Recovery Act Funds Sit Still

While US agencies cheer last week's awarding of more American Recovery and Reinvestment Act (ARRA) funds, they might be biting their nails, too, because they've only got until Sept. 30 to hand out more than half of their planned $7.2 billion in grants and loans.

"That's pretty sad, to realize we're not even halfway in," says Teresa Mastrangelo, principal analyst with Broadbandtrends.com.

Another $800 million of the money got allocated last week, the first awards from the second round of applications.

But according to a White House summary of that announcement, that brings the total to $2.7 billion in grants and loans allocated.

Mastrangelo's guess is that a big chunk of the money will get assigned in mid-August, because that's when the National Telecommunications and Information Administration (NTIA) has to make its next progress report to the US Congress. (Neither Mastrangelo nor Light Reading had the Rural Utilities Service (RUS) schedule handy, but it seems likely the agencies would have to report at about the same time.)

The Recovery Act has been slow going all along, thanks in part to the 2,200 applications received for the first round, with requests totaling seven times the $4 billion available in the round. The second round was likewise crowded but not as insane, with $11 billion in requests for $2.6 billion in funds. (See Recovery Act: Round One Brings 'Nearly $28B' in Bids and Recovery Act: $11B Pours In for NTIA's Round 2.)

There might not be a third round. Last week, the House of Representatives' appropriations committee proposed using $602 million of Recover Act money to help offset discretionary funding that's mostly going to the wars in Afghanistan and Iraq. It's among a few dozen rescission being suggested. The amount would appear to dry up what's left of the Recovery Act pool.

The second-round awards haven't revealed any surprise trends, Mastrangelo says. As expected, most of the money is going toward fiber-based projects, rather than copper, cable, or wireless. (See Recovery Act: Cable Shortchanged and The Week in WiMax.)

One difference from Round One is that the applicants are putting up larger sums of private funding to go alongside the matching grants. "Maybe they learned if they can provide more money up front and request less grant money up front, they have a better chance," she says.

Even for those who've been approved, the waiting game doesn't necessarily stop. "We're still aware of a lot of applicants for Round 1 who actually haven't seen Dime One," Mastrangelo says.

— Craig Matsumoto, West Coast Editor, Light Reading

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