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United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

September 2012: 

Recovery Act: 

Broadband Programs Are Ongoing, and Agencies’ Efforts Would Benefit 
from Improved Data Quality: 

GAO-12-937: 

GAO Highlights: 

Highlights of GAO-12-937, a report to congressional committees. 

Why GAO Did This Study: 

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. 

What GAO Found: 

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. 

What GAO Recommends: 

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. 

View [hyperlink, http://www.gao.gov/products/GAO-12-937]. For more 
information, contact Mark L. Goldstein at (202) 512-2834 or 
goldsteinm@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

The Progress of Recovery Act Broadband Projects Is Difficult to 
Measure because of Data Limitations: 

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: 

NTIA and RUS Have Acted to Address the Variety of Challenges Awardees 
Identified in Completing Projects: 

Conclusions: 

Recommendation for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Analysis of Employment Data Submitted by Program Awardees: 

Appendix III: Comments from the Department of Agriculture: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Summary of Recovery Act Broadband Programs, as of June and 
July 2012: 

Table 2: Deadlines for BTOP Projects: 

Table 3: Distribution of BTOP and BIP Awardees by the Percentage of 
Project Funding Disbursed, as of June and July 2012: 

Table 4: BTOP Infrastructure Expansion, as of March 31, 2012: 

Table 5: Challenges Faced by BTOP and BIP Awardees: 

Figures: 

Figure 1: Amount of Awarded Program Funds Disbursed to Current BTOP 
and BIP Awardees, and Remaining Program Funds, as of June and July 
2012: 

Figure 2: Example of an Accessible Workstation, with Desktop Magnifier: 

Figure 3: FTEs Reported by BTOP and BIP Recipients, January 2010 
through June 2012: 

Abbreviations: 

BIP: Broadband Initiatives Program: 

BTOP: Broadband Technology Opportunities Program: 

CCI: Comprehensive Community Infrastructure: 

FCC: Federal Communications Commission: 

FPO: Federal Program Officer: 

GFR: General Field Representative: 

FTE: full-time equivalent: 

NTIA: National Telecommunications and Information Administration: 

OMB: Office of Management and Budget: 

PCC: public computer center: 

Recovery Act: American Recovery and Reinvestment Act of 2009: 

RUS: Rural Utilities Service: 

SBA: sustainable broadband adoption: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

September 14, 2012: 

The Honorable John D. Rockefeller IV: 
Chairman: 
The Honorable Kay Bailey Hutchison: 
Ranking Member: 
Committee on Commerce, Science, and Transportation: 
United States Senate: 

The Honorable Fred Upton: 
Chairman: 
The Honorable Henry A. Waxman: 
Ranking Member: 
Committee on Energy and Commerce: 
House of Representatives: 

Access to affordable broadband telecommunications[Footnote 1] is 
increasingly viewed 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 
Recovery Act Reinvestment Act of 2009 (Recovery Act), enacted on 
February 17, 2009.[Footnote 2] 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. This $7.2 billion included:[Footnote 3] 

* $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.[Footnote 4] 
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. 
[Footnote 5] As of June 2012, there were 263 BIP projects comprising 
$3.3 billion in awarded funds.[Footnote 6] 

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.[Footnote 7] 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. 
[Footnote 8] 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.[Footnote 9] 

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. 

Background: 

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. 

Table 1: Summary of Recovery Act Broadband Programs, as of June and 
July 2012: 

Program: BTOP; 
Project category[A]: Comprehensive community infrastructure; 
Number of projects: 117; 
Total program funds: $3.4 billion; 
Description: 
Deploy broadband infrastructure. NTIA primarily funded middle-mile 
projects, which do not provide service to end users (such as 
households and businesses), but instead provide a link from the 
Internet backbone to the networks of local service providers, such as 
cable or phone companies. The projects also provide new or upgraded 
connections to community anchor institutions, such as schools, 
libraries, colleges and universities, medical and healthcare 
providers, public safety entities, and other community support 
organizations. Seven of these awards fund projects that intend to use 
the 700 MHz spectrum to deploy public safety broadband systems.[B] 

Program: BTOP; 
Project category[A]: Public computer center; 
Number of projects: 65; 
Total program funds: $200 million; 
Description: 
Expand public access to broadband service and enhance broadband 
capacity at entities such as community colleges and public libraries. 
Awardees also provide classes at these entities, in which citizens can 
receive training on topics such as online job searching, basic 
computer and Internet skills, and certification and educational 
courses. 

Program: BTOP; 
Project category[A]: Sustainable broadband adoption; 
Number of projects: 43; 
Total program funds: $250 million; 
Description: 
Increase Internet use and broadband subscribership among individuals 
and businesses. Projects may include digital literacy training and 
outreach campaigns to increase the relevance of broadband in people’s 
everyday lives. 

