[Congressional Record (Bound Edition), Volume 153 (2007), Part 10]
[Senate]
[Pages 14375-14376]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            RURAL BROADBAND

  Mr. ROBERTS. Madam President, I rise today to speak about rural 
America, and the need to ensure that this cornerstone of our way of 
life has the same access and availability to modern technology that 
many Americans take for granted. Specifically, I am referring to the 
availability of high-speed Internet, also known as broadband.
  Broadband Internet is essential to rural development. It does for 
rural areas today what interstate highways did in the 20th century, and 
railroads did in the 19 century. It is key to attracting new businesses 
to rural areas, and helping our existing rural businesses grow and 
become more competitive.
  Unfortunately, rural America continues to lag behind its urban and 
suburban counterparts when it comes to the availability of this 
essential resource. It is not that rural folks do not want broadband, 
but only that they do not have as much access.
  In the 2002 farm bill, Congress created a loan and loan guarantee 
program to help build broadband out to rural areas that lacked this 
crucial service.
  The Rural Utilities Service, RUS, an agency within the U.S. 
Department of Agriculture, was charged with the responsibility of 
administering the broadband loan program and using it to promote access 
in unserved, rural areas.
  Unfortunately, the agency's implementation and administration of this 
program strayed from the rural focus Congress intended.
  Instead of targeting our rural areas, huge sums of money have been 
used to provide broadband in urban areas, suburban developments, and 
towns that already have service.
  Instances of waste and abuse have been clearly illustrated by the 
USDA inspector general, in hearings held by both the House and Senate 
Agriculture Committees, and in prominent news reports.
  There is wide, bipartisan agreement on what is wrong with this 
program. I believe that there should also be wide, bipartisan agreement 
on how to move forward.
  While a number of legislative and regulatory fixes have been 
suggested here in Congress and by the RUS, none so far have been 
comprehensive enough to surmount the challenges of deploying broadband 
in rural America.
  I have been proud to reach out to my friend and colleague, Senator 
Salazar of Colorado, on the Senate Agriculture Committee to work toward 
a solution. It is the Committee on Agriculture that has jurisdiction 
over this program, and it is from this committee that a way forward 
must be found.
  Together, myself and the distinguished junior Senator from Colorado,

[[Page 14376]]

have worked toward a consensus driven, comprehensive approach to 
promoting broadband in rural America. On Monday of this week, we 
introduced legislation to accomplish this goal, the Rural Broadband 
Improvement Act of 2007.
  This legislation will provide the secretary with additional guidance 
to direct broadband loans to those truly in need by clarifying where, 
when, and to whom loans can be made. It ties approval of loans to a 
requirement of nonduplication of service, making this legislation 
significantly more robust and less ambiguous than the current statute.
  The issue of duplication of service, more than any other issue, has 
been the subject of criticism of the RUS. When RUS makes loans in areas 
that already have broadband service, it has a twofold negative affect.
  First, it undermines the market. Often, rural towns may enjoy 
broadband availability. Small, independent providers that are already 
present in rural towns have their subscribers pulled out from under 
them by a competitor who, because they have an RUS loan, have an unfair 
advantage with which to offer lower rates. This can threaten the very 
existence of some locally owned, independent broadband providers that 
invested in rural towns without an RUS loan.
  Second, when loans are going to areas that already have service, it 
means that truly unserved, rural areas for which this program was 
created continue to be neglected. Indeed, it is the outlying, sparsely 
populated areas that are in need of broadband service. These are the 
areas broadband loans should be made to serve--not overbuilding towns 
where the service is already present.
  This is unacceptable. That is why this legislation which I am 
introducing on behalf of myself and my colleague from Colorado will 
attach to the definition of eligible rural community, a clearly defined 
requirement of nonduplication of broadband service.
  Reforming and improving the broadband loan program means doing more 
than just addressing this one aspect for which it has been criticized. 
It also means eliminating unnecessary and unprecedented limitations on 
what borrowers are eligible to participate.
  In particular, I am referring to the conspicuous 2 percent telephone 
subscriber line limit. This limitation acts as a disincentive for 
growth; unnecessarily penalizes larger, but still rural-focused phone 
companies; and ignores the reality that more and more households are 
abandoning land line subscriptions in favor of wireless communication. 
The bottom line is that limiting what providers can participate in the 
program does nothing to expedite broadband deployment in rural areas.
  This legislation also streamlines the application and post-
application requirements. For many small and independent providers with 
limited staff, it can be discouraging to look at a 38-page application 
guide to a 57-page application. What's more, those who go through this 
arduous process may wait for a seemingly indefinite period of time for 
a yes or no to whether their application is approved.
  To address these matters, the act directs the Secretary to complete 
application processing within 180 days and allows parent companies and 
their wholly owned subsidiaries to file a single, consolidated 
application and post application audit report.
  The bill further streamlines the application process by eliminating 
various other duplicative and burdensome application requirements, and 
directs the agency to hire whatever additional administrative, legal, 
and field staff are necessary to meet these requirements.
  The act also contains powerful incentives to increase the feasibility 
of loans. First, it allows limited access to towns where broadband may 
be available, but in circumstances when doing so is necessary to 
building broadband out to the sparsely populated and outlying areas 
that have no service at all. I do want to stress, however, that this is 
not a loop-hole that will lead back to the problems of duplication and 
overbuild. The majority of households to be served by the project 
financed with an RUS loan must be without access to broadband. 
Additionally, the act creates better transparency and requires 
incumbent providers to be properly notified when an RUS applicant plans 
on doing so.
  Second, the act ensures that collateral requirements are commensurate 
to the risk of the loan.
  Third, instead of requiring an inflexible 20 percent equity 
requirement, the act provides more flexibility for small and start up 
companies by requiring only 10 percent equity, and allowing the agency 
to waive this requirement so long as the applicant can prove that it 
will be able to pay back the principal of the loan plus interest.
  This legislation also codifies an innovative grant program based on 
the successes illustrated in the Commonwealth of Kentucky. Broadband 
deployment in rural areas will work better once we know where it 
already is. To do this, grants will be made available to help fund 
partnerships between state governments and the private sector to map 
where broadband is available in rural areas, and conduct outreach to 
areas where it is still unavailable.
  I and my colleague, Senator Salazar, have always shared a concern for 
our rural citizens. I am proud to work with my neighbor to the west on 
this issue, and I look forward to working with my other colleagues on 
the Senate Agriculture Committee as we begin work on the 2007 farm 
bill.

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