COVID-19 ReConnect Program — Informational Report 09801-0001-23, September 2023

Summary

A USDA Office of Inspector General informational report, 09801-0001-23, dated September 2023, on the ReConnect Program, which funds rural broadband. It explains that the program began as the Rural eConnectivity Pilot Program under the Consolidated Appropriations Act of 2018 and cites FCC figures that over 22 percent of rural Americans lacked fixed broadband versus 1.5 percent in urban areas. The CARES Act gave the program $100 million for grants in March 2020, with 9 projects totaling nearly $85 million announced in 2020, two more projects of more than $12 million funded in 2021, and $3 million designated for oversight and underwriting. It also notes two questioned applications valued at more than $17.8 million.

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Issuer: Source documents
Document type: Covid19 Reconnect Program
Case: Covid19 Reconnect Program

Cite this document

“COVID-19 ReConnect Program — Informational Report 09801-0001-23, September 2023.” Original at usdaoig.oversight.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/covid19-reconnect-program/, SHA-256 25d67425daad725d6207ed1c56ab62a0c5875fb5c7b2fa05a45b2e9d3eb579aa.

Full text

The
Coronavirus
Aid, Relief,
and Economic
Security Act

COVID 19 - ReConnect Program – Informational Report 09801-0001-23 - September 2023

Reliable and affordable broadband 1 internet is fundamental for economic activity in a diverse set of
industries throughout the rural United States. 2 The Consolidated Appropriations Act of 2018 established
the Rural Utilities Service (RUS) Rural eConnectivity Pilot Program (now known as the ReConnect
Program). 3 As reported in 2020 (based on 2018 data) by the Federal Communications Commission
(FCC), over 22 percent of Americans in rural areas lack coverage from fixed terrestrial broadband
internet, as compared to only 1.5 percent of Americans in urban areas. 4 In its 2021 (based on 2019 data)
report, FCC noted the percentage of rural Americans with insufficient access to broadband had dropped
to approximately 17 percent. 5

The Coronavirus Disease 2019 (COVID-19) pandemic highlighted the gap between those with access to
broadband and those without access, known as the “digital divide.” 6 As stated in a United States
Department of Agriculture (USDA) press release, “[t]he need for rural broadband has never been more
apparent than it is now – as our nation manages the coronavirus national emergency. Access to
telehealth services, remote learning for school children, and remote business operations all require
access to broadband.” 7 The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided
funding to the ReConnect Program in response to the COVID-19 pandemic. 8

As part of the Office of Inspector General’s oversight responsibility, we are issuing this informational
report to provide general program information and highlight the CARES Act funding for the ReConnect
Program. 9

1
Broadband service is defined as “any fixed terrestrial technology, including fixed wireless, having the capacity to transmit
data to enable a subscriber to the service to originate and receive high quality voice, data, graphics and video." See 7 C.F.R. §
1740.2.
2
“Broadband” is another term for high-speed internet access.
3
Consolidated Appropriations Act, 2018, Pub. L. No. 115-141 § 779, 132 Stat. 348, 398 (2018).
4
Federal Communications Commission FCC 20-50, ”2020 Broadband Deployment Report” (Apr. 24, 2020).
5
Federal Communications Commission FCC 21-18, “Fourteenth Broadband Deployment Report” (Jan. 13, 2021).
6
CRS, USDA’s ReConnect Program: Expanding Rural Broadband, R47017 (updated Dec. 14, 2022).
7
USDA Press Release, Trump Administration Invests More Than $3 Million in High-Speed Broadband in Rural North
Carolina, No. 0331.20 (July 27, 2020).
8
CARES Act, Pub. L. No. 116-136, § 11004,134 Stat. 281, 510, (2020).
9
Audit Report 09601-0001-23, Rural eConnectivity Pilot Program (ReConnect Program)—Award Process, July 2023.

INSPECTION REPORT 09801-0001-23 1
Graphic 1: Barriers to Broadband Service in Rural Areas. 10

The Big Picture of the ReConnect Program

The ReConnect Program provides grants and low-interest loans to eligible internet service providers in
areas without sufficient access to broadband. 11 USDA’s Reconnect Program is an investment to bring
reliable and affordable broadband to rural areas. The ReConnect Program offers three different funding
categories for interested applicants (see below):

10
CRS, USDA’s ReConnect Program: Expanding Rural Broadband, R47017 (updated Dec. 14, 2022).
11
The CARES Act defines sufficient broadband as 10 Mbps downstream and 1 Mbps upstream.

