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Cable interests sue to change USDA broadband loan program

Wed, 05/31/2006 - 8:04am
Brian Santo, CED

The Iowa Cable and Telecommunications Association (ICTA) and Mediacom Communications are suing the U.S. Department of Agriculture (USDA) to reform a loan and grant program criticized for failing to fulfill its primary objective to bring broadband services to rural areas where residents lack access to high-speed Internet service.

The Broadband Grant and Loan Program is administered by the Rural Utilities Service (RUS), an arm of the USDA. The suit was filed in the U.S. District Court for the Southern District of Iowa. Midcontinent Communications, which operates in the Dakotas, recently criticized the program in congressional testimony.
 
The suit argues that the primary purpose of the RUS loan program is to spur deployment of high-speed Internet service in rural, unserved areas, rather than providing government subsidies to new entrants into the competitive cable television business.

"We strongly support the goal of bringing high-speed Internet service to unserved areas and we know there are places where the government should step in to fill a legitimate void. But in this program, many voids remain unfilled because tax dollars have been redirected to areas where consumers already benefit from competition and choice in broadband service," said Ed Pardini, Mediacom's SVP for the North Central Division. 

Funding competitive services in suburban areas is explicitly directed as a secondary objective in the program's marching orders, a point elided even by government auditors of the program.

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