Recovery Act: Broadband Programs Are Ongoing, and Agencies' Efforts Would Benefit from Improved Data Quality
Published: 2012-09-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Access to affordable broadband service is seen as vital to economic growth and improved quality of life, yet residents in many areas of the country lack access to or do not use broadband. To extend broadband access and adoption, the American Recovery and Reinvestment Act of 2009 (Recovery Act) provided over $7 billion to NTIA and RUS for grants or loans to support broadband projects. NTIA and RUS made all awards by September 30, 2010.
This report responds to mandates under the Recovery Act for GAO to examine the use of Recovery Act funds and report on the quarterly estimates of jobs funded. This report addresses (1) the progress of broadband projects, (2) their effect on expanding access to and adoption of broadband, and (3) any challenges awardees face in completing projects and agency actions to address these challenges. GAO analyzed program documentation and data and interviewed agency officials and BTOP and BIP awardees.
section_title: What GAO Found
paragraphs: The progress of the broadband projects is difficult to measure because of data limitations. As projects progress, the National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) disburse awarded funds to projects on, for example, a reimbursement basis. As of July 2012, NTIA has disbursed approximately $1.9 billion of the $3.8 billion it awarded for projects under the Broadband Technology Opportunities Program (BTOP), and as of June 2012, RUS has disbursed approximately $1 billion of the $3.3 billion it awarded for projects under the Broadband Initiatives Program (BIP). These disbursements are one measure of progress, and the disbursements indicate that the projects in aggregate are less than half complete. However, disbursements sometimes lag behind actual progress for a number of reasons, such as contracts that provide for payment after work is completed. In addition, the agencies have been inconsistent in collecting non-financial data on project progress. While NTIA has collected data on BTOP projects, RUS did not collect data until recently. According to NTIA data, 76 percent of planned network miles are complete. According to RUS, the data it has recently collected are not reliable measures of fiber miles and wireless access points deployed by BIP projects. Without reliable information on the progress of BIP projects in expanding infrastructure, RUS may struggle to demonstrate the progress and effectiveness of the BIP program.
Data limitations make it difficult to fully measure the effect of BTOP and BIP on expanding access to and adoption of broadband. NTIAs non-financial data indicate that BTOP awardees have established over 57,000 new or upgraded network miles, with connections to over 8,000 community anchor institutions, such as schools, libraries, and hospitals, and nearly 34,000 new computer workstations for use in public computer centers, such as libraries. RUS initially did not collect comparable non-financial data for BIP projects, and the data it has are not reliable; therefore, it is not possible to fully assess the effect of BIP on expanding access to broadband. With respect to broadband adoption, however, both NTIA and RUS have faced difficulties collecting reliable data from awardees on subscribership for BTOP and BIP projects. Both agencies have taken steps to address this issue, with NTIA providing guidance to awardees and RUS developing a tool for staff reviews of subscribership data reported by awardees.
Both NTIA and RUS helped awardees address multiple challenges in completing their broadband projects. Specifically, awardees identified challenges complying with regulations and obtaining permits, as well as handling construction-related issues such as broadband fiber shortages. BTOPs non-infrastructure projectswhich provide computers to libraries or encourage broadband adoptionfaced a different set of challenges, including staffing, contracting, and procurement. NTIA and RUS have taken a number of actionsincluding providing regular contact and expertise, webinars, and guidanceto help awardees address these challenges. In addition, RUS hired additional staff to address delays in its review and approval of contracts, a challenge that delayed some BIP projects.
section_title: What GAO Recommends
paragraphs: To ensure RUS is collecting reliable information regarding the effect of its investments in broadband, GAO recommends that RUS take steps to improve the quality of its data on the number of fiber miles and wireless access points created by BIP projects. RUS disagreed with GAOs characterization that it does not collect adequate data, and stated it has already taken steps to improve data quality. GAO believes that more reliable data will permit RUS to better assess the progress of the BIP program.

section_title: Letter
paragraphs: Access to affordable broadband telecommunicationsviewed as vital to long-term economic growth and improved quality of life,  just as electricity, telephone, and the interstate highway system filled  similar roles in previous generations. The ability to share large amounts of  information at ever-greater speeds increases productivity, facilitates  commerce, and drives innovation. Furthermore, broadband can improve  citizens’ quality of life. For example, broadband technology makes it  possible for a patient to visit a local clinic and receive medical attention  from specialists hundreds of miles away, for a student to access  information not available from the local library, and for a firefighter to  download blueprints of a burning building. Broadband is particularly  critical in rural areas, where advanced communications can reduce the  isolation of remote communities and individuals.
To extend access to broadband throughout the United States, as well as  to stimulate the economy and create jobs, Congress appropriated $7.2  billion for broadband programs under the American Recovery and  Reinvestment Act of 2009 (Recovery Act), enacted on February 17,  2009. This $7.2 billion included: $4.7 billion for the Department of Commerce’s National  Telecommunications and Information Administration (NTIA) to create the  Broadband Technology Opportunities Program (BTOP) to award  competitive grants to a variety of entities for broadband infrastructure,  public computer centers, and innovative projects to stimulate demand for  and adoption of broadband. $2.5 billion for the Department of Agriculture’s Rural Utilities Service  (RUS) for the Broadband Initiatives Program (BIP) to provide loans,  grants, and loan/grant combinations for broadband infrastructure projects  primarily in rural areas.
The agencies made all awards by September 30, 2010. As of July 2012,    there were 225 BTOP awards comprising $3.8 billion in awarded funds. As of June 2012, there were 263 BIP projects comprising $3.3 billion in  awarded funds.
