DC Oversight Hearing on Stimulus Broadband Funding Includes Controversial Lake Co. Project

        A House Energy and Commerce subcommittee oversight hearing this morning in Washington will focus on “whether taxpayers are getting their money’s worth” out of $7.2 billion in broadband grants and loans under the American Recovery and Reinvestment Act of 2009 (ARRA).

Two northern Minnesota projects were singled out in the hearing memo for the House Energy and Commerce Subcommittee on Communications and Technology: a $1.7 million grant to the Leech Lake Reservation Business Committee and $66 million in federal loans and grants to Lake County, Minnesota.

Congressional investigators noted in the memo that the Leech Lake project was among a number of initiatives that “never got off the ground or have been halted. The Leech Lake Reservation Business Committee in Minnesota declined its $1.7 million grant on the grounds that it would not be able to meet its grant requirements.”

The Lake County project was highlighted as an example of a project that has raised industry concerns about possible overbuilding of existing systems instead of extending service to unserved areas as required by the terms of the federal funding agreement.

“Indeed, the Energy and Commerce Committee’s Subcommittee on Oversight and Investigations is already investigating recently publicized allegations by cable company Mediacom that the Lake County government in Minnesota is not only using $66 million in BIP funding to overbuild Mediacom, but committed fraud by misleading the RUS in its application,” according to the subcommittee staff memo.

The subcommittee will be examining why less than a dozen of the 233 “shovel-ready” projects awarded $4 billion by the National Telecommunications and Information Administration have been completed to date. Congressional investigators will also focus on the $2.5 billion Broadband Initiatives Program (BIP) administered by the Rural Utilities Service (RUS).

Among government officials expected to testify is Jonathan Adelstein, Administrator for the Rural Utility Service, a key player in the Lake County project.

The hearing on “Broadband Loans and Grants” will begin at 9 a.m. CDT in room 2123 of the Rayburn House Office Building.

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