Program: BIP; 
Project category[A]: Infrastructure and satellite; 
Number of projects: 263; 
Total program funds: $3.3 billion; 
Description: 
Deploy infrastructure in rural areas, with an emphasis on last-mile 
infrastructure. A last-mile project is defined as any project that 
provides service to end users or end-users’ devices. Four of these 
awards fund satellite broadband projects, which offer satellite 
broadband connections to users in rural locations where terrestrial 
broadband services are not available. Twelve awards funded middle-mile 
projects. 

Source: GAO analysis of NTIA (as of July 2012) and RUS (as of June 
2012) data. 

Note: Canceled projects removed from totals. 

[A] We excluded certain activities funded under BTOP and BIP, such 
broadband mapping projects and funds transferred to FCC for the 
national broadband plan under BTOP and technical assistance projects 
funded under BIP. 

[B] In February 2012, Congress enacted the Middle Class Tax Relief and 
Job Creation Act of 2012, Pub. L. No. 112-96, § 6002, 126 Stat 156, 
203 (2012), codified at 47 U.S.C. § 1422, which contained provisions 
to create a nationwide interoperable public safety broadband network, 
with one entity holding the license for the 700 MHz spectrum. In light 
of this development, NTIA partially suspended the seven BTOP-funded 
700 MHz public safety projects to ensure that they proceed in a manner 
that supports development of the nationwide, interoperable network. 

[End of table] 

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.[Footnote 10] 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. 

Table 2: Deadlines for BTOP Projects: 

Total: 
Deadline: November 2012; 
Total award value: $64 million; 
Number of BTOP projects subject to deadline: 
Comprehensive community infrastructure: 2; 
Public computer center: 4; 
Sustainable broadband adoption: 2; 
Total: 8. 

Deadline: December 2012; 
Total award value: $71 million; 
Number of BTOP projects subject to deadline: 
Comprehensive community infrastructure: 2; 
Public computer center: 2; 
Sustainable broadband adoption: 1; 
Total: 5. 

Deadline: January 2013; 
Total award value: $533 million; 
Number of BTOP projects subject to deadline: 
Comprehensive community infrastructure: 24; 
Public computer center: 11; 
Sustainable broadband adoption: 3; 
Total: 38. 

Deadline: February 2013; 
Total award value: $212 million; 
Number of BTOP projects subject to deadline: 
Comprehensive community infrastructure: 7; 
Public computer center: 3; 
Sustainable broadband adoption: 6; 
Total: 16. 

Deadline: March 2013; 
Total award value: $110 million; 
Number of BTOP projects subject to deadline: 
Comprehensive community infrastructure: 5; 
Public computer center: 0; 
Sustainable broadband adoption: 1; 
Total: 6. 

Deadline: June 2013; 
Total award value: $440 million; 
Number of BTOP projects subject to deadline: 
Comprehensive community infrastructure: 18; 
Public computer center: 11; 
Sustainable broadband adoption: 0; 
Total: 29. 

Deadline: July 2013; 
Total award value: $1.463 billion; 
Number of BTOP projects subject to deadline: 
Comprehensive community infrastructure: 43; 
Public computer center: 15; 
Sustainable broadband adoption: 9; 
Total: 67. 

Deadline: August 2013; 
Total award value: $864 million; 
Number of BTOP projects subject to deadline: 
Comprehensive community infrastructure: 16; 
Public computer center: 12; 
Sustainable broadband adoption: 14; 
Total: 42. 

Deadline: September 2013; 
Total award value: $46 million; 
Number of BTOP projects subject to deadline: 
Comprehensive community infrastructure: 0; 
Public computer center: 7; 
Sustainable broadband adoption: 7; 
Total: 14. 

Total: 
Total award value: $3.803 billion; 
Number of BTOP projects subject to deadline: 
Comprehensive community infrastructure: 117; 
Public computer center: 65; 
Sustainable broadband adoption: 43; 
Total: 225. 

Source: GAO analysis of NTIA data. 

Note: Canceled projects removed from totals. April and May 2013 are 
not included because none of the BTOP projects have a deadline 
occurring in those months. 

[End of table] 

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.[Footnote 11] 
NTIA also requires that BTOP 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. 

The Progress of Recovery Act Broadband Projects Is Difficult to Measure 
because of Data Limitations: 

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. 

Amount of Funding Disbursed as an Indicator of Progress: 

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. 

Figure 1: Amount of Awarded Program Funds Disbursed to Current BTOP 
and BIP Awardees, and Remaining Program Funds, as of June and July 
2012: 

[Refer to PDF for image: vertical bar graph] 

BTOP: 
Infrastructure project funds disbursed: $1.6 billion; 
Non-infrastructure project funds disbursed: $290 million; 
Remaining program funds: $1.9 billion. 

BIP: 
Infrastructure project funds disbursed: $1.1 billion; 
Non-infrastructure project funds disbursed: $0; 
Remaining program funds: $2.2 billion. 

Note: Canceled projects removed from totals. 

[End of figure] 

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. 

Table 3: Distribution of BTOP and BIP Awardees by the Percentage of 
Project Funding Disbursed, as of June and July 2012: 

Percent of project funding disbursed: 0%; 
BTOP: 
Number of awardees: 2; 
Percentage of awardees: 1%; 
BIP: 
Number of awardees: 15; 
Percentage of awardees: 6%. 

