The process for selecting companies that get broadband stimulus funding is already stacked against cable companies, and it just got worse, according to the American Cable Association.
The Rural Utilities Service (RUS) is part of the U.S. Department of Agriculture and one of the governmental agencies that dispenses broadband stimulus grants (the other is the NTIA). The RUS has multiple criteria in a formalized system for deciding who gets those grants. Meeting a criterion earns a certain number of points on a 100-point scale.
One of the criteria is ever having borrowed funds under Title II of the Rural Electric Act of 1936. The overwhelming majority of companies to have done so are traditional phone companies.
Having done so used to be good for five points on the scale, and the ACA complained months ago that that gave too much weight to traditional phone companies at the expense of cable companies. The ACA recommended dropping the points for borrowing money under the 1936 program from five to one.
Instead, the RUS has decided to increase the points awarded on that measure from five to eight, further weighing against cable companies.
Adding insult to injury, the ACA feels, RUS plans to set aside $100 million in grants specifically for satellite broadband targeted at rural unserved areas.
The ACA said it is “disappointed that NTIA and RUS structurally modified the programs in a way that makes it harder for small cable providers to receive last-mile funding," ACA President and CEO Matthew Polka said. "The rules seem to favor every entity except small cable operators, who are well-positioned to deliver state-of-the-art broadband facilities in rural and remote communities at low costs. Not surprisingly, we will be closely monitoring the implementation of the programs to ensure that small cable operators are not unfairly treated."
The ACA filed its objections in a letter sent Feb. 2 to Assistant Commerce Secretary and NTIA Administrator Lawrence Strickling and RUS Administrator Jonathan Adelstein.
“The American taxpayer will be disappointed to learn that the program was changed to give greater priority to awarding particular segments of the telecommunications industry with broadband funding over equally or better-qualified applicants, including ACA members, that could provide the same broadband service at a lower cost," Polka said.