The Agriculture Dept.’s Rural Broadband Loan Program needlessly s...
The Agriculture Dept.’s Rural Broadband Loan Program needlessly subsidizes broadband entries in places service is provided, Qwest told Agriculture Secy. Mike Johanns in a letter Thurs. Qwest “supports the intent” of the program, part of the Rural Utility Service…
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(RUS), but calls it poorly run. “Loans are being provided in markets where there are already two, three or sometimes as many as four broadband service providers,” Qwest Senior Vp Gary Lytle said. That boils down to subsidizing competitors to Qwest and other providers, Lytle said. “This practice has several drawbacks,” he said: (1) Subsidies in “already served and competitive markets” deny money to areas lacking high-speed Internet access. (2) “Government subsidies in competitive markets undermine the risk-capital and shareholder funds that commercial service providers have invested.” (3) Commercial broadband providers have less incentive to invest in un- served areas “for fear of having to compete against a government subsidized competitor.” Lytle was “encouraged” to learn the Agriculture Dept. is working on new regulations that may focus lending better, he said: “We support your efforts to reform this program.” Qwest has been lobbying to revise House and Senate agriculture bills so they reform the broadband loan program, whose enabling legislation is “too loosely written,” he said.