Percent of project funding disbursed: Greater than 0% to 25%; 
BTOP: 
Number of awardees: 15; 
Percentage of awardees: 7%; 
BIP: 
Number of awardees: 132; 
Percentage of awardees: 50%. 

Percent of project funding disbursed: Greater than 25% to 50%; 
BTOP: 
Number of awardees: 55; 
Percentage of awardees: 24%; 
BIP: 
Number of awardees: 52; 
Percentage of awardees: 20%. 

Percent of project funding disbursed: Greater than 50% to 75%; 
BTOP: 
Number of awardees: 89; 
Percentage of awardees: 40%; 
BIP: 
Number of awardees: 27; 
Percentage of awardees: 10%. 

Percent of project funding disbursed: Greater than 75% to less than 
100%; 
BTOP: 
Number of awardees: 59; 
Percentage of awardees: 26%; 
BIP: 
Number of awardees: 30; 
Percentage of awardees: 11%. 

Percent of project funding disbursed: 100%; 
BTOP: 
Number of awardees: 5; 
Percentage of awardees: 2%; 
BIP: 
Number of awardees: 7; 
Percentage of awardees: 3%. 

Percent of project funding disbursed: Total; 
BTOP: 
Number of awardees: 225; 
Percentage of awardees: 100%; 
BIP: 
Number of awardees: 263; 
Percentage of awardees: 100%. 

Source: GAO analysis of NTIA (as of July 2012) and RUS (as of June 
2012) data. 

Note: Canceled projects removed from totals. 

[Ends of table] 

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. 

Non-Financial Indicators of Progress: 

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).[Footnote 12] 
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. 

In contrast, RUS did not establish non-financial performance metrics 
for measuring BIP’s progress in deploying infrastructure, such as 
miles deployed.[Footnote 13] RUS officials told us that because of RUS’
s traditional role as a loan administrator, it tends to focus on 
ensuring that the funding is 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. 

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: 

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. 

BTOP Expanded Infrastructure and Provided Access at Public Computer 
Centers: 

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. 

Table 4: BTOP Infrastructure Expansion, as of March 31, 2012: 

Miles: 

Network Miles Installed: 14,192. 

Network Miles Leased: 27,207. 

Existing Miles Upgraded: 13,327. 

Existing Miles Leased: 2,523. 

Total: 57,249. 

Community Anchor Institutions: 

Institutions with New Access: 2,420. 

Institutions with Improved Access: 5,952. 

Total: 8,372. 

Source: GAO analysis of NTIA data. 

[End of table] 

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. 

Figure 2: Example of an Accessible Workstation, with Desktop Magnifier: 

[Refer to PDF for image: photograph] 

Source: GAO. 

[End of figure] 

[Side bar: 
Example of PCC Project: State Library of Louisiana: 
This PCC project provides classes at local libraries throughout the 
state. Louisiana residents register in advance for the classes, which 
typically last an entire day. Topics include computer basics, software 
training on Microsoft and Adobe programs, job search, résumé, and 
interview skills, and business skills, such as accounting and customer 
service. The project is also using BTOP funds to support a number of 
electronic resources, such as Homework Louisiana — a free online 
tutoring service for Louisiana students attending kindergarten through 
college. Students can receive individual tutoring in math, science, 
social studies, and English. In addition, Louisiana's Jobs and Career 
Center portal provides job search and small business resources, and 
the Learning Express Library provides study guides and practice tests 
for GED, college, graduate school, as well as professional licensure 
and certifications. 
Total award funding: $8,797,668. 
End of side bar] 

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.” 

Measurement and Data Limitations Make It Difficult to Assess the 
Programs’ Effects on Broadband Adoption: 

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. 

NTIA and RUS Have Acted to Address the Variety of Challenges Awardees 
Identified in Completing Projects: 

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. 

Challenges: 

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. 

Table 5: Challenges Faced by BTOP and BIP Awardees: 

Challenge: Environmental review and compliance; 
BTOP: [Check]; 
BIP: [Check]. 

Challenge: Prevailing wage requirements; 
BTOP: [Check]; 
BIP: [Check]. 

Challenge: Permitting, right of way, and make-ready work; 
BTOP: [Check]; 
BIP: [Check]. 

Challenge: Weather and terrain; 
BTOP: [Check]; 
BIP: [Check] 

Challenge: Broadband fiber availability; 
BTOP: [Check]; 
BIP: [Check]. 

Challenge: Approval of contracts and plans by RUS; 
BTOP: [Empty]; 
BIP: [Check]. 

Challenge: Compliance with RUS reporting requirements; 
BTOP: [Empty]; 
BIP: [Check]. 

Challenge: Proposed changes to the Federal Communications Commission’s 
Universal Service Fund; 
BTOP: [Empty]; 
BIP: [Check]. 

Challenge: Staffing or expertise; 
BTOP: [Check][A]; 
BIP: [Empty]. 

