he risks disenfranchising his troops by marginalizing their past efforts.

And while all of this is going on, the stakes couldn't be any higher. Already there are a number of Congressional types who are ready to divert all future funding away from RUS. And even those that still support the RUS must be rethinking that support to some degree given all the pressure against them during stimulus discussions to not further fund RUS.

So what this all leads me to believe is that in many ways this stimulus funding is RUS's last chance to prove that it can be an effective, efficient means of supplying the capital needed to overcome our country's rural broadband challenges.

If they can get money out (relatively) quickly to the right projects without being overly burdensome in their oversight, then they can start the process of proving that under new leadership they're righting the ship and not just being good stewards of taxpayer dollars but are also being an agent of change.

If they can't, if the money is slow in coming, if it ends up funding any of the wrong projects, if the stimulus distracts them from getting out their regularly appropriated funds, then I think it's likely they will not only not be included in any future broadband stimulus appropriations, they may also risk losing their authority over rural broadband altogether, with Congress potentially looking to shift those powers elsewhere.

I'll admit that this worst-case scenario may never come to pass as there are some Senators who may be willing to defend RUS until the grave, it can take a while to make any significant changes in Congress anyway, and there may not be anywhere better in government to handle these responsibilities, but I do think that through the convergence of the availability of these stimulus funds, the ongoing formulation of a national broadband, and the installation of someone as widely respected as Adelstein, that RUS faces its best, and possibly last great, opportunity to redefine itself, to prove to Congress that it can be an effective steward of taxpayer dollars.

I think the key of what it'll take for RUS to seize this opportunity can be found in Sen. Rockefeller's closing comment, where he echoed the sentiments of his colleagues by stressing the importance of doing the broadband stimulus right, and that to do that both Adelstein and Strickling were going to have to be clever. That just doing things the way they've always been done isn't good enough. And that both agencies need to prove themselves worthy of receiving additional funds in the future.

So I say to RUS, don't shirk from this opportunity! Don't allow yourselves to fall into the rut of doing business as usual. Now is your opportunity to redefine your agency for the 21st century. Now is your time to showcase how you are the best stewards of rural America's broadband future. I charge you to show the world what you're capable of. Rural America's counting on you.

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Comments (1)

Geoff:

I also found it interesting that the RUS was made to be the underdog, particularly because the way I understand it is that the evaluation of the BIP applications takes precedence over BTOP.

I believe the reason the RUS has had such trouble with Broadband Infrastructure loans is right at the core of this whole issue. It's just not as simple to do rural Broadband development as many would think. Specifically, in many rural areas there's no way a project focusing only on rural Broadband development can be financially viable without some subsidy and therefore there's few that can qualify for the RUS loans, much less pay them back. On the other hand, the ones that can be viable and pay back the loans are in the more populated areas where it's easier to develop a user base, which tends to put the RUS in conflict with the overall objective.

I don't fault the RUS for this. They are in an untenable situation in that the people criticizing them probably don't really understand the difficulties involved. Frankly, I don't think the RUS did till recently either.

I hope that all of this is not lost of those evaluating the broadband Stimulus applications. Many of the applications would never be viable without such a grant and may not have long-term viability even with the grant funds. The overbearing enthusiasm over the first round has unfortunately resulted in many applications that are either totally devoid of merit or that will only serve to develop limited additional opportunistic market share at taxpayer expense.

The evidence for this is in the history of rural Broadband development. In nearly all cases, projects that were to result in ubiquitous rural services ended up only serving corridors and population clusters. To get beyond this problem requires much more insight than has been the case. One can only hope such insight will be applied to evaluation of the current applications and that some truely creative solutions will be funded. I personally believe that the RUS, mostly because of these criticisms, is actually better prepared to select those projects that will actually result in long-term rural broadband solutions.

Chuck

Posted by Charles Scott on October 28, 2009 11:55 AM

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