The aftermath of Motorola's (NYSE:MSI) $50.6-million grant from the National Telecommunications and Information Administration (NTIA) under the broadband stimulus award process has been anything but smooth sailing.
The vendor was expected to use the money to help fund the buildout of a 193-site LTE network for public-safety agencies in the San Francisco Bay area, but local governments have, since late last summer, cried foul over the fact that they had no say in the procurement process.
Most recently, San Jose's mayor asked the Federal Communications Commission to look into the lease agreement for 700 MHz spectrum Motorola will use to built the LTE network. In December, the U.S. Office of Inspector General (OIG) launched an inquiry into the grant awarded to Motorola. In a letter to NTIA Assistant Secretary Larry Strickling, Inspector General Todd Zinser stated that his staff would "obtain additional facts" regarding the Motorola grant award in response to complaints from Santa Clara County Executive Jeff Smith, who wrote the OIG office about the matter on Nov. 1.
Smith wrote his complaints after an NTIA review upheld the Motorola grant award despite concerns raised by Santa Clara County and the city of San Jose that NTIA did not consider all aspects of the grant application. Smith is concerned about the lack of transparency in the grant process and stated that an "investigation is warranted and necessary in order to ensure that public funds are administered in a transparent and fair manner at all levels of government."
Both the NTIA and the Department of Agriculture were in charge of handing out some $7.2-billion in stimulus awards and were woefully unprepared for the flood of applications they received. Moreover, they had to meet strict deadlines in making awards. As such, one has to question the vetting process.
So far, at least one erroneous award has come to light. In September, the USDA rescinded a $19-million broadband stimulus grant/loan that was announced in August to Texas-based TierOne Converged Networks; the company had been charged by the U.S. Securities and Exchange Commission in April with alleged federal securities violations.
If the OIG indeed finds that NTIA didn't vet Motorola's grant application properly, what sort of light will it shed on the entire broadband stimulus grant process?--Lynnette