Challenge: Contracting, procurement, and financing; 
BTOP: [Check][A]; 
BIP: [Empty]. 

Challenge: Technical issues; 
BTOP: [Check][A]; 
BIP: [Empty]. 

Challenge: Outreach and program participation; 
BTOP: [Check][A]; 
BIP: [Empty]. 

Source: GAO analysis of interviews and NTIA and RUS documents. 

[A] These challenges were identified as pertaining to BTOP PCC and SBA 
projects. 

[End of table] 

NTIA and RUS officials and awardees all identified challenges 
associated with environmental compliance, as BTOP and BIP awardees 
were required to comply with the National Environmental Policy Act 
[Footnote 14] and the National Historic Preservation Act.[Footnote 15] 
This involved working with state and federal agencies to address any 
environmental or historic preservation issues related to the project 
before construction could commence. According to our analysis of BTOP 
awardees’ first quarter 2012 reports to NTIA, 44 of 114 infrastructure 
awardees reported challenges associated with the environmental 
assessment and historic preservation review.[Footnote 16] Likewise, 
RUS officials told us that the environmental assessment process took 
significantly longer than anticipated and stated that one cause of 
this was a backlog within the state offices that conduct the 
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.[Footnote 17] 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…[and 
that] 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.[Footnote 18] 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.[Footnote 19] 

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. 

Agencies’ Actions to Address Challenges: 

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. 

Conclusions: 

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. 

Recommendation for Executive Action: 

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. 

Agency Comments and Our Evaluation: 

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 [hyperlink, 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. 

Signed by: 

Mark L. Goldstein: 
Director, Physical Infrastructure: 

[End of section] 

Appendix I: Scope and Methodology: 

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),[Footnote 20 (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. 

Progress of Programs: 

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. 

Effect of Programs: 

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. 

Challenges: 

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,[Footnote 21] 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. 

Agency Actions to Address Challenges: 

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. 

[End of section] 

Appendix II: Analysis of Employment Data Submitted by Program Awardees: 

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.[Footnote 22] 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.[Footnote 23] 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.[Footnote 24] 

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. 

Figure 3: FTEs Reported by BTOP and BIP Recipients, January 2010 
through June 2012: 

[Refer to PDF for image: 2 vertical bar graphs] 

FTEs reported by BTOP recipients: 
2010, Q1: 20; 
2010, Q2: 202; 
2010, Q3: 440; 
2010, Q4: 988; 
2011, Q1: 1,598; 
2011, Q2: 2,314; 
2011, Q3: 3,445; 
2011, Q4: 4,096; 
2012, Q1: 4,274; 
2012, Q2: 4,463. 

FTEs reported by BIP recipients: 
2010, Q2: 86; 
2010, Q3: 275; 
2010, Q4: 822; 
2011, Q1: 1,561; 
2011, Q2: 3,145; 
2011, Q3: 4,342; 
2011, Q4: 4,721; 
2012, Q1: 3,780; 
2012, Q2: 4,450. 

Source: GAO analysis of Recovery.gov data. 

Notes: FTE values are shown for each individual quarter and are not 
cumulative. 

Technical assistance awards for BIP are not included in the totals. 

[End of figure] 

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. 

[End of section] 

Appendix III: Comments from the Department of Agriculture: 

Note: GAO comments supplementing those in the report text appear at 
the end of this appendix. Page numbers in the draft report may differ 
from those in this report. 

USDA: 
United States Department of Agriculture: 
Rural Development: 
Office of the Under Secretary: 
1400 Independence Ave. S.W. 
Washington. DC 20250-0700: 

September 4, 2012: 

Mark L. Goldstein: 
Director, Physical Infrastructure Issues: 
U. S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC, 20548: 

Dear Mr, Goldstein: 

Thank you for providing the United States Department of Agriculture's 
(USDA) Rural Utilities Service (RUS) your Government Accountability 
Office (GAO) draft report entitled, "Recovery Act: Broadband Programs 
are Ongoing and Agencies' Efforts Would Benefit From Improved Data 
Quality," Report Number GA0-12-937 for review. USDA offers the 
following comments on the draft report and requests that a copy of 
these comments be included in your final report. USDA's response is 
focused. primarily on portions of the GAO report relating to USDA's 
RUS. 

We commend GAO for providing this report and a recommendation on ways 
we can better demonstrate the success of broadband deployments 
financed through the American Recovery and Reinvestment Act (Recovery 
Act). 

As background, USDA's RUS is a policy, planning and lending agency 
that makes loans, loan guarantees and grants available to finance 
rural electric, telecommunications and water and wastewater 
infrastructure. It oversees a $65 billion portfolio of rural 
infrastructure loans that it has awarded. These investments support 
the development of sustainable local and regional economies, and 
attract and leverage private capital in rural and tribal areas. 