Nearly 2 years have passed since all BTOP and BIP Recovery Act  awards were made; thus, this review provides an opportunity to assess  the status of the projects. This report is part of GAO’s ongoing efforts to  monitor Recovery Act programs and builds on our prior reports reviewing  BTOP and BIP. In particular, we examined: (1) What progress has been  made implementing broadband projects funded by the Recovery Act? (2)  What effect, if any, have these projects had on expanding access to and  adoption of broadband service? (3) What challenges, if any, do grant and  loan recipients face in completing broadband projects and what actions  have the agencies taken to help address these challenges? The  information provided in this report and in appendix II responds to two  recurring mandates in the Recovery Act. The first, which we respond to  as part of this report, requires that we review bimonthly, the use of  Recovery Act funds by recipients. The second, which we respond to in  appendix II, requires us to comment and report quarterly on estimates of  jobs funded and counted as full-time equivalents (FTE), as reported by  recipients of Recovery Act funds.
To address our objectives, we reviewed program data collected by NTIA  and RUS, interviewed agency officials and program awardees, and  reviewed relevant documentation. Specifically, to determine the progress  made implementing broadband projects, we analyzed the data collected  by NTIA and RUS on the total funding awarded and the amount of funds  disbursed to each project. We also reviewed NTIA’s data on the progress  made in meeting BTOP’s program targets related to deploying  infrastructure; RUS did not collect comparable data until recently, and  could not assure the quality of its data. To assess the effect of the  projects on expanding access to and adoption of broadband service, we  analyzed the data reported by BTOP awardees on the number of network  miles deployed (which can include miles of broadband fiber and non-fiber  miles, such as microwave links), institutions connected, computer  workstations installed in public computer centers, and broadband  subscribers. We also interviewed BTOP and BIP awardees to understand  the effects of their individual projects; we selected awardees to interview  that varied in progress (gauged by the percentage of their total award that  had been disbursed), and that were geographically dispersed. We also  selected awardees who received large awards. To determine the  challenges that grant and loan recipients face in completing projects, we  interviewed NTIA and RUS officials, as well as BTOP and BIP awardees.  We also reviewed BTOP awardees’ progress reports for the first quarter  of 2012, in which awardees noted challenges or issues they were facing  in achieving planned progress. For BIP, we reviewed a tracking  spreadsheet maintained by RUS where agency officials note the status of  each BIP project and, in some cases, would note issues or challenges  facing individual projects. To determine the reliability of the data used in  this report, we reviewed relevant documentation, including manuals,  guidance, and forms provided to awardees reporting the data,  descriptions of internal controls, and Inspector General reviews of the  data from the Department of Agriculture and the Department of the  Treasury (which manages the payment system used by BTOP recipients).  We also interviewed agency officials about their processes for reviewing  the data and ensuring their accuracy. We found the data generally  reliable for our purposes and note the limitations of the data where  appropriate. For more information on our scope and methodology, see  appendix I.
We conducted this performance audit from November 2011 through  September 2012 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: In addition to being administered by different agencies, BTOP and BIP  differ in several ways, including in methods for providing funding to  awardees, types of awardees funded, and services funded through the  programs. NTIA funded a range of organizations from states and  municipalities to non-profit and commercial organizations, whereas RUS  made BIP loans, grants, and combinations of loans and grants primarily  to private-sector entities, including for-profit companies and cooperatives.  In addition to funding infrastructure projects, BTOP funded public  computer center (PCC) projects and sustainable broadband adoption  (SBA) projects. Also, the vast majority of BTOP’s infrastructure awards  were investments in “middle-mile” infrastructure projects, which provide a  link from the Internet backbone to the last mile networks of local providers  (such as cable or phone companies) that provide broadband service to  end users. The availability of broadband service to end users depends  upon access to adequate middle-mile facilities, which can be costly to  deploy in rural areas. In contrast, BIP primarily funded “last-mile”  infrastructure projects that provide service directly to end users. Table 1  provides more detail about the BTOP and BIP programs, including the  current number of projects and the amount of funding they represent.
NTIA and RUS solicited applications to the programs and made awards in  two rounds, with the first funding round beginning in June 2009 and  ending in April 2010, and the second round beginning in January 2010  and ending in September 2010. In the joint Notice of Funds Availability,  NTIA and RUS provided that projects should be substantially complete  within 2 years of receiving an award. The agencies disburse awarded  funds as projects progress. To meet the substantially complete  requirement, a project must receive two-thirds of its award 2 years after  receiving the award. NTIA and RUS also provided that projects should  be complete within 3 years of receiving an award. In October 2011, RUS  modified these requirements to provide that BIP projects must commence  within 180 days of the latter of the completion of the project’s historic  preservation or environmental review, and be fully complete no later than  June 30, 2015. NTIA maintained the original requirements. Since NTIA  made several rounds of awards, the 3-year completion deadlines for the  projects are staggered throughout 2012 and 2013. Table 2 shows the  various deadlines, and the number of BTOP projects subject to that  deadline.
NTIA and RUS must oversee BTOP and BIP projects, respectively,  through each program’s completion. NTIA and RUS both have officials  monitoring the overall progress of the programs and reviewing requests  for funds. In addition to these officials, the agencies also provided staff to  serve as the primary point-of-contact for their awardees and answer  questions and address issues that arise for specific awardees. NTIA’s  Federal Program Officers (FPO) provide this assistance to BTOP  awardees; RUS’s General Field Representatives (GFR) serve the same  role for BIP awardees. In addition, BTOP and BIP awardees face a  variety of reporting requirements. For example, the Recovery Act requires  fund recipients, including BTOP and BIP awardees, to submit quarterly  reports that provide a description of their projects or activities, the  progress of their projects, and estimates of the number of resulting jobs  funded, measured on a FTE basis.awardees submit quarterly and annual progress reports to the agency  that provide financial data and information on the projects’ status and  effects. RUS requires that BIP awardees submit quarterly reports that  provide subscribership data, and according to RUS, these efforts also  include financial statements consisting of income statements, balance  sheets, and cash flow statements.
