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January 18, 2010 8:54 AM

Ways That NTIA/RUS Are Failing Stimulus Applicants

On Friday afternoon NTIA/RUS slipped the NOFA for the second round of the stimulus out their front door, starting the two-month clock on the next opportunity to make a grab for government dollars.

Less than a fraction of the first round of the stimulus has been awarded but now the second round is already available. But this creates a quandary: what are those that have applied for funds but not received notice either way as to the status of their applications supposed to do?

Many small companies and municipalities have tens and hundreds of thousands of dollars sunk into putting together all the information needed to apply for stimulus dollars, and yet they have not heard one word from NTIA/RUS in the five months since they submitted them.

Now what are they to do? Should they start reworking their applications, even though they don't know if they're going to win in this round or if their application never had a chance no matter how much tweaking? Should they waste more money attempting to navigate a selection process that seems broken and unable to produce results?

Remarkably, I've heard mixed things about whether or not NTIA/RUS are even going to send out rejection letters. Given that they're likely not going to be done awarding the first round until the end of February, that could mean that some projects won't know their fate until two weeks before the deadline for submitting to the second round, which is so absurd I'm having a hard time believing NTIA/RUS would do this.

Another thing that doesn't make a lot of sense to me is that I've heard there are currently no plans to give any feedback to applicants that don't make the cut in the first round. NTIA/RUS has suggested that they'll all be encouraged to reapply for the second round, and yet they're not doing anything to help them improve their applications.

I can understand that they're totally overwhelmed and not looking to take on any more work, but why can't they at a minimum make all the scoring and review materials available on the public record. If applicants could see their scores, who reviewed them, and the notes of that reviewer they could have something to work with on improving their applications for the second round.

If we made this information public we could also confirm that the review and selection process is working. And a potentially beneficial side effect of doing this is perhaps we could shame those applicants who clearly didn't deserve funding to not reapply in the second round.

I don't mean to be too bleak in the picture I paint about the broadband stimulus, it's just hard not to get discouraged when I hear from deployers who I know can be good stewards of taxpayer dollars and who I know have worthwhile projects about how frustratingly opaque this process has been.

Now with the second round of the stimulus out before the first round closes and even before a large number of applicants have heard one word on the fate of their first application, I can't help but feel that NTIA/RUS are failing these applicants and therefore all of America.

And things don't look like they're poised to get any better.

So far in reading through the second NOFA it looks like my fears are being confirmed that the major tweaks they've made to the rules amount to making it easier for more people to apply, which means there'll likely be even more applications to vet in the second round.

Even though I'm sure some of their intent in releasing the NOFA now was to get the second round moving forward so they'll have enough time to get through everything, if this process follows the same trajectory as the first round then that means they're going to take all the way until late summer and even early fall to pick winners. Given that it'll then likely take a month or two to actually get the money out the door, it's looking likely that we're going to miss another whole build season, especially in northern states. This means so-called "broadband stimulus" funds passed in February of 2009 won't be stimulating deployment until the spring of 2011.

And it looks as though RUS has continued to ignore the potential of loan guarantees, which the ARRA specifically supports and yet RUS for some reason refuses to acknowledge, despite the fact that they could allow them to distribute more money more quickly with less risk to taxpayers.

As I peruse the second NOFAs I do acknowledge that improvements have been made in some areas, which I'll get into in a later post, but my immediate and lingering reaction to this move by NTIA/RUS is that they're still scrambling to figure out what they're doing, and that as a result they're making a lot of bad decisions.

They're moving too slow when this is supposed to be about stimulus, but then moving too fast as they feel the heat of an approaching deadline.

They're opening the doors wider for more applicants in the second round when they weren't able to handle the volume of the first.

They're ignoring the commitments of time and money invested by good applicants into pursuing stimulus dollars for their communities while doing nothing to dissuade bad applicants from polluting the pool with bad projects.

And they're only tweaking the rules around the margins about who gets what and how when their are opportunities to pursue new ideas like fast-track partial loan guarantees that can make the whole system run better.

It's hard not to get down and feel bitter towards what appears from the outside as an exercise in government futility, especially as it's hard to see how things can get any better moving forward from here short of Congress waking up to how broken this system is and demanding that things get fixed.

But even on that front I hesitate as that would likely mean pushing back the date of getting dollars out the door even further. And yet I'm starting to wonder if that's our only hope of this money getting spent correctly. Maybe we should be considering demanding that Congress pull back on NTIA/RUS's reins, push out the date by which all money must be distributed, reexamine the progress (or lack there of) that's been made to date, and make sure we're spending money the right way in round two.

At this point, I'm really not sure how to move forward. What I do know, though, is that as an outside observer and a friend of many applicants, it's hard not to feel like NTIA/RUS are failing America in their handling of the broadband stimulus. I just hope it's not too late for this ship to be righted and set on a new course to a better tomorrow.

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