Through the Revovery Act, RUS, alongside the Department of Commerce's 
National Telecommunications and Information Administration (NTIA), was 
given responsibility to provide financial resources to promote the 
expansion of broadband infrastructure throughout the United States. RUS 
used the 2.5 billion budget authority appropriated by the Recovery Act 
to make grants loans and loan/grant combination awards. In total for 
RUS' Broadband Initiatives Program (BIP), this level of funding 
supported more than $2.33 billion in grants and $1.19 billion in loans 
made to 320 projects totaling over $3.5 billion in program level. Of 
those 320 projects, there were 297 for infrastructure, 4 for satellite 
broadband service support and 19 for technical assistance, the 
majority of which went to tribal communities. 

Grant dollars were targeted to those areas with the greatest need of 
service and that were the most rural, Grant dollars were also used to 
leverage additional private investments in broadband infrastructure 
projects. RUS focused its efforts to help communities gain "sufficient 
access to high speed broadband service to facilitate rural economic 
development... " as required by the Recovery Act. 

Through DIP investments RUS broadband will connect nearly 7 million 
rural Americans, along with more than 360,000 businesses and more than 
30,000 critical community institutions, such as schools, healthcare 
facilities, and rural public safety agencies, to new or improved 
service. The projects funded will bring broadband service to 2.8 
million households, spanning across more than 300,000 square miles in 
45 states and 1 U.S. territory. These projects also overlap with
31 tribal lands and 125 persistent poverty counties, and they are 
estimated to create more than 25,000 immediate and direct jobs for 
rural workers in a variety of industries. 

Data provided by the United States Department of Education show that 
more than one million K-12 students attend school within areas served 
by BIP awards. More than 100 colleges and technical schools are 
located in areas served by BIP awards, Data provided by the United 
States Department of Health and Human Services show that nearly 600 
rural healthcare facilities are located in areas served by BIP awards. 
All of these healthcare facilities will gain access to advanced 
broadband services, which can expand the use of telemedicine and 
electronic medical records initiatives. 

The response to BIP was tremendous. Our funding ratio was roughly only 
one in ten applications approved. It was a rigorous competition with 
multiple cheeks to verify compliance with the statute and regulations. 
There were a number of good projects which simply could not be funded. 
We are hopeful that many of these applicants consider participating in 
our ongoing Farm Bill Broadband Loan Program and our Community Connect 
Grant program. Some are submitting new applications to bring needed 
services to rural areas. 

Winning an award in a competitive process is only the beginning. The 
Agency's 75-year history of scrutiny of projects continues throughout 
the project's life, Portfolio management is a Rural Development 
priority. That sustained level of vigilance, supervision and review 
has led to the rescission of 38 DIP awards. As a result, nearly $300 
million in program level funding has been returned to the Treasury. 

Before commencing BIP projects, recipients were required to execute 
RUS loan and grant agreements. They are also required to complete 
environmental and historic preservation reviews. In order to receive 
loan and grant funds, or "advances," under a loan or grant, the 
recipient project must be fully compliant with these requirements and 
can only submit a request for funds to the RUS staff after 
requirements are met. 

RUS technical and financial staff reviewed the requests for advances 
to ensure that they comply with the BIP requirements and are 
consistent with the budget and network system design submitted that 
was approved by RUS during the application process. Recipients 
generally determine the timing of the loan/grant advances. Under the 
Recovery Act, contracts signed by awardees require that all loan/grant 
funds must be advanced by September 30, 2015, or they will be 
rescinded by RUS and returned to Treasury. In light of the current 
economic climate and the urgent need to put Americans back to work, 
the Administration directed agencies to accelerate spending of the 
remaining Recovery Act funding. Accordingly, RUS and senior USDA 
officials have repeatedly encouraged awardees to complete Recovery Act 
projects as quickly as possible, and have asked each awarder for a 
schedule by which they expect to expend funds and complete their 
projects. RUS field employees — our General Field Representatives 
(GFRs) and Field Accountants (FAs) — vigorously monitor the progress 
of construction and compliance by recipients with BIP requirements, 
together with a highly competent and focused National Office staff. 

The vast majority of the B1P awards were obligated between. March and 
September 2010. Projects are progressing well and within expectations. 
RUS has worked closely with Federal and state partners to complete 
required reviews and to address regulatory or processing issues. The
Agency is working closely with awardees to expedite project 
construction. 

RUS manages a Telecommunications program of approximately $4 billion; 
and makes approximately $1 billion in additional loans and grants per 
year. With the $3.5 billion in BIP awards, our Telecommunications 
portfolio nearly doubled in less than a year. This tremendous increase 
in our portfolio had to be managed in a prudent manner. It also 
contrasts with NTIA's Broadband Technologies Opportunity Program 
(BTOP) which was solely a grant program. As such, RUS' primary goal 
was to collect accurate and timely financial data from awardees. As a 
lending institution, this is critical to ensuring that the taxpayer's 
investment is properly secured and that the project is both 
sustainable and financially viable well into the future. 

