July 20, 2010 NBP Threatens RUS Lending Programs, House Ag Committee Told

Plan abandons policies that have connected rural communities and jeopardizes future broadband deployment

Photo of speakerArlington, Va., (July 20, 2010) - Rural communities and Rural Utilities Service (RUS) telecom lending programs are already feeling a ripple effect from the National Broadband Plan, which may ultimately lead to the inability of rural telcos to repay RUS loans, according to testimony by Mark Bahnson, general manager of Bloomingdale Communications (Bloomingdale, Mich.). Bahnson's comments came at a House Agriculture Subcommittee on Rural Development, Biotechnology, Specialty Crops and Foreign Agriculture hearing to review rural development programs in advance of the 2012 Farm Bill.

Bahnson cited the mutual recognition by RUS and telecom providers that without adequate financing, rural America would likely not have the communications services that are available in urban areas. He noted that RUS telecom lending has stimulated billions of dollars in private capital investment in rural communications infrastructure, a model that should be continued or emulated-not placed at risk.

Such financing, along with private/public partnerships and cost recovery mechanisms including universal service and intercarrier compensation, has enabled community-based telecom providers to bring rural consumers communications services that are comparable in price, scope and quality to those available in urban areas, Bahnson said.

Yet the National Broadband Plan (NBP) contains provisions that appear to abandon the means that have led to today's successes. "Even more alarming, it looks as if we may soon abandon the basic principles of universal service that have ensured rural America is not left behind," Bahnson testified.

Bahnson said the plan sets the country on the path of a rural/non-rural digital divide by setting speed goals that will ensure speeds 25 times slower for high-cost, rural areas-abandoning our country's long-standing commitment to providing comparable telecommunications service to all Americans.

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"Without comparable broadband speeds, rural communities, which are becoming increasingly dependent on broadband, will fall further behind and will be unable to compete and receive comparable job, health care, or educational opportunities and services as urban Americans," Bahnson said.

He said NTCA, along with more than 40 concurring national, state and tribal associations has formally recommended several changes to the NBP to avoid putting RUS programs at risk.

View testimony


The National Telecommunications Cooperative Association is the premier association representing more than 560 locally owned and controlled telecommunications cooperatives and commercial companies throughout rural and small-town America. NTCA provides its members with legislative, regulatory and industry representation; meetings; publications and educational programs; and an array of employee benefit programs. Visit us at www.ntca.org.