May 6, 2013
U.S. Senate
Washington, D.C.  20510

Dear Senator,

On behalf of the more than one million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I urge you to eliminate the Department of Agriculture’s (USDA) Rural Utilities Service (RUS) broadband loan program.  The RUS has long outlived its original purpose and now spends lavishly on broadband expansion projects that compete with private sector providers.  

In lieu of full repeal of this outdated program, the very least the current Congress can do is to include in the 2013 Farm Bill the final language of Section 6104 from the Senate-passed 2012 Farm Bill.  This provision would strengthen restrictions on eligibility by limiting the RUS broadband service project grants or loans to those areas of the country where 25 percent or more households are unserved or have service below the minimum acceptable levels of broadband service.  By limiting the program to unserved communities, this language would help reduce the amount of federal loans and grants being used for overbuild and duplicative broadband projects.

Despite claims that the March 2011 RUS rules address the recurring problems cited by the USDA’s Office of Inspector General, CCAGW has concerns that the program may be continuing to fund new loans for overbuilds and duplicative services.   The OIG has repeatedly pointed out RUS’ history of overbuilding and offering duplicative services in areas that are served by existing providers.  A September 2005 report noted that “RUS has not maintained its focus on rural communities without preexisting service.  Although the language of the law specifies that these Federal loans and grants are for rural communities, RUS has codified and implemented a definition that cannot reliably distinguish between rural and suburban areas… Furthermore, we question whether the Government should be providing loans to competing rural providers when many small communities might be hard pressed to support even a single company.  In these circumstances, RUS may be setting its own loans up to fail by encouraging competitive service; it may also be creating an uneven playing field for preexisting providers operating without Government assistance.”

As discussions about a new Farm Bill heat up amid the nation’s growing budget crisis, members of Congress must use this legislation and other opportunities to address duplication, cut wasteful spending, and reform outdated programs.  Failure to eliminate the antiquated RUS altogether or, at least, to preserve the language of Section 6104 from the Senate-passed 2012 Farm Bill would result in taxpayers being stuck with unnecessary and excessively expensive burdens into the foreseeable future.

The RUS programs pick winners and losers in already competitive marketplaces at the taxpayers’ expense.  All votes pertaining to the RUS will be among those considered in CCAGW’s 2013 Congressional Ratings.  

Sincerely,

Tom Schatz,
President, CCAGW