Additionally, while both RUS and NTIA were authorized to utilize three 
percent of Recovery Act funds for Salary & Expenses (S&E) through 
September 30, 2010, RUS has continued to manage its Recovery Act 
portfolio without any increase in its S&E budget since that time.
Despite no additional S&E funds, Rural Development was able to 
redirect resources to ensure that the BIP program received proper 
oversight. Staffing was limited and the Agency made the conscience 
decision to continue to collect rigorous financial data and curtail
collection/verification of aggregated non-financial data until after 
the awards were under way. 

The Draft GAO Report negatively contrasts the data collections between 
both the BIP and BTOP programs, contending that BIP does not have the 
same data as BTOP. While we agree that RUS focuses primarily on 
financial data, we do not agree that it is less reliable than non-
financial data. Financial and non-financial data collections are used 
to measure different results. As noted in the GAO report, BTOP focused 
on middle mile projects which do not provide service to end-users 
(such as households and businesses), but instead provide a link from 
the internet backbone to lire networks of local service providers. RUS 
primarily financed last-mile projects that provide service to end-
users such as household and businesses. As a result, the performance 
measures for the program should be different, For a middle mile 
project, the number of fiber miles laid is a valid measure of 
performance. However, for a last mile project, the number of fiber 
miles laid is not as relevant as the number of subscribers. We believe 
the Draft Report's attempt to compare data between the Agencies does 
not recognize that the projects financed by the two Agencies have 
different goals and purposes. [See comment 1] 

We also disagree with the Draft Report's assertion that RUS does not 
have adequate data to measure the success of the BIP program. RUS has 
extensive reporting and tracking mechanisms. As an experienced lender 
on broadband deployments, RUS already had tools in place to monitor 
the performance of projects and to be able to ascertain performance 
measurements, In addition, RUS built additional tracking tools to 
monitor the performance of BIP projects. These tools are discussed in 
more detail below along with your Draft Findings and Recommendation for
Executive Action. [See comment 2] 

Highlights Page: This page infers that RUS only recently started 
collecting non-financial data and that this data was not reliable. And 
as a result, RUS would struggle to demonstrate the progress and 
effectiveness of the BIP program. These broad statements only take 
into account the fact that RUS recently starting tracking fiber miles 
and access points on an aggregated basis. From Day One, through the 
approval of construction contracts, RUS has been monitoring the 
constriction of fiber facilities and the installation of access points 
on a project by project basis. As a lender, there was no need to track 
this at an aggregated level. RUS can readily demonstrate the progress 
and effectiveness of the Bill program. [See comment 2] 

The Highlights page also references a RUS tool that was developed to 
assist staff in quality control of the subscribership data reported by 
awardees. The most important part of this process is not referenced 
and should be included — that these results are provided only after 
extensive oversight and consultation that the RUS field staff conducts 
with awardees on an ongoing basis. [See comment 3] 

Page 3: In the second paragraph, the statement is made that RUS did 
not collect data comparable to N'FIA and could not assure the quality 
of their data. As previously indicated, due to the differences in the 
type of projects financed, the data collected should be different. 
Also, although RUS may not have collected data comparable to the 
metrics that NITA uses, the data that RUS collects is more detailed 
than NTIA, is very reliable, and its source is RUS review and approval 
of actual construction contracts. The contracts are tracked against 
the construction that was approved in the application for each type of 
construction that was proposed. [See comment 2] 

Page 8: At the bottom of the first paragraph the statement is made 
that RUS requires that BIP awardees submit quarterly reports that 
provide subscribership data. This is a correct statement, but it does 
not indicate that these quarterly reports also include financial 
statements consisting of Income Statements, Balance Sheets and Cash 
FloW Statements. Again, as a lender, RUS collects extensive financial 
data from its awardees to ensure that the project is built according 
to the approved application and contracts, and is sustainable in the 
long-term. [See comment 4] 

At the bottom of the second paragraph it is inferred that RUS did not 
initially establish indicators to measure the deployment of 
infrastructure as did NTIA. This is an incorrect statement. RUS' 
entire monitoring process tracks the deployment of infrastructure in a 
very detailed manner. For any BIP award, RUS has the ability to detail 
every piece of equipment purchased or number of fiber miles deployed. 
There was no need to establish special indicators with the processes 
that have been employed for monitoring the projects as these processes 
inherently monitor the progress of deployment. [See comment 2] 

Page 12: The first paragraph states that RUS did not establish non-
financial performance metrics. This is incorrect. Please reference the 
comments provided above for Highlights Page, Page 3 and Page 8. RUS 
did not establish the same type of metrics as NTIA because NTIA's 
awarders were primarily for middle mile projects and RUS' awarders 
were primarily last mile projects. Tracking the aggregated number of 
fiber miles or access points for last mile projects is of very 
negligible value. Last mile projects need to be tracked on an 
individual basis and our processes were established with this in mind. 
[See comment 1] 

The last paragraph again makes the incorrect statement that RUS did 
not begin collecting information until this year and that the quality 
of the data cannot be assured, Please refer to previous comments. 