INSPECTION REPORT 09801-0001-23 2
100-Percent 50-Percent Grant / 100-Percent
Grant 50-Percent Loan Loan
Combination

ReConnect Program—CARES Act

In March 2020, the CARES Act provided the ReConnect Program with $100 million in funding for
grants to prevent, prepare for, and respond to the coronavirus. These funds were to be used to cover the
costs of construction, improvement, or acquisition of facilities and equipment needed to provide
broadband service in eligible rural areas. The CARES Act funds were provided to serve the same
purposes as regular program purposes, except that priority consideration was provided to previously
rejected grant applicants. The program provided funding to support broadband connections, distance
learning, telehealth, and telework. 12

Distribution of CARES Act ReConnect Program Funding

According to RUS press releases, sufficient broadband access would be made available to households,
farms, and over 400 businesses due to the CARES Act funds received. Also, the funded projects would
provide broadband access to educational, healthcare, and essential community facilities. There were
11 ReConnect Program applications that were designated by RUS for CARES Act funding. Between
June and September of 2020, RUS announced funding awards for 9 projects that totaled nearly
$85 million. 13 Two additional projects were funded in 2021 that totaled more than $12 million using
CARES Act funds. Additionally, RUS designated $3 million for oversight and underwriting activity
administrative expenses.

12
CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020).
13
The other two applications were rejected and received no CARES Act or regular program funds.

INSPECTION REPORT 09801-0001-23 3
North Carolina
Texas $4,488,894 $5,532,674
Administrative and Missouri $2,932,365
oversight activities
Utah
$3,000,000
$7,561,538

Mississippi $16,091,872

Tennessee $4,917,150
Oklahoma $29,791,961
Maryland $13,108,229

Georgia $12,575,317

Graphic 2: Distribution of $100 Million CARES Act ReConnect Program Funds Awarded to Service Providers for
Projects Within Each State. Graphic created by USDA OIG.

Recent USDA OIG Broadband Audit

We issued an audit report on July 28, 2023, on the USDA RUS ReConnect Program. 14 In the report, we
concluded that RUS’ mapping tool had a systemic programming error that caused the number of
households without sufficient access to broadband to be overstated for some applications. Specifically,
when an applicant adjusted or redrew their Proposed Funded Service Area (PFSA), the programming
error allowed multiple underserved areas to be drawn on top of each other and allowed the system to
count households without sufficient access to broadband more than once. As a result, we questioned
two approved applications, valued at more than $17.8 million, in which the number of households
without sufficient access to broadband in a PFSA was larger than the total number of households in the
PFSA. One of the questioned applications, in the amount of more than $16 million, was awarded
CARES Act funds.

We recommended that RUS: (1) implement a process to test mapping software to ensure that the
software programing error found does not exist in new systems; and (2) review and confirm the
percentage of households without access to broadband was within the eligibility parameters for
approved applications in ReConnect Program Round 1, Round 2, and the CARES Act to ensure that only
eligible projects received ReConnect Program funding.

14
Audit Report 09601-0001-23, Rural eConnectivity Pilot Program (ReConnect Program)—Award Process, July 2023.

INSPECTION REPORT 09801-0001-23 4
RUS officials agreed with our findings and recommendations, and we accepted management decision on
all two recommendations.

Scope and Methodology

This informational report provides general information and highlights CARES Act funding as of
June 30, 2023. This informational report does not contain any findings or recommendations, and it was
prepared using information obtained during the audit work and from public sources. We provided a draft
of this product to RUS management for their review and technical comments; no comments were
provided.

We conducted this inspection in accordance with the Council of the Inspectors General on Integrity and
Efficiency’s Quality Standards for Inspection and Evaluation. We believe the evidence obtained is
sufficient and appropriate to support the information in this report.

ReConnect program broadband installation (banner photo). USDA photo by Preston Keres. All photographs are from
USDA’s Flickr site and are in the public domain. They do not depict any particular audit or investigation.

INSPECTION REPORT 09801-0001-23 5
Abbreviations
CARES Act............................Coronavirus Aid, Relief, and Economic Security Act
COVID-19..............................coronavirus disease 2019
FCC ........................................Federal Communications Commission
PFSA ......................................Proposed Funded Service Area
RUS ........................................Rural Utilities Service
USDA.....................................United States Department of Agriculture

INSPECTION REPORT 09801-0001-23 6
Learn more about USDA OIG
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Persons with disabilities who require alternative means of communication for pro-
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