Jindal Loses $80 Million Grant (Because He Couldn’t Find a Private Company to Give It To)

by Lamar White, Jr. on November 9, 2011



At some point, people may start to notice that Governor Jindal has, either due to ideology, incompetence, or both, deprived Louisianans of hundreds of millions of dollars of benefits to which it was owed or deserved. The most recent example is, most assuredly, a reflection of both ideological intransigence and complete incompetence.

Louisiana was set to receive an $80 million federal grant to expand broadband access in North and Central Louisiana. I know, for an absolute fact that, behind the scenes, Mary Landrieu’s staff worked diligently to ensure Louisiana had an opportunity, and I’m not at all surprised that Senator Landrieu has been so vocal about this issue. You see, last week, the Commerce Department rescinded the grant because Louisiana couldn’t get its act together. More specifically, Governor Jindal and his administration couldn’t get their acts together.

Here’s the way I see it: Senator Landrieu and her staff have been fighting tooth and nail to get money for broadband roll-out in rural Louisiana. No doubt, she hears complaints about a lack of service every time she visits rural Louisiana, and North and Central Louisiana are particularly underserved. I’ve complained about my home region’s abysmal broadband infrastructure here on this blog several times over the last few years. It’s called the Digital Divide, and it’s real. North and Central Louisiana’s lack of broadband access greatly diminishes its competitiveness. From The Times-Picayune:

The grant, announced in March 2010, would have provided for 900 miles of fiber optic cable that would stretch broadband to 100,000 households, 15,000 businesses and 150 institutions such as schools, universities and medical centers. Commerce Secretary Gary Locke has said a third of Louisiana residents don’t have access to the Internet — and many others are still using dial-up connections.

A few decades ago, we built the Interstate Highway System. I know no one is using the term “Information Superhighway” anymore, but it’s still instructive: The Internet is both the present and the future of global commerce.

What would have happened if, in the 1950s, Eisenhower had still realized that the automobile represented the future of American commerce, but, instead of creating the Interstate Highway program, he decided that the federal government would build only the highways that would be profitable enough for a private company to quickly pay for their construction via tolls? More than likely, we’d never have had an Interstate “system;” we’d have even larger swaths of a forgotten America. I am not a fan of the type of developments that were encouraged and bolstered by the Interstate highway– ubiquitous suburbanization and, with it, a disconnection from community– but I am a fan of the Interstate (except for I-35).

The Internet is not ether. It is, to quote the late Ted Stevens, “a series of tubes.” Well, maybe not literally, but the point is: There is a direct relationship between the quality, reliability, and capability of broadband and your community’s investment in broadband infrastructure. You want high speed internet? You’re going to have to turn over some dirt. Wires and boxes need to go in the ground, and on a large-scale, particularly in a rural and geographically expansive area, that may be expensive.

So, while Landrieu and her staff are working to secure this money for Louisiana, Bobby Jindal and his administration are hatching up plans to divert that money to someone, anyone, in the private-sector who would sign a lease. Jindal’s plan was simple: He’d take the $80 million to build the infrastructure and then, once built, immediately lease it out to a third-party private-sector service provider. The State could be reimbursed, and the private company could make money. Simple. Quoting from Education Talk New Orleans (bold mine):

The original grant approval was based upon Louisiana’s agreement to bring high-speed Broadband to universities, K-12 schools, hospitals, libraries and other hubs in unserved and underserved areas of Louisiana.  The National Oceanographic and Atmospheric Agency awarded a grant for a project that proposed to construct 900 miles of new fiber-optic  infrastructure.  The new network would have connected with the Louisiana Optical Network Initiative, a more than 1,600 mile network connecting Louisiana and Mississippi to a national network.

A year after the state began the project NOAA, with $5.3 million of the initial $15 million in state funds and $431,747 in federal funds already spent, the State took control and changed the entire plan to rent rights-of-use from commercial providers.  Problem is that there are no commercial providers to provide the services required, no 900 miles of fiber-optic and few commercial providers willing to invest $90 million to do so.

So, originally, we had an awesome plan to expand LONI. We had money in the bank. And then, the State (the Jindal Administration) decided they could just outsource the whole thing to commercial providers. Unfortunately, when they couldn’t provide for any data backing up their assumptions and projections (a nice way for the federal government of saying to Jindal that his administration’s work was incompetent and completely insufficient), Jindal and company lost an $80 million broadband infrastructure grant. Public Service Commissioner Foster Campbell is also critical:

“I meet with people in every parish (in his district), and the number one priority by far is high-speed Internet, and how do you lose $80 million coming from the federal government to do that?” he asked. “How do you drop the ball, and if they did drop the ball was it because someone whispered in their ears, `it’s going interfere with big companies?’ I want to know about that.”

In my opinion, it’s because they failed to realize the reason the grant was necessary in the first place; Jindal and his administration simply do not appreciate the ways in which both rural and disadvantaged Louisianans are disproportionately affected by the Digital Divide; they don’t understand that, in order to shrink the divide, we must invest in expanding broadband infrastructure, particularly in rural and inner-city urban areas; and, most assuredly, they do not believe in government. I will never understand why anyone would ever vote for someone who proudly believes that government does not and can never work as a service provider. But I digress.

Commissioner Campbell smells the rat when he asks about whether or not this would “interfere with big companies.” Of course, it does. An $80 million grant to improve infrastructure in an area in which there is only one or, at the most, three entrenched service providers? That could only open up competition and that could only lower profits for the big companies who have been squatting on the North and Central Louisiana markets as “caretakers.”
Jeffrey sums it up nicely:

(This), in a nutshell, is what Louisiana voters (well the 36% of them who turned out anyway) just signed up for another 4 years of. No service or infrastructure project… even one backed by millions of dollars in free federal grant money… is going to get done unless it can be sold off as a private money mine.

Same story with your prisons, same with your health services, same with your schools. If it can’t be run as a privatized scam for someone’s commercial benefit, your Governor’s position is it’s just not something you really need.