House E&C Seeks Documents on RUS Broadband Loan to Bankrupt Open Range

The House Energy & Commerce Committee is seeking info on a $267 million broadband development loan from the Rural Utilities Service to Open Range Communications, which has recently filed for bankruptcy.

The loan precedes RUS' loans of billions under a broadband stimulus bill, and was approved in March 2008.

Open Range apparently received the biggest loan the program issued, according to the legislators, which included both Republican and Democratic leadership.

Open Range filed for bankruptcy on Oct. 6 and could leave the taxpayers on the hook for $73.5 million, the amount RUS had already ponied up. In addition, Open Range could owe another $26 million to businesses that did work for it, they said.

The RUS program, which is headed by former FCC Commissioner Jonathan Adelstein, has come under fire from the Department of Agriculture's Inspector General, who raised concerns about the majority of the broadband loans and loan guarantees it reviewed ($340 million worth out of $599 million) either because of incomplete applications, defaulted loans and funds used for "inappropriate purposes."

The IG also said the program had not focused on unserved rural communities, something cable operators have expressed their own concerns about.

In a letter to Adelstein,
the committee asked for the application and any related documents, including the decision to approve the loan.

They did not give Adelstein a deadline for the document drop, but did say, at his earliest convenience, they wanted him to meet with committee staffers to discuss the document production.

Signing on to the loan were the chairs and ranking members of the full committee, Communications Subcommittee, and Government Oversight and Investigations Subcommittee.

On another front, committee Republicans have been pushing for more info on bankrupt energy company Solyndra and the half-billion government loan it received.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.