section_title: The Progress of Recovery Act Broadband Projects Is Difficult to Measure because of Data Limitations
paragraphs: NTIA and RUS both use the amount of funds disbursed to awardees as  one method of tracking progress, and less than half of all the awarded  funding has been disbursed to Recovery Act BTOP and BIP awardees.  BTOP awardees appear to have made more progress than BIP  awardees, as NTIA has disbursed half of BTOP’s funds while RUS has  disbursed less than one-third of BIP’s funds. However, the agencies  disburse awarded funds for projects as payment becomes due,  sometimes only as contracts are complete. Because disbursements do  not fully reflect the amount of work completed, NTIA has established  other non-financial indicators of progress, such as network miles  deployed. In contrast, RUS did not initially establish indicators to measure  the deployment of infrastructure.
subsections: section_title: Amount of Funding Disbursed as an Indicator of Progress
paragraphs: As awardees implement their projects, they request funds from the  agency administering their award. NTIA and RUS track how much of each  project’s award that they have disbursed to the awardee, which serves as  one indicator of progress. The data that NTIA and RUS collect indicate  that the agencies have disbursed less than half of all awarded funds. Of  the roughly $3.8 billion available for the BTOP projects, NTIA has  disbursed approximately $1.9 billion (50 percent) to its awardees. As  noted in figure 1, disbursements to NTIA’s infrastructure projects  comprise $1.6 billion of BTOP’s disbursed funds, while disbursements to  public computer center and sustainable broadband adoption projects total  $290 million. Of the roughly $3.3 billion available for the BIP projects,  RUS has disbursed approximately $1 billion (30 percent) to its awardees.
Our analysis of the disbursements indicates that BTOP awardees have  made more progress than BIP awardees. Sixty-eight percent of BTOP  awardees have received more than half of their awarded funds, versus 24  percent of BIP awardees. The fact that the BTOP program includes non- infrastructure projects, such as public computer center and sustainable  broadband adoption projects, may partially explain this disparity; NTIA  officials noted that since most of these non-infrastructure projects are not  required to undergo an environmental assessment, they tend to progress  more quickly than the infrastructure projects. See table 3.
Of the BTOP projects that have reached the 2-year target to be  substantially complete, more than half have received two-thirds of their  total award. As previously mentioned, NTIA provided that BTOP projects  should receive two-thirds of their total award within 2 years of receiving  the award. There are 102 projects that started before August 2010 and  thus have reached the two-thirds benchmark in terms of project time  elapsed. Of these 102 projects, 61 have received two-thirds of their  awarded funds as of July 2012. NTIA officials told us that in cases where  a project does not meet the two-thirds complete threshold, NTIA program  officers follow up to determine whether the project is delayed, or whether  disbursements are not reflecting the amount of work completed, as  mentioned above. In these cases, program officers will conduct a hands- on review, which helps NTIA determine whether the project needs a  performance improvement plan with specific actionable recommendations  to get the project back on track.
While disbursements are one measure of progress, officials from NTIA  and RUS told us that disbursements do not fully reflect the amount of  work completed. NTIA and RUS disburse awarded funds for projects as  payment becomes due, sometimes only as contracts are completed. Thus  disbursements do not fully reflect the amount of work completed at any  point in time. NTIA officials noted that in some cases, awardees have  entered into contracts that are structured so that the awardee does not  pay the contractor until the bulk of construction is complete. For example,  one awardee we interviewed noted that although the project was 95  percent complete, it had only received 65 percent of the project’s funding,  giving the incorrect impression that the project was behind schedule. In  our review of BTOP awardees’ first quarter 2012 reports to NTIA, we  found that some recipients cited this issue when reporting their financial  progress in the quarterly reports. Others noted that cost savings made  their disbursements appear as if the project were behind schedule, but  that was not the case. In other words, a project that is on schedule but  incurring costs below the levels anticipated in its original plan could  appear to be behind schedule, since its disbursements will be lower than  expected.
section_title: Non-Financial Indicators of Progress
paragraphs: NTIA established other non-financial performance measures that show  that awardees have made progress in implementing their projects.  Specifically, NTIA established performance metrics for measuring BTOP’s  progress against key performance indicators, such as the number of  network miles deployed and leased, community anchor institutions  connected, new workstations in public computer centers, and new  broadband subscribers. NTIA established the baselines for these key  performance indicators by aggregating the information awardees provided  in their applications to the program, and provided program targets to the  Office of Management and Budget (OMB). NTIA tracks progress against  these indicators and reports that as many as 76 percent of network miles  are complete and more than 97 percent of new workstations are  complete. These results, when compared with the amount of funds  disbursed, are consistent with NTIA’s statements that in some cases,  disbursement of funds lags behind progress of projects.
RUS is collecting data on subscribers to show the effect of BIP on broadband adoption,  which we discuss later in this report. However, we do not consider this a measure by  which one can evaluate the progress of a project toward completion. disbursed, the project is built, and the agency is repaid, instead of  tracking project outcome information. In addition, the Recovery Act did  not require RUS to collect performance metrics from awardees.  Nevertheless, the Recovery Act sought to provide an unprecedented level  of transparency with respect to how funds were being spent and program  outcomes were being achieved, and we have noted the importance of  collecting complete, accurate, and consistent data to document program  performance. In June 2012, RUS officials told us that they began tracking  the number of fiber miles and wireless access points deployed by BIP  projects; however, they could not ensure the quality of the data at that  time. Without reliable information on the progress of BIP projects in  expanding infrastructure and moving toward completion of projects, RUS  may not be able to demonstrate the progress and effectiveness of the BIP  program.
