Adelstein testifies before Senate Committee

Flexibility needed to fund infrastructure bills, Adelstein testifies

Adelstein testifies before Senate CommitteeCongress should give itself flexibility to bring broadband services to more people, much like then-Vice President Joe Biden told the Rural Utilities Service (RUS) to give itself “freaking flexibility” in its 2009 plan to bring broadband to more communities, WIA President and CEO Jonathan Adelstein told the Senate Commerce Subcommittee on Communications, Media and Broadband. The hearing, chaired by Sen. Ben Ray Luján (D-N.M.), and Ranking Member Sen. John Thune, (R-S.D.), discussed how the federal government can support deployment of resilient broadband and telecommunications infrastructure.  

Adelstein oversaw the Broadband Initiatives Program as Administrator of the RUS at the Department of Agriculture (USDA) for the Obama-Biden Administration. “I am very familiar with financing fiber to the premise” as most of the projects RUS approved under the Recovery Act were fiber wireline, he said. Adelstein’s office was searching for shovel-ready projects because the U.S. economy was in a recession at the time. “Funding was going out the door more slowly than the White House wanted to see.” Ultimately Adelstein said once they eased the rules, the program took off. “The guidance Vice President Biden shared was as clear as it was sound: ‘Give yourselves more freaking flexibility.’  I will never forget those words – which is a direct quote, not a PG-rated version – because they became our motto as we made policy cuts in the second round.  When deliberating on decisions, I often called for more ‘freaking flexibility.’  

“Vice President Biden’s advice proved wise.  We made major changes in the second round, including the mix of grants and loans, that were critical to the success of the program.  It is a heretofore unreported fact that RUS had almost more funding than it had qualified projects.  RUS received $28.965 billion in total applications for grants and loans that resulted in $3.529 billion RUS ultimately awarded.  Yet, in the final process, almost every award that passed both our financial feasibility and our technical feasibility screens won funding – with only a handful that could have met those screens left at the end of the process.  In other words, only about one in eight projects penciled out as technically and financially feasible.” 

Going forward with new broadband funding under the American Jobs Act, Congress should adopt a flexible approach that includes fixed and mobile wireless, as well as fiber, Adelstein said. Dictating uplink and downlink speeds would preclude wireless broadband from being included in funding. Yet, Americans want mobility along with broadband access. As such, Congress should set funding agencies’ goals and not set technological gating factors, Adelstein said.  Otherwise, Congress may tie funding agencies down with limited flexibility to even consider innovative, cost-effective, and geographically appropriate provider applications that would have likely met congressional priorities or have met them sooner.  

Rather than cementing specific broadband speeds in statute, Congress can direct agencies to consider priority factors, including the following based on congressional and administration goals: 
Wireless delivers: 

  • Mobility 
  • Speed of Deployment 
  • Cost Efficiency 
  • Public Safety 
  • Targeting Unserved Areas 
  • Affordability 
  • Resiliency 
  • Download and Upload Speeds 
  • Battling Climate Change 

Agencies should prioritize funding to the operators that are best positioned to address the service priorities specified.  Those operators will have to be able to demonstrate that their plans are both financially and technically feasible. “The way telecommunications networks are structured geographically, typically only providers already serving an area or with existing infrastructure in the region are interested in or capable of expanding to the most hard-to-reach areas,” Adelstein noted. Finding feasible projects is difficult, especially in rural and less densely populated areas. Even if Congress pays 100 percent of the capital expenses, problems can still occur because of ongoing operational expenses.  

“I am concerned that if Congress does not provide implementing agencies with needed flexibility, it will find that for many areas, no qualified applications will come in the door and areas will remain unserved.  Worse, if financially infeasible projects are nevertheless approved, the networks will be unsustainable, and consumers will lose the quality of service or end up having no service at all.  If overly prescriptive technological parameters are sealed in statute, it may be too late to for Congress to change course, as we did at RUS in the second round.” 

Adelstein commented that applications are provider specific and geographically specific.  “Two areas similar in geography and density may not have similarly strong providers or existing networks from which to extend further into rural areas.  For example, there may be an area in West Virginia that is similarly rugged and sparsely populated to one in Montana.  However, one might have a local cooperative that has long invested in building out fiber connectivity, with a solid balance sheet girded by years of RUS and Universal Service funding, while the other has not benefited from similar investments in infrastructure or have a similarly strong local provider.  One might offer a feasible project proposal while the other does not — or one area may not even get a qualified application to serve it.  If Congress does not provide the funding agencies flexibility to take in the door a wider variety of proposals, one area may go unserved – or worse, become unserved when the provider is unable to cover its costs due to limited ongoing customer revenues after it is built at taxpayer expense.” 


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