Page 17: Although the second paragraph indicates that RUS implemented 
quality control procedures for the collection of subscriber data by 
developing a tool for staff, the Draft Report does not recognize the 
data sources for this information or the fact that RUS field staff 
provide extensive contact and guidance to awardees. [See comment 35] 

Page 23: Although the last paragraph acknowledges that NTIA has 
developed monitoring processes to identify challenges with projects, 
it does not recognize that RUS has implemented a detailed review 
process to identify issues with the 1.31P awards and is constantly 
providing guidance and assistance to the awardees to overcome any 
issues with the performance of the award. These processes consist of 
the BIP Expenditure Report, Draw Throughput Report, Dashboards and 
Financial Reports, as well as many other levels of monitoring. [See 
comment 5] 

Page 24: In the conclusion, the Draft Report again indicates that RUS 
did not initially collect non-financial reporting data and that the 
data it now collects has quality issues. As previously indicated, this 
is an inaccurate assertion. [See comment 6] 

Recommendation for Executive Action: 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 RIP projects. RUS has already 
taken steps to improve the quality of its da4 the number of fiber 
miles and wireless access points for BIP, the results of which will be 
available later in calendar year 2012. [See comment 6] 

Again, thank you for your continuing oversight of these critical 
Recovery Act projects. RUS is proud of our accomplishments in bringing 
broadband to unserved and underserved through these precious Recovery 
Act resources and will continue to monitor, track and report on their 
successful outcomes and value to America. 

If you have any questions, please contact John Dunsmuir, Acting 
Director, Financial Management Division, at (202) 692-0080. 

Sincerely, 

Signed by: 

Dallas Tonsager: 
Under Secretary: 

The following are GAO’s comments on the Department of Agriculture’s 
letter dated September 4, 2012. 

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. 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 
Mark L. Goldstein, (202)512-2834 or Goldsteinm@gao.gov. 

Staff Acknowledgments: 

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. 

[End of section] 

Footnotes: 

1. The term broadband commonly refers to high speed Internet access. 
GAO, Telecommunications: Broadband Deployment Is Extensive throughout 
the United States, but It Is Difficult to Assess the Extent of 
Deployment Gaps in Rural Areas, [hyperlink, 
http://www.gao.gov/products/GAO-06-426] (Washington, D.C.: May 5, 
2006). 

2. Pub. L. No. 111-5, 123 Stat. 115 (2009). 

3. Of the $4.7 billion provided to NTIA, approximately $293 million 
was used to fund 56 grants to states and territories for the purposes 
of gathering broadband data in order to develop and maintain a 
nationwide map on the availability of broadband service, with some 
funds to be transferred to the Federal Communications Commission for 
the development of the national broadband plan. These activities are 
not included in our review. Recovery Act, 123 Stat., 128 and div. A, 
title VI, 123 Stat., 512, codified at 47 U.S.C. § 1305. 

4. Recovery Act, div. A, title I, 123 Stat., 118-119. 

5. Several factors contribute to the discrepancy between the funds 
appropriated for BTOP and the funds awarded. On August 10, 2010, 
Congress rescinded $302 million from BTOP, reducing the program’s 
funding to approximately $4.4 billion. See Pub. L. No. 111-226, § 302, 
124 Stat. 2389, 2404. NTIA also terminated one award, had one awardee 
not accept an award, and four awardees terminate their project 
voluntarily. 

6. The amount of funds awarded by RUS exceeds its appropriation 
because RUS can award and obligate funds in excess of its budget 
authority through the use of loans. For grants, the face amount of 
each grant is charged against RUS budget authority. However, the 
Federal Credit Reform Act of 1990, Pub. L. No. 101-508, div. A, title 
XIII, § 13201(a), 104 Stat. 1388-609, codified at 2 U.S.C. ch. 17A, 
subch. III, requires RUS to account for the budgetary impact of loans 
by estimating the expected net loss (or gain) of loans. This net 
amount, which is estimated by calculating the net present value of all 
cash flows to and from RUS over the lifetime of the loans, is referred 
to as the subsidy cost of the loans. RUS must charge the subsidy cost 
of loans to its budget authority. In addition, as of June 2012, RUS 
had terminated 38 BIP awards. 

7. GAO, Recovery Act: Broadband Program Awards and Risks to Oversight, 
[hyperlink, http://www.gao.gov/products/GAO-11-371T] (Washington, 
D.C.: Feb. 10, 2011); Recovery Act: Further Opportunities Exist to 
Strengthen Oversight of Broadband Stimulus Programs, [hyperlink, 
http://www.gao.gov/products/GAO-10-823] (Washington, D.C.: Aug. 4, 
2010); and Recovery Act: Agencies Are Addressing Broadband Program 
Challenges, but Actions Are Needed to Improve Implementation, 
[hyperlink, http://www.gao.gov/products/GAO-10-80] (Washington, D.C.: 
Nov. 16, 2009). 

8. Recovery Act, div. A, title IX, § 901, 123 Stat.,191. Updates on 
GAO’s oversight of Recovery Act funds can be found at: [hyperlink, 
http://gao.gov/recovery]. As of July 20, 2012, the Department of the 
Treasury had paid out $255.2 billion in Recovery Act funds for use in 
states and localities. 

