NTIA Can’t / Won’t Tell If Its Stimulus Broadband Program Actually Stimulates Jobs

by Mike Wendy on December 5, 2011

The National Telecommunications and Information Administration (NTIA) has some splainin’ to do.   It seems it can’t (or won’t) tell if its Stimulus program – the Broadband Technology Opportunities Program (BTOP) – has produced any real jobs.

If you follow the tech space, you may know that the American Recovery and Reinvestment Act (ARRA) jointly gave NTIA and the Rural Utilities Service (RUS) $7.2 billion to deploy broadband infrastructure throughout the U.S. The BTOP program got $4.7 billion of that, making it one of the NTIA’s biggest grant programs.  Thousands competed for the money; 233 applicants / projects won.

As directed by the ARRA, one of BTOP’s goals was to quickly create jobs.  This White House document talks about the importance of that goal, noting:

“These critical broadband investments will create tens of thousands of jobs and stimulate the economy in the near term.”

So, being almost three years out from passage, where are all of those jobs now?

Who knows?

In April this year, NTIA’s head Larry Strickling attempted a guess, asserting before Congress:

“…Last quarter, grant recipients reported funding approximately 1,000 jobs, and, to date, grantees have installed more than 4,000 computers for public use, with many of our grantees reporting higher than expected use at computer centers.  Over 150,000 hours of broadband training has been provided to over 65,000 people…” (Emphasis added)

But, anything more on jobs numbers is wanting from the agency.  Apparently, though the NTIA collects the data from recipients (which seems ripe for potential conflict), it does not tally the metrics.

I asked NTIA officials about this and was shepherded onto an immensely large (it choked my MacBook) and largely useless Recovery.gov website outlining all ARRA grants.  Useless – because the grants that the NTIA was prosecuting were either not properly listed (being awarded by other sub-agencies), or the jobs tallies associated with any identifiable grants were often non-standardized gobbly-gook.

I pressed further about this and got handed-off to the OMB.  Once there, an official directed me to this document, which “helps” recipients estimate jobs under the ARRA – from pages 10 to 24. Additionally, the OMB official informed me that Recovery.gov would have the jobs numbers I was looking for, though they would just be numbers of direct jobs reported for the most recent quarter.

BTOP job creation = "blank" says Recovery.gov website

Here’s where that led to– a big fat goose egg (as the nearby screenshot shows).

As the Wall Street Journal pointed out recently in a seemingly unrelated piece on green jobs “generated” by the ARRA and the Administration:

Liberals know all about multipliers, which are the central operating conceit of modern Keynesian economics. The entire public justification for the $820 billion Obama stimulus was the claim that every $1 of spending would have a multiplier effect of 1.5 or more and thus create millions of new jobs.

Well, we’re in the “near term” on this ARRA program, and, clearly, “tens of thousands of jobs” haven’t yet “multiplied” – at least not as far as the NTIA or Recovery.gov is willing to tell.

You’d think if BTOP was even marginally successful, the government would want to trumpet that.  This seems all the more important given the Solyndra debacle and other known (or soon to be known) ARRA infirmities.

But, no.

Undaunted, the Administration continues to adhere to its Keynesian multiplier, pushing for another “jobs bill,” which looks like a smaller version of 2009’s ARRA.

And, the FCC, too, has gotten into the act.

Two weeks ago, the agency said its new $4.5 billion broadband subsidy plan will create 500,000 new jobs by spreading broadband to the unserved hinterlands (at the same time, the FCC torpedoed AT&T’s merger with T-Mobile, which, according to company claims, would have allowed it to invest $8 billion for broadband infrastructure in rural areas, too, creating approximately 96,000 direct, indirect and induced jobs).

Now, I believe in the basic math of jobs multipliers.  In this regard, it’s pretty simple: More broadband investment = GDP growth = more jobs.  With BTOP, however, the primary steward of the program – NTIA – has inexplicably lost its calculator.  I’m not even talking about multipliers.  Nothing’s adding up.

If NTIA can’t properly explain this program in the simplest terms to the American taxpayer, who could?  Moreover, what does this say for other similarly situated ARRA projects (like Solyndra, etc.)?

Though he was commenting on an entirely different topic, chief AT&T lobbyist, Jim Cicconi, hit the nail on the head last week:

“This notion, that when government spends money on broadband it creates jobs, but when a private company spends money it doesn’t, is clearly wrong on its face.”

Perhaps this is the reason why the NTIA can’t find its abacus?  The jobs just aren’t there to count.  Failing this basic metric, other “benefits” from the program must surely be questionable, too.

NTIA – would it be too much to suggest that if you want my tax dollars, you could give me a better indication of what I’m getting in return?  If you can’t, or it’s beneath you, remind me why you’re around in the first place?

November cannot come too soon.

Andy December 6, 2011 at 2:43 pm

It figures that the AT&T lobbyists are behind this story. If you believe in the basic math of job multipliers as you say you do, you would know that this program from the very beginning has estimated that for every $92,000 of government spending, 1 job-year is created. You can find the logic in that estimate in a document authored by the Council of Economic Advisers titled, “Estimates of Job Creation From the American Recovery and Reinvestment Act of 2009”. See: http://www.whitehouse.gov/administration/eop/cea/Estimate-of-Job-Creation

Each application for funding applied this multiplier and reported the result. If you would like to recalculate the impact, just divide the amount that has actually been spent to date by $92,000. It’s really that simple. No investigative reporting needed. By the way….if your computer choked trying to get the data that you reported, maybe AT&T and the boys need to do a better job of providing you adequate and affordable broadband?

Mike Wendy December 6, 2011 at 4:04 pm

Those are estimates. For the real numbers, one has to dig through now 230 spottily-reported grants reports. The NTIA could not provide me with a simple number of the real (not estimated ) jobs brought about by the program thus far. I believe this is a major failing of the agency – estimates are nice, but one has no way to know if this is working as spun.

GP December 7, 2011 at 1:14 am

1. You can access Broadband Related Project Reports through the Advanced Data Search

2. You can interactively explore the data using Recovery Explorer
Click on any Link e.g. STATES BY NUMBER OF JOBS LAST QUARTER and then select a filter for CFDA code 10.787 — Broadband Initiatives Program

3. You can download the Cumulative National File
and filter the Excel/CSV file for all Awards with CFDA = 10.787.

Mike Wendy December 7, 2011 at 2:10 am

GP – this is tremendously useful information. Thanks for this guidance.

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