Representatives of the Agriculture Department's Rural Utilities Service, or RUS, testified before the Senate Agriculture Committee this week on broadband penetration in Rural America. RUS Administrator Jim Andrew faced stern criticism from farm state lawmakers.
Ranking member Tom Harkin called on USDA to make more broadband loans available for rural communities and businesses.
"A town will have access in a small pocket but the rest of the town won't and that's the big problem." Sen. Tom Harkin (D - Iowa)
The RUS broadband program has come under fire recently from the USDA Inspector General. A September 2005 audit report stated "RUS has not satisfactorily implemented statutory requirements for serving rural instead of suburban areas."
One example from the report claimed RUS issued $45.6 million in loans to subdivisions near Houston, Texas. Andrew explained RUS is still a work in progress.
"We've appointed a group of people who have been studying this issue and one of the issues has to do with the final definition of what rural actually is." - Jim Andrew (USDA)
According to a 2006 Pew Research Center study, rural Americans still lag behind their urban and suburban counterparts for broadband access --- But broadband connectivity in rural America is expanding rapidly. While 3% of rural Americans had access to high-speed internet in 2001, that number jumped to 24% in 2005.
Increased broadband usage also has boosted internet provider competition. Representatives from three rural telecommunication providers questioned the program's methods. One representative called the RUS' policy of subsidizing competition against private companies a "waste of scarce resources."
"We talk about competition being good and it is in almost all cases. Competition is important. It's really important for the people who receive the competition but if money is allocated from the federal government to those community areas that might divert it from those unserved areas....it's a failure of the program to serve those people." Tom Simmons, Vice President of Public Policy for Midcontinent Communications