More than a year after Windstream (formerly Iowa Telecom) was awarded more than $17 million to build high-speed Internet connections to serve rural Iowans and create jobs in rural communities, none of the funds have been spent and not a single job created.
U.S. Department of Agriculture Secretary and former Iowa Gov. Tom Vilsack announced the job stimulus grants in August 2010, and Windstream was targeted to receive more than $120 million, including $12 million for work in rural Iowa.
The only project Windstream has commenced to date is in Mississippi where less than $3,000 of an estimated $1 million project near Florence has been completed.
The USDA's Broadband Initiatives Program (BIP) was part of the federal stimulus package intended to bring high-speed (broadband) service to rural areas while helping create jobs. Initial program requirements were for beginning construction within six months of the date of award with completion of all construction within three years of the award.
Facing congressional inquiries about waste in the program, questionable benefits provided by the program and lack of progress on projects across the country, the USDA last month held a special web seminar to try to determine why the effort has stalled.
"A survey of BIP projects was made through the GFR's (General Field Representatives) to determine reasons why BIP projects are not further along in construction and why more funds have not been drawn," according to the USDA presentation. "In some cases, more than one reason for a delay in construction or funds disbursements was cited, and in some cases the delays were not fully explained by the awardees."
Of the 320 projects totaling $3.529 billion awarded in August 2010, only four were listed by the USDA presentation as being completed. Those were in Alaska (Copper Valley Wireless and Supervision, Inc.), Hawaii (Big Island Broadband/Aloha Broadband), Minnesota/North Dakota (Halstad Telephone Company, two projects), and Oregon (Gervais Telephone Company).
Causes of the delays cited by the field representatives included: environmental reviews; contract approvals from USDA; legal/loan documentation; shortages of fiber optic materials; financing; regulatory issues; and waiting to submit final documents to avoid start of 3-year construction completion clock.
In addition to being concerned the program was failing to accomplish its basic goals, the USDA officials told participants the lack of progress could lead to those broadband funds being rescinded by Congress.
New Hampshire Congressman Bill Bass introduced and was able to get the U.S. House to pass a bill which would return "unused or reclaimed funds made available for broadband awards in the American Recovery and Reinvestment Act of 2009 to the Treasury of the United States 8." Under the bill, one of the reasons for return of the grant awards would be "insufficient performance."
Information on House bill sent to Senate.
See video below of Congressman Bass discussing the legislation in Congress.
One of the broadband projects proposed by Windstream for Logan, Iowa was opposed by the existing broadband provider in that area, Loganet/Jagwireless, which already has invested in technology to serve residents.
The Loganet president criticized the award last year, citing Iowa Telecom's (now Windstream's) reluctance to invest in the high-speed service until getting the government subsidy.
The Logan Internet provider said the benefits (number of businesses and residents who would subscribe to the service) were inflated by Windstream (Iowa Telecom) and do not justify the government subsidies. He said the USDA program money allocated Windstream could actually cost jobs his company provides in the Logan area.