section_title: NTIA Has Expanded Access to Broadband through BTOP Projects; However, Data Limitations Make it Difficult to Measure the Effects of BTOP and BIP on Broadband Adoption
paragraphs: NTIA collects data on network miles deployed, community anchor  institutions connected, and workstations added at public computer  centers, which helps illustrate that BTOP expanded broadband  infrastructure and provided increased access to the public. As previously  mentioned, RUS did not begin collecting this type of information until this  year and cannot assure the quality of the data; thus, BIP’s contribution to  these goals is less clear. Both NTIA and RUS face challenges in ensuring  the quality of subscribership data, and therefore, it is difficult to measure  the effect of BTOP and BIP on broadband adoption.
subsections: section_title: BTOP Expanded Infrastructure and Provided Access at Public Computer Centers
paragraphs: As previously mentioned, the current goal of BTOP’s Comprehensive  Community Infrastructure (CCI) projects is to deploy or upgrade 75,000  miles of broadband infrastructure and provide broadband access to  15,000 community anchor institutions, such as schools, libraries, health  care providers, and public safety entities. As of March 31, 2012, BTOP’s  117 infrastructure projects reported that they have established over  57,000 new or upgraded network miles, with connections to over 8,000  community anchor institutions. See table 4.
As shown in table 4, BTOP projects report several different types of miles  of broadband infrastructure:  “Network miles installed” includes newly constructed miles, such as new  aerial or buried fiber, built using BTOP funds.   “Network miles leased” includes new network capacity acquired via lease  using BTOP funds.   “Existing network miles upgraded” refers to existing capacity that was  upgraded using BTOP funds.   “Existing network miles leased” refers to capacity that was acquired from  a third-party prior to BTOP and that is being used or improved using  BTOP funds.
In our discussions with BTOP awardees, they explained how their  individual projects expanded broadband access in their communities. For  example, one awardee who received BTOP and BIP funds explained that  the majority of the areas served by its projects did not have broadband  service, with one community lacking basic telephone service. The  awardee added that as broadband expands in the area, the local  economy has benefited as tourism-oriented businesses are better able to  provide Web sites and online reservation systems. Another awardee  noted that its project serves some areas that previously had broadband  service; however, the choice of service provider was limited, and the  broadband options were generally expensive and slow. This awardee  reported that its BTOP-funded infrastructure improved broadband speed  for community anchor institutions, including schools, community colleges,  and health care providers, from 1 gigabyte per second to 10 gigabytes  per second.
Interviewees also reported that the public computer center (PCC)  program expanded access to broadband in their communities. BTOP’s 65  PCC projects have deployed new workstations (computers) at multiple  locations, such as community colleges and public libraries, throughout a  city or state. For example, the New Jersey State Library reported that its  PCC project has deployed 845 computers to 124 public libraries, and 128  laptops that community colleges use to provide workforce development  courses to the public. Some public computer centers also received  upgraded broadband connections and wireless routers. Officials from the  State Library of Louisiana noted that residents will use wireless hot spots  in the library to access the Internet from their own devices, adding that  one woman brings her children to the library parking lot after hours so that  they can access the signal and work on their homework when the library  is closed. In addition, PCC projects have installed workstations designed  to be accessible by users with visual impairments. The workstation in  figure 2 includes software that reads aloud what is on the computer  screen, screen magnification software, and a desktop magnifier that  enlarges materials placed under it. As of March 2012, PCC awardees  reported that they provided nearly 34,000 new workstations for public  use.
PCC projects have also provided classes on a variety of topics, including  English as a second language, digital literacy, and job training. Officials  from the New Jersey State Library project noted that while they initially  targeted people with limited or no computer skills and provided basic  computer training, they encountered unexpectedly high demand and  expanded course offerings to reach recent college graduates, those with  managerial experience, as well as offering additional resources for small  businesses and entrepreneurs. We visited classes in Louisiana and  Washington, D.C., and observed participants learning software programs.  The State Library of Louisiana noted in its first quarter 2012 report that its  various training programs had over 19,000 participants. During our visit,  we observed a training class, and participants stated that they had driven  several hours to attend some classes, and wanted to attend more. For  more information see, the sidebar titled “Example of PCC Project: State  Library of Louisiana.”
section_title: Measurement and Data Limitations Make It Difficult to Assess the Programs’ Effects on Broadband Adoption
paragraphs: NTIA and RUS have faced difficulties in ensuring that awardees provide  reliable data regarding broadband subscribership for their BTOP and BIP  projects, which makes it challenging to fully and accurately determine the  effects of the programs on broadband adoption. NTIA’s sustainable  broadband adoption (SBA) projects were established to stimulate demand  for broadband Internet access, and applicants were required to describe  how they would calculate subscribership for their projects. For example,  the SBA project Computers for Youth/Los Angeles Unified School District  Broadband Engagement Program provides 4-hour workshops in high- poverty Los Angeles schools, during which it provides hands-on, bilingual  training to sixth-grade students and their families on using broadband for  educational purposes. The participants receive a free computer pre- loaded with educational software as well as access to toll-free bilingual  help-desk support, and Computers for Youth conducts a survey before  and after the workshop to determine whether the families subscribed to  broadband service after attending the workshop. Computers for Youth  stated in its first quarter 2012 report that over 30,000 participants  (students and their parents) had attended a family-learning workshop  during the course of its program and that nearly 5,000 households had  newly subscribed to broadband. Program officials noted that by  highlighting the relevance of broadband to children’s education and  offering free computers and technical support, they were able to generate  broadband subscribers despite the lack of discounted broadband service.
Although current data reflect an increase in subscribers as a result of  BTOP projects, they may not be accurate. As of March 31, 2012, SBA  projects reported that they generated over 334,000 broadband  subscribers. However, NTIA officials told us that many recipients have  faced difficulties in measuring broadband subscribers related to the  project and have revised their counting methods. Thus, NTIA officials  noted that the total subscribers reported to date may not represent the  true number of new subscribers. In our review of awardees’ first quarter  2012 reports, we found that 13 of 43 SBA projects reported difficulties  with collecting subscriber data. For example, some awardees reported  that they thought they would be able to obtain subscribership data from  Internet service providers to determine the effect of their projects, but  later found that Internet service providers were unwilling to provide  subscribership data. NTIA has provided training on this issue, and  facilitated sessions in which projects share best practices for measuring  subscribership. Program officials told us NTIA is also working with  individual projects to help them find ways to address the challenges  involved in collecting subscribership data.
