The Communications and Internet Subcommittee will examine how well the administration did in allocating the $7.2 billion included in the 2009 economic stimulus package for broadband. The funding was split between the Commerce Department’s National Telecommunications and Information Administration, which got $4.7 billion, and the Agriculture Department’s Rural Utilities Service, which received the remaining $2.5 billion.

The panel, chaired by Rep. Greg Walden (R-OR 2nd District), also will debate draft legislation that would require the return to the federal treasury of any broadband funds that have been found to have “demonstrated an insufficient level of performance or wasteful or fraudulent spending,” according to copy of the draft bill obtained by Tech Daily Dose.

This is an important issue. In the past, we argued that the broadband stimulus funds should be allocated based on three criteria:

1. Extending broadband facilities to unserved areas.
2. Supporting programs that enable underserved populations to acquire and to make effective use of broadband service where it is already available.
3. If funds remain, extending broadband facilities to underserved areas defined in terms of below-standard speed and other qualitative measures relative to today’s current-generation broadband services.

Among the witnesses will be Gary Shorman, head of NCTA member company and Kansas small cable operator Eagle Communications. Shorman will highlight a $101 million award that is being used to “overbuild” a broadband network in Hays, KS where Eagle and AT&T already provide service. Eagle and NCTA both have objected to the project because millions of federal dollars will be spent to build a network in a well-served community while other unserved areas will remain without any access to broadband.

Eagle strongly supports the goals of the broadband funding program, but Shorman will ask that this project’s funding be withdrawn and instead be returned to the Treasury.

Eagle is a small employee-owned business based in Hays, the largest community in their service area, with a population of just over 20,000. 98 percent of the homes passed by Eagle have access to broadband connections of 6 Mbps; 90 percent can get 10 Mbps; nearly 40 percent can purchase wideband service with 50 Mbps or better.

Also appearing at the hearing will be representatives from the Departments of Agriculture and Commerce, the Government Accountability Office, and Merit Network, Inc.

UPDATE: Coverage of the hearing from Broadcasting & Cable:

One thing [Democrats & Republicans] agreed on Thursday at the Subcommittee’s first hearing under Republican leadership was that the Department of Commerce and Ag Department’s programs to fund billions of dollars in broadband infrastructure and education programs would need ongoing oversight to make sure the projects were giving the public bang for their increasingly precious buck.

The letter, which is posted on NCTA’s website, lays out three key goals:

• Extend broadband facilities to unserved areas.
• Support programs that enable underserved populations to acquire and to make effective use of broadband service where it is already available.
• If funds remain, extend broadband facilities to underserved areas defined in terms of below-standard speed and other qualitative measures relative to today’s current generation broadband service.

This is very similar to the points that McSlarrow made in a video we made in late January.

UPDATE: Also see this coverage from BroadbandCensus.com.

The letter (posted on NCTA’s website) supports unifying the $9 billion in broadband grant funding at NTIA; suggests that infrastructure funding should be targeted to areas without broadband service; and proposes that private broadband providers should be eligible to receive funding directly without the need for prior approval from governmental agencies.

This is in line with earlier comments from McSlarrow on how best to improve America’s broadband infrastructure. You may have seen last week’s video, in which he discussed what goals are best considered when debating current broadband stimulus proposals.

In December of last year, in a letter to Presidential Transition Team member Susan Crawford, McSlarrow offered the cable industry’s perspectives on the communications marketplace. In that letter, he proposed that stimulus measures should be targeted to unserved areas, should be technology-neutral, should address the needs of low-income households, and should recognize the need for making computers or laptops available to those that can’t afford such technology. Other issues are touched on in the letter, which you can also find on NCTA’s website.