9. Recovery Act, div. A, title XV, § 1512(e), 123 Stat., 287. FTE data 
provide insight into the use and impact of the Recovery Act funds, but 
recipient reports cover only direct jobs funded by the Recovery Act. 
These reports do not include the employment impact on suppliers 
(indirect jobs) or on the local community (induced jobs). Both data 
reported by recipients and other macroeconomic data and methods are 
necessary to understand the overall employment effects of the Recovery 
Act. 

10. 74 Fed. Reg. 33104, 33110 (2009). 

11. Pub. L. No. 111-5, § 1512(e), 123 Stat. 115, 288. FTE data provide 
insight into the use and impact of the Recovery Act funds, but 
recipient reports cover only direct jobs funded by the Recovery Act. 
These reports do not include the employment impact on suppliers 
(indirect jobs) or on the local community (induced jobs). Both data 
reported by recipients and other macroeconomic data and methods are 
necessary to understand the overall employment effects of the Recovery 
Act. OMB defines FTEs as the total number of hours worked and funded 
by Recovery Act dollars within the reporting quarter divided by the 
quarterly hours in a full-time schedule. OMB Memorandum, M-10-08, 
Updated Guidance on the American Recovery and Reinvestment Act – Data 
Quality, Non-Reporting Recipients, and Reporting of Job Estimates 
(Dec. 18, 2009). 

12. NTIA adjusted the projected benefits estimated in BTOP recipients’ 
initial applications. NTIA revised projections to reflect changes in 
the projects that occurred after awards were made, such as rerouting 
of planned broadband networks because of environmental issues or 
changes in partners. Total miles were reduced from 127,072 to 75,000, 
community anchor institutions connected were reduced from 29,557 to 
15,000, new workstations were reduced from 35,334 to 35,000, and 
subscribers were reduced from 785,862 to 500,000. NTIA officials told 
us they raised three of the projections to 110,000 miles, 18,000 
community anchor institutions, and 37,500 workstations. 

13. 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. 

14. Pub. L. No. 91-190, 83 Stat. 852 (1970), as amended, codified at 
42 U.S.C. ch. 55. 

15. Pub. L. No. 89-665 (1966), as amended, codified at 16 U.S.C. ch. 
1A, subch. II. 

16. As mentioned previously, BTOP awardees are required to submit 
reports on a quarterly basis that among other things, discuss projects’
 progress made during the preceding 3 months and discuss challenges as 
to why projects may not have met their targets. These reports only 
include the challenges awardees reported during this period. Awardees 
may have experienced these or other challenges in prior quarters. 

17. Recovery Act, div. A, title XVI, § 1606, 123 Stat. 303. 

18. We previously reported on the need for FCC to reform the Universal 
Service Fund. GAO, Telecommunications: FCC Has Reformed the High-Cost 
Program, but Oversight and Management Could be Improved, [hyperlink, 
http://www.gao.gov/products/GAO-12-738] (Washington, D.C.: July 25, 
2012). 

19. In the Matter of Connect America Fund, 26 FCC Rcd. 17663 (2011), 
as corrected, 27 FCC Rcd. 4040 (2012). 

20. Pub. L. No. 111-5, 123 Stat. 115 (2009). 

21. NTIA requires that BTOP awardees submit quarterly and annual 
progress reports. 

22. Pub. L. No. 111-5, § 1512(e), 123 Stat. 115, 288 (2009). FTE data 
provide insight into the use and impact of the Recovery Act funds, but 
recipient reports cover only direct jobs funded by the Recovery Act. 
These reports do not include the employment impact on suppliers 
(indirect jobs) or on the local community (induced jobs). Both data 
reported by recipients and other macroeconomic data and methods are 
necessary to understand the overall employment effects of the Recovery 
Act. 

23. In addition to conducting our analyses of recipient report data 
for BIP and BTOP programs under the Recovery Act, we continued, as in 
prior rounds, to perform edit checks and analyses on all prime 
recipient reports to assess data logic and consistency and identify 
unusual or atypical data. 

24. We did notice, however, in our review of BIP’s FTE data that some 
recipients did not report their FTEs in accord with RUS guidance. 
Recipients that received awards that were a combination of loans and 
grants were to report FTEs separately for each component of the award. 
RUS officials stated that they instructed the recipients that funds 
should be drawn down proportionally from the loan and grant, and to 
divide FTEs along that same proportion. Thus, if the award is 50 
percent loan and 50 percent grant, then FTEs for the entire project 
were to be divided evenly between the grant and the loan reports for 
the reporting quarter. We observed that there were recipients who 
received combination awards with different, unequal grant and loan 
award amounts, but reported FTEs equally split between the loan 
quarterly report and the grant quarterly report. The apportioning of 
the FTEs did not match the apportioning of the loan and grant amounts. 
RUS officials stated that without following up with the individual 
recipients, they could not determine the reason for this. 

[End of section] 

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