Similarly, RUS data on the effects of BIP projects on broadband adoption  may not be accurate. RUS established a goal for BIP projects to provide  new or improved broadband service to 359,450 subscribers, and in 2010,  RUS stated that it exceeded this goal because it estimates that BIP  projects will provide new or improved service to 847,239 subscribers.  However, this total does not reflect actual program outcomes, because it  is based on the estimates of applicants prior to the execution of their  funded projects. RUS requires recipients to report quarterly on the  number of households, businesses, educational providers, libraries,  health care providers, and public safety providers receiving new or  improved broadband service. However, when we reviewed the data, we  noted discrepancies. When we asked RUS about these discrepancies in  the subscribership data, RUS officials noted that the data are inaccurate  and that RUS has implemented quality checks to improve the information.  Specifically, RUS developed a spreadsheet tool that RUS staff use to  review the subscriber data submitted by individual projects, note whether  the data appear to be correct, and report how any problems with the data  were resolved. In its comments on a draft version of this report, RUS  noted that its field staff provides extensive contact and guidance to  awardees.
section_title: NTIA and RUS Have Acted to Address the Variety of Challenges Awardees Identified in Completing Projects
paragraphs: BTOP and BIP awardees identified multiple challenges in completing  projects, including compliance with regulations and construction related  challenges. Additionally, BIP awardees identified some additional  challenges related to RUS’s processes and requirements, and non- infrastructure projects participating in BTOP face challenges related to  staffing and deploying the projects. In some cases, these challenges have  contributed to the lack of progress discussed above. NTIA and RUS have  taken a number of actions to help awardees address these challenges,  including providing awardees with regular contact, expertise, webinars,  and guidance.
subsections: section_title: Challenges
paragraphs: While BTOP and BIP awardees have identified some of the same  challenges they have faced, they also identified some different challenges  because the programs are administered by different agencies and fund  different services. Table 5 lists the challenges we identified facing BTOP  and BIP awardees based on our interviews and content analysis of NTIA  and RUS documents.
Pub. L. No. 91-190, 83 Stat. 852 (1970), as amended, codified at 42 U.S.C. ch. 55. assessments because of the large volume of Recovery Act work. The  initial environmental assessment process was also the most common  challenge cited by RUS’s GFRs, who told us that these assessments took  longer than anticipated and negatively affected all awardees’ schedules.  Officials from NTIA and RUS both noted delays associated with the  environmental assessment process, and NTIA officials noted that these  delays have been up to 6 months for BTOP projects.
BTOP and BIP awardees reported facing other delays in beginning  project construction, such as:
Prevailing wage requirements. The Recovery Act requires that all  laborers and mechanics employed by contractors and subcontractors on  projects funded directly by or assisted in whole or in part by and through  the federal government under the Recovery Act be paid at prevailing  wage rates. NTIA and RUS officials and an awardee told us that in  many cases identifying the prevailing wage for activities such as fiber  deployment was difficult because that type of work had often not been  done in that area and the prevailing wage had not yet been determined  by the Department of Labor.
Permitting, right-of-way agreements, and make-ready work. Awardees  must apply for and receive permits and right of way agreements before  beginning construction. NTIA officials and awardees told us that for some  projects, obtaining these agreements from all the relevant stakeholders  took longer than anticipated and put the projects behind schedule. For  example, these agreements may have to be obtained from state and  local governments, tribal governments, federal entities (such as the  Bureau of Land Management), private landowners, and railroads. One  awardee we spoke with experienced delays of up to 9 months in the  installation of equipment and fiber because of the amount of time it took  to receive right of way permits from railroad companies. In addition,  make-ready work, which includes the tasks associated with preparing  utility poles for the installation of equipment and fiber, must be complete  before any construction occurs, and this need has posed challenges to  maintaining project timelines. For example, one BTOP awardee indicated  in its first quarter 2012 report to NTIA that “keeping make-ready  completion ahead of construction crew availability remains the major  challenge for the project.”
Weather, terrain, and broadband fiber availability. Weather-related  challenges and difficult terrain can cause delays in construction.  Awardees reported delays for, among other things, a major tornado that  caused damage to a service area and equipment, hurricanes, snowfall,  and flooding. Difficult terrain can also cause delays. One awardee told us  that its project unexpectedly called for boring through solid granite under  a river, which required additional tools and time. NTIA and RUS officials  told us that BTOP and BIP projects were also delayed due to fiber  shortages caused by the 2011 tsunami in Japan and increased worldwide  demand for fiber. For example, one BTOP infrastructure awardee noted  in its first quarter 2012 report to NTIA that it was “experiencing delays in  the delivery of the fiber… while we received a few shipments  during this quarter it was much less than promised.”
RUS officials also noted some challenges specific to the BIP program,  such as:
Approval of contracts and plans. RUS officials told us that to ensure  quality construction is completed, they require that awardees gain  approval of contracts before the construction begins or materials are  purchased. RUS officials said that on average, it takes the agency 1 and  a half months to 2 months to approve a contract. However, some RUS  GFRs and awardees said that RUS did not approve BIP contracts in a  timely fashion in some instances, which resulted in project delays. In  particular, some GFRs said that RUS took 6 to 12 months to approve a  contract. RUS officials noted that there could be a number of reasons  why contracts had not been approved, including that the contracts were  not correct when they were submitted for approval.
