Rural broadband stimulus program under scrutiny

The Rural Utilities Service (RUS), a program within the U.S. Department of Agriculture that will be in charge of doling out $2.5 billion of the $7.2 billion in broadband stimulus money, is facing scrutiny. The U.S. Department of Agriculture's inspector general issued a report this week that said the RUS continues to grant loans to areas that already have broadband access and to communities near major cities. The RUS already has about $1 billion in its budget to loan to companies willing to build broadband in rural areas.

The RUS program faced tough criticism in 2005 when auditors then found irregularities with a quarter of the funds the program issued in its first four years of operation. In one instance, the RUS program loaned $45 million to wire wealthy subdivisions in the Houston suburbs. The recent audit found the RUS continues to give loans to areas already serviced by broadband and to major communities.

"We remain concerned with RUS' current direction of the broadband program, particularly as they receive greater funding under the American Recovery and Reinvestment Act," Assistant Inspector General Robert W. Young wrote. "RUS' broadband program may not meet the Recovery Act's objective of awarding funds to projects that provide service to the most rural residents that do not have access to broadband service."

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