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Public PolicyRural Utilities Service

Making RUS Work

May 7, 2013

When Congress created the USDA Rural Utilities Service (RUS) Broadband Loan Program in the Farm Bill, the goal was to connect to the Internet those Americans living in small towns and hard-to-reach rural areas with insufficient access. By delivering federal funds, networks to communities that weren’t served by broadband providers could be built.

Unfortunately, the RUS has consistently failed at this important job and has instead repeatedly awarded funds to regions that are already well served by multiple private broadband businesses.  Meanwhile, the number of Americans without access to high speed Internet access now stands at 19 million, according to the FCC.  The bottom line is that the RUS program has lost sight of its primary mission: to deliver broadband services to unserved areas.

The USDA’s Inspector General has highlighted this problem through a series of reports and testimony before Congress by stating that RUS was “not maintain[ing] its focus on rural communities lacking preexisting service.”

The RUS insists that its March 2011 rules remedy problems with the stimulus program, but the fact is these rules still allow loans in areas that are 100 percent served.  Currently, there is no requirement that a single unserved household be included in the project’s service area in order to earn funding approval.

These problems are still present. In 2011 the Inspector General further confirmed this problem by saying that “[s]ignificant portions of [RUS] resources are funding competitive service in areas with preexisting broadband access rather than expanding service to communities without existing access.”  As recently as 2012, the Inspector General, providing guidance for reauthorization of the Farm Bill once again said, “We found that RUS had not maintained its focus on rural communities most in need of Federal assistance.”

During debate last year on the Farm Bill, the Senate accepted by voice vote an amendment sponsored by Sen. Warner (and co-sponsored by Sens. Kirk, Crapo, Shaheen, and Bennet), which made significant reforms to the RUS program. The amendment seeks to address the Inspector General’s major criticisms of the RUS program by requiring 25 percent of the households in an RUS broadband application to be unserved, though the threshold can be reduced in areas with fewer than 7,500 residents.

The Senate Agriculture Committee is likely to mark up the Farm Bill this week and we are hopeful the reforms made by the Warner Amendment will enable the program to provide funding to those Americans who need broadband access the most.  Without connecting this “last mile,” the benefits of fast Internet connections – from access to educational opportunities to support for small businesses and remote healthcare – may be lost on the communities that need it most.

NCTA has long supported government programs that fund the building of broadband networks in the small percentage of U.S. communities where these networks haven’t yet reached. We know the challenges inherent in delivering high-speed broadband to 300+ million Americans and we need to be sure we’re doing everything we can to optimize the private companies that successfully deliver it and to target limited tax dollars to those that truly need it.  When done right, government initiatives like the RUS program can contribute to getting all Americans connected.