Compliance with reporting requirements. RUS officials told us some  awardees that received a loan or loan/grant combination have  experienced challenges complying with RUS reporting requirements. The  officials explained that awardees who had not previously borrowed from  RUS are more likely to experience difficulties complying with reporting  requirements than those awardees with a history of borrowing from RUS.
Proposed changes to the Federal Communications Commission’s (FCC)  Universal Service Fund. Some RUS officials were concerned about how  reforms to FCC’s Universal Service Fund, which provides  telecommunications funding to some BIP awardees, could potentially  affect projects’ income streams. FCC’s reforms include changes to the  distribution and use of Universal Service Fund payments to make the  funds available to support both telephone service and broadband  deployment. As a result of the reforms, rural telecommunications  carriers could receive reduced universal service support payments. In  August 2011, RUS provided data to FCC on how these changes could  potentially affect the income stream of RUS borrowers and grant  awardees. Subsequently, in its 2011 Order and Further Notice of  Proposed Rulemaking on this issue, FCC stated that the reforms it  adopted were more modest than the estimates used by RUS to  determine the potential impact of the reforms, and that RUS did not  consider the potential for borrowers to adopt operational efficiencies that  would offset reductions in universal service support.
NTIA officials and awardees also identified challenges that apply to non- infrastructure BTOP projects, such as:
Staffing or expertise. PCC and SBA projects faced staffing and expertise  challenges, such as high staff turnover, or the need for additional staff to  handle tasks such as providing technical support for computers or  manning computer labs. Our analysis of BTOP awardees’ first quarter  2012 reports to NTIA indicate that 7 of 43 SBA projects and 22 of 64  PCC projects reported challenges with either a lack of staff or lack of staff  expertise.
Contracting, procurement, and financing. Contracting and procurement  issues also commonly caused delays at the beginning of PCC and SBA  projects, according to NTIA officials. These projects can be run by state  or local entities, and four of the Federal Program Officers (FPOs) we  spoke with told us that the projects they oversee were delayed by the  need to comply with state or local contracting or procurement  requirements. For example, FPOs told us that one project was delayed  by 4 to 5 months because the state legislature needed to approve the  spending of BTOP funding, and another project run by a large city was  delayed by more than a year because of its internal contracting process.
Technical issues. Issues related to equipment, software, and Internet  service, have also been challenging to SBA and PCC projects. Our  analysis of BTOP awardees’ first quarter 2012 reports to NTIA indicate  that 8 of 43 SBA projects and 16 of 64 PCC projects noted challenges  with the technical aspects of the projects. For example, one awardee  reported that software conflicts caused system crashes for the  workstations deployed for seniors and adults with disabilities.
Outreach and program participation. Some awardees reported outreach  and participation challenges, such as difficulty in participant retention. For  example, one awardee reported that most of the participants were senior  citizens and were easily discouraged when they felt that they could not  retain new skills after each class or training session. Overall, according to  our analysis of BTOP awardees’ first quarter 2012 reports to NTIA, 13 of  43 SBA projects and 10 of 64 PCC projects reported challenges related  to outreach or participation.
section_title: Agencies’ Actions to Address Challenges
paragraphs: NTIA and RUS provided resources and took action to help awardees  address their challenges. Both agencies have provided awardees with  regular contact and support. For example, NTIA officials told us that they  have regularly scheduled calls between awardees and FPOs to  encourage dialog and early resolution of problems. The officials also  noted they have encouraged awardees to come to the agency for help,  especially in complex situations where federal influence can help resolve  challenges. For example, NTIA officials stated that they worked with FCC  and state public utility commissions to ensure that they prioritized their  review of BTOP projects’ requests for permits. Likewise, RUS officials told  us that GFRs and other agency staff have provided regularly scheduled  contact to determine project status and challenges early on so they can  begin addressing them. Both FPOs and GFRs told us that they worked to  identify options for dealing with fiber shortages and provided that  information to awardees.
Both NTIA and RUS developed webinars and training sessions to inform  awardees and provide them with updated information. NTIA has provided  guidance to awardees through webinars and conference calls and has  held several webinars on topics including pole attachment issues,  computer recycling and refurbishing, and numerous other topics. Some  awardees told us the webinars and conference calls were both useful and  timely. RUS also developed and held webinars focused on assisting grant  and loan recipients with the contract process; which according to officials,  could increase the likelihood that the contracts are approved more  expeditiously so that awardees can be reimbursed in a more timely  fashion. NTIA also has a monitoring process to identify projects with  schedule, performance, or other challenges, and as needed provides  such projects with performance improvement plans and corrective action  plans. In its comments on a draft version of this report, RUS noted that it  has implemented a detailed review process to identify issues with BIP  awards and is constantly providing guidance and assistance to the  awardees to overcome issues with the performance of the award.
In addition to providing the general resources and actions described  above, NTIA and RUS took the following actions to address some of the  specific challenges described earlier in this report:
NTIA took steps to facilitate the sharing of information and best practices  among projects by identifying projects that had already successfully  addressed a particular issue and asking them to share their experiences  with similar projects. For example, a significant number of infrastructure  projects were experiencing similar make-ready challenges, and NTIA  organized and moderated a discussion where awardees discussed  problems and solutions.
NTIA also created different groups for PCC and SBA projects to share  information on a range of issues that were challenging awardees related  to K-12 education, seniors, tribes, municipalities, and healthcare.
