BTOP/BIP Hearing Summary

February 27, 2013:  The BTOP Program and (to a lesser extent) the BIP Program took some hits yesterday at a contentious hearing of the House Communications and the Internet Subcommittee.  It was probably the roughest hearing since the programs were initiated in 2009, but there do not appear to be any plans for legislation to stop the programs. 

Chairman Walden (R.-OR) aggressively questioned NTIA Chief Larry Strickling about the propriety of West Virginia’s bulk purchase of high-capacity  routers.  According to Mr. Walden, the W. Va state auditor found that the State violated procurement procedures in awarding a no-bid contract for the Cisco routers.  Walden held up a large photo of a trailer and questioned whether the library using this trailer really needed a multi-thousand dollar router for a community of only 1500 people.  Mr. Strickling defended the purchase by saying that that community was planning to build a much larger library and that the equipment would accommodate several years of growth.  He also said the W. Va auditors improperly referred to the “list” prices for the routers instead of the discounted prices the State actually paid. 

Congressman Cory Gardner (R.-CO) several times complained that the EagleNet infrastructure program was overbuilding local telcos in Eastern Colorado instead of building broadband in the unserved areas of Western Colorado.  He held up a map showing the existing fiber builds by the telcos and that Eaglenet was providing a  second or sometimes third pipe to the same area.  (He said he attended a school with one graduating senior, and the school has 3 fiber connections, including one from EagleNet.)  Mr. Strickling responded that the telcos did not complain about the project until they lost the bid to serve Eaglenet.  Although he was interrupted several times,  Mr. Strickling eventually pointed out that the BTOP program is intended to bring high-bandwidth services to schools and libraries through Middle Mile builds, not to serve individual homes in unserved areas.  (NOTE: This was the point made in the SHLB letter to the House Members.) He also said much of the fiber laid by EagleNet “was along Internet 70, I mean, Interstate 70.” Rep. Diana Degette (D.-CO) also on the Committee offered to sit down with the telcos and Eaglenet and NTIA to work out a win-win arrangement.  (Strickling also noted that the EagleNet project was temporarily suspended because EagleNet had decided to replace some microwave services with fiber, but needed to get rights-of-way approvals first.  He expects the suspension to be lifted soon.)

The second panel was quite interesting, even though fewer Members were there.  The Colorado telco association representative (Peter Kirchhof) said there should have been an analysis of what areas had fiber before EagleNet began to deploy new fiber.  The President of Fairpoint-Vermont (Michael Smith) said there was “lots” of Middle Mile fiber throughout Vermont and the BTOP project should have funded “Last Mile” build-out in unserved areas.  Joe Freddoso did an excellent job of describing the MCNC build-out in North Carolina and the benefits to anchor institutions across the State.  He said MCNC did exactly that kind of analysis of existing fiber, and where they found existing fiber they worked with the industry to avoid any overbuild situation.  The Congressional members then asked the Colorado telco if that approach would resolve his concern and he said “yes, it would”. 

A special word of thanks to Rep. Doris Matsui (D.-CA) who introduced the SHLB letter into the record of the hearing.  NTIA staff and the Democratic staff both thanked me personally for submitting the letter.  A copy of the letter is available here.