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Posted at 01:11 PM ET, 11/01/2011

Commerce Department revokes $80M Internet stimulus grant

The Commerce Department revoked a $80.6 million grant to bring broadband Internet connections to Louisiana, saying that the state fell behind schedule and changed its original plan for the stimulus funds.

The vast majority of funds will be returned to the U.S. Treasury, except for $594,000 that has been delivered to the state already, according to the Commerce Department’s National Telecommunications and Information Administration.

The NTIA’s grant to Louisiana Broadband Alliance was intended to create a fiber optic network stretching 900 miles to the most economically distressed areas of the state. Six state agencies said they would coordinate on the project, which was to provide access to schools, libraries and health care facilities.

But the project didn’t meet the NTIA’s deadlines, and the state changed plans and didn’t give enough technical and financial details to ensure the project would be completed.

“We have worked closely with the state throughout the last several months to rescue this project but have now concluded that we have to move on,” said Assistant Secretary of Commerce Lawrence Strickling, who heads the NTIA.

The NTIA and Department of Agriculture’s Rural Utilities Service have awarded $7.2 billion in stimulus funds during the Obama administration aimed at bringing high-speed Internet connections to rural areas.

The Louisiana project is the fourth one to fail among the NTIA’s 233 awards. The agency and the Agriculture Department have hailed the success of other projects, saying that generally the stimulus programs have been an overall success.

But the failure of projects supported by grants and loans from the federal government have also come under greater scrutiny by some Republican lawmakers. Several have questioned the distribution of taxpayer dollars into ill-conceived projects such as the bankrupt solar panel firm Solyndra.

The cable industry’s lead trade group, the National Cable and Telecommunications Association, released a study last spring that showed that some major USDA stimulus broadband grants and loans were overlapping with existing services.

Last month, separate from stimulus projects, the USDA’s 2008 $267 million loan to rural broadband firm Open Range collapsed. Some Democrats called for an investigation into the the Bush-era loan.

By  |  01:11 PM ET, 11/01/2011

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