RUS proposed contract modifications to streamline and simplify the  timeline for construction and hired 8 additional engineers and loan and  grant technicians and allowed some GFRs overseeing larger projects to  approve routine contracts to help address the contract approval backlog  described above.
section_title: Conclusions
paragraphs: BTOP and BIP, as established by the Recovery Act, are intended to  promote the availability and use of broadband Internet access throughout  the country, as well as create jobs and stimulate economic development.  The ability to measure the progress of BTOP and BIP projects and their  effects on expanding access to and use of broadband Internet access is  an important component of program management and oversight, and  could inform future federal programs. NTIA and RUS track the amount of  funds disbursed to projects as one measure of progress. However,  disbursements do not fully reflect the amount of progress made. Thus,  data on non-financial measures of progress, such as the amount of  infrastructure deployed, can provide insights into the progress of  broadband projects. While NTIA established performance measures and  collected data on non-financial measures of progress, RUS did not initially  collect comparable data, and once it did begin collecting these data, it  could not ensure their quality. Collecting accurate data would enable RUS  to better demonstrate BIP projects’ progress toward completion, and  outcomes for the BIP program. We also identified challenges that NTIA  and RUS both faced in ensuring the accuracy of projects’ subscribership  data. Because both agencies have taken steps to improve the quality of  the subscribership data reported by awardees, we are not making a  recommendation to address this issue in this report.
section_title: Recommendation for Executive Action
paragraphs: To ensure RUS is collecting reliable information regarding the effect of  investments in broadband, we recommend that the Secretary of  Agriculture direct RUS to take steps to improve the quality of its data on  the number of fiber miles and wireless access points created by BIP  projects.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Secretary of Commerce and the  Secretary of Agriculture for review and comment. The Department of  Commerce provided technical comments that we incorporated into the  report as appropriate. The Department of Agriculture provided written  comments on a draft of this report, which appear in appendix III. The  department disagreed with our characterization that RUS does not collect  adequate data to measure the progress of BIP and noted that RUS  collects financial data as well as contract-level data with information on  planned construction for each project. The department also noted that  RUS collects data on the number of subscribers, which it implies is a  relevant measure of performance for the BIP program. We agree that  RUS collects financial data, but as we note in the report, financial data do  not fully reflect the progress of the program. Thus, non-financial data,  such as fiber miles and wireless access points deployed, provide an  additional indicator of BIP’s progress. As we note in the report, RUS’s  data for these measures, as well as the number of subscribers, are  unreliable, which hinders RUS’s ability to assess the progress of BIP.  Although the department neither agreed or disagreed with our  recommendation that RUS should improve the quality of its data on the  number of fiber miles and wireless access points created by BIP projects,  the department stated that RUS has already taken steps to improve the  quality of its data. If RUS takes action and can demonstrate that the data  are reliable, we will close the recommendation as implemented.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Agriculture, and the Secretary of  Commerce. In addition, the report is available at no charge on the GAO  website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or goldsteinm@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made major contributions to  this report are listed in appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: This appendix provides information on the methodologies that we used to  assess (1) the progress made in implementing broadband projects funded  by the American Recovery and Reinvestment Act of 2009 (Recovery  Act), (2) the effect of the projects on expanding access to and adoption  of broadband service, and (3) the challenges that grant and loan  recipients face in completing broadband projects, and the actions that  agencies are taking to help address these challenges.
subsections: section_title: Progress of Programs
paragraphs: To determine the progress made in implementing the projects funded by  the Recovery Act, we obtained data that allowed us to calculate the  amount of funds awarded and the amount of funds disbursed to projects  participating in the Broadband Technology Opportunities Program  (BTOP) administered by the National Telecommunications and  Information Administration (NTIA), and the Broadband Initiatives Program  (BIP) administered by the Rural Utilities Service (RUS). In addition, we  obtained data from NTIA on the status of BTOP in meeting the targets for  the key performance indicators established by NTIA: miles deployed or  leased, community anchor institutions connected, workstations installed in  public computer centers, and new broadband subscribers. To determine  the reliability of these data, we reviewed relevant documentation,  including manuals, guidance and forms provided to awardees reporting  the data, descriptions of internal controls, and Inspector General reviews  of the data from the Department of Agriculture and the Department of the  Treasury (which manages the payment system used by BTOP recipients);  and we interviewed agency officials about their processes for reviewing  the data and ensuring their accuracy. We found the data generally  reliable for our purposes of reporting the amount of funds disbursed to  BTOP and BIP awardees, and the amount of progress made toward  meeting NTIA’s targets for BTOP, although we did note and report on  limitations with NTIA’s subscribership data.
section_title: Effect of Programs
paragraphs: To assess the effect of the projects on expanding access to and adoption  of broadband service, we reviewed data collected by NTIA and RUS,  such as the aforementioned data on the progress of BTOP projects in  deploying miles, connecting community anchor institutions, installing  workstations in public computer centers, and creating new broadband  subscribers. Our efforts to determine the reliability of BTOP’s program  data are discussed above. We reviewed the data that RUS collects from  BIP awardees on the number of subscribers accessing BIP-funded  service, but based on conversations with RUS officials, determined the  data were not reliable for our purposes. We also interviewed BTOP and  BIP awardees to understand the effects of their individual projects. We  used the following criteria to select awardees to interview: projects that  had received two-thirds of their award (thereby meeting NTIA’s  “substantially complete” requirement), large award size, and geographic  dispersion.
section_title: Challenges
paragraphs: To determine the challenges that grant and loan recipients face in  completing projects, we interviewed NTIA and RUS officials, including  NTIA’s Federal Program Officers (FPO) and RUS’s General Field  Representatives (GFR), who serve as a point-of-contact for the  awardees. We also interviewed the BTOP and BIP awardees mentioned  in the previous paragraph, as well as some awardees that had not  received two-thirds of their award. For BTOP, we reviewed awardees’  progress reports for the first quarter of 2012, which covered the time  period from January 1, 2012, to March 31, 2012. In these quarterly  reports, awardees must report on their progress toward meeting  milestones (progress is based on expenditures), and describe the reason  for any variance from their baseline plan or subsequent written updates  provided to their program officer. Awardees must also describe any  challenges or issues faced in the past quarter in achieving planned  progress, and any areas where assistance from NTIA is needed. We  created content categories for the challenges reported by the awardees  and for whether they requested assistance from NTIA. Two analysts  independently coded each response into one of the categories; any  discrepancies in the coding of the two analysts were discussed and  addressed by the analysts. For BIP, we reviewed a tracking spreadsheet  maintained by RUS, in which the GFRs provide the status of each BIP  project and in some cases, note issues or challenges facing individual  projects.
section_title: Agency Actions to Address Challenges
paragraphs: To determine the actions NTIA and RUS are taking to address challenges  facing BTOP and BIP awardees, we interviewed NTIA and RUS officials,  including FPOs and GFRs. We also reviewed documentation of guidance,  training, webinars, and workshops provided by the agencies. We asked  the BTOP and BIP awardees we interviewed about their experiences with  NTIA and RUS, including whether the awardees had faced challenges  and the awardees’ perceptions of NTIA and RUS guidance and  resources.
We conducted this performance audit from November 2011 through  September 2012 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
section_title: Appendix II: Analysis of Employment Data Submitted by Program Awardees
paragraphs: This appendix responds to a recurring GAO mandate in the American  Recovery and Reinvestment Act (Recovery Act) requiring us to comment  and report quarterly on estimates of jobs funded and counted as full-time  equivalents (FTE) as reported by recipients of Recovery Act funds. To  assess the quality of FTE reporting by awardees participating in the  National Telecommunications and Information Administration’s (NTIA)  Broadband Technology Opportunities Program (BTOP) and the Rural  Utilities Service’s (RUS) Broadband Initiatives Program (BIP), we  examined recipient-reported data publicly available at Recovery.gov as of  August 1, 2012, for these two programs over the 10 quarters in which  they reported FTE data.  While Recovery Act recipients’ reporting of  FTEs began in September 2009, the first quarter that FTE data were  submitted for the BTOP and BIP programs was the first quarter of 2010  for BTOP and the second quarter of 2010 for BIP.
Our assessment of the FTE reporting included interviewing NTIA and  RUS program officials familiar with awardees’ recipient reporting and a  review of the FTE figures and other recipient reported data. Our matches  showed a high degree of agreement between the agencies’ assessments  of FTE positions reported and our analyses of information recipients  provided on their quarterly reports. Based on our analyses and interviews  with agency officials, we determined that the recipient-reported data  appeared to be sufficiently reliable for the purpose   of providing summary, descriptive information about FTEs and other  information submitted on grantees’ recipient reports.
The FTE data reported by BTOP and BIP recipients showed an overall  rise in the level of employment activity among the projects. As shown in  figure 3, the number of FTEs reported by both programs steadily  increased from quarter to quarter in 2010 and 2011 with BTOP continuing  to show an increase in the second quarter of 2012 while BIP showed a  decrease during the first quarter of 2012, and an increase from that in the  second quarter of 2012.
Recipients reported that BTOP-funded FTEs increased from about 20  FTEs in the first quarter of 2010 to a peak quarter of about 4,500 FTEs in  the second quarter of 2012. BIP recipients reported an increase from 86  FTEs in the second quarter of 2010 to about 4,500 in the second quarter  of 2012, with a peak of over 4,700 FTEs in the fourth quarter of 2011.
section_title: Appendix III: Comments from the Department of Agriculture
subsections: section_title: GAO Comments
paragraphs: 1.  We do not imply that RUS does not or should have the same data as  NTIA. Rather, we note that the agencies have financial and non- financial measures of progress. Both NTIA and RUS have reliable  financial measures of progress. However, as we note, the financial  data do not fully reflect the amount of work completed. Therefore,  non-financial data provide additional insight into the progress of the  programs toward completion. In its letter, RUS says that the number  of fiber miles is not as relevant as the number of subscribers. But,  since RUS began tracking fiber miles and wireless access points  deployed, we assume the agency considers these important  measures of progress. Yet, at the time of our review, RUS officials  told us that they could not ensure the quality of the data. We agree  that the number of subscribers is an important performance measure  for the programs; however, unlike fiber miles and wireless access  points deployed, the number of subscribers is not an indicator of the  progress of a project toward completion. Rather, it is an outcome- based performance measure for a completed project, as the number  of subscribers depends in part on the deployment of fiber miles and  wireless access points. Further, as we discuss in the report, RUS  officials told us that its subscriber data are inaccurate. Therefore, at  an aggregate, program level, RUS does not have accurate non- financial data to measure the progress of BIP.  2.  We acknowledge that RUS tracks the progress of individual BIP  projects through its review and approval of contracts. RUS noted that  it uses the information provided in contracts to monitor the  construction of fiber facilities and the installation of access points on a  project-by-project basis. RUS also noted that as a lender, there was  no need to track these measures at an aggregate level. However,  considering the number of BIP projects, the provision of grants in  addition to loans, and the emphasis on transparency and quickly  deploying Recovery Act-funded projects, aggregated information  provides a holistic view of the progress of BIP. In addition, if the  underlying project-level data are reliable, it is unclear why the  aggregate level information would be unreliable, as RUS officials told  us during our review.  3.  We included additional information on RUS’s efforts in the body of our  report.  4.  We revised our report to note that the quarterly reports also include  awardees’ financial statements.    5.  We revised our report to identify the additional steps that RUS has  taken to help awardees address their challenges, including  implementing a detailed review process and providing guidance and  assistance to awardees.  6.  At the time of our review, RUS officials told us that they could not  ensure the quality of the data on the number of fiber miles and  wireless access points deployed. RUS officials attributed the problems  with data quality to the short collection period, as they had begun  collecting these data in June 2012. If RUS takes action and can  demonstrate that the data are reliable, we will close the  recommendation as implemented.
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Mark L. Goldstein, (202)512-2834 or Goldsteinm@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Michael Clements (Assistant  Director), Tom Beall, Crystal Huggins, Bert Japikse, Aaron Kaminsky,  Carol Patey, Amy Rosewarne, Beverly Ross, and Jon Stehle made key  contributions to this report.