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Lawmakers say FCC squandered U.S. stimulus funds in U.K.
Republican leaders of a House committee criticized the Federal Communications Commission on Tuesday for sending about $1 million in stimulus funds to a London company to collect data on broadband speeds of various U.S. Internet providers.
Rep. Fred Upton, Michigan Republican and chairman of the House Committee on Energy and Commerce, and three other top Republican lawmakers on the panel called the contract emblematic of broader problems with the stimulus program, according to a letter they sent to FCC Chairman Julius Genachowski and Lawrence Strickling, an assistant secretary at the Commerce Department.
"What was the rationale for sending Americans' hard earned money overseas for a project that didn't put any Americans to work, especially in the current fiscal climate?" the lawmakers wrote.
The Republicans' letter was sent six weeks after The Washington Times first reported that the stimulus-funded contract with SamKnows Ltd. created no jobs either in the U.S. or overseas after it was approved in the spring of 2010.
"That stimulus funding, meant to help here at home, was sent abroad to U.K. company SamKnows and — according to the Recovery.gov website -- created no jobs," the lawmakers wrote. They also described as "dubious" statements by government officials that the testing by SamKnows was necessary as a matter of broadband policy.
"Such speed information is already available from a number of sources without expenditure of additional taxpayer dollars," Mr. Upton wrote.
In addition, the lawmakers questioned whether the British company's test work helped spur broadband deployment and investment, saying broadband was available to 95 percent of the country by 2009, up from 15 percent in 2003, and that the private sector was responsible for service gains.
FCC officials were not immediately available for comment Tuesday evening after the committee released a copy of the lawmakers' letter, but an agency spokesman defended the contract in August when The Times first reported on the hiring.
"The Measuring Broadband America program has helped drive investment in broadband infrastructure as Internet service providers shown by the first report to lag their competitors responded by expanding their networks, improvements that were documented in the recently released second report," FCC spokesman Mark Wigfield wrote in an email to The Times.
Mr. Obama signed the $829 billion stimulus program into law in February 2009.
Emails to SamKnows were not returned when The Times attempted to contact the company in August. The company said in a statement when it started work with the FCC that a separate company, SamKnows Inc., would "appoint U.S. partners and create new jobs for American workers, both in the short term and in the long term."
Although FCC officials said the project was worthwhile and helped spur investment in broadband, contract activity reports filed through the Recovery Act website show that it didn't create any jobs. Under a section asking how many jobs had been created, officials noted "zero" after the project was completed.
In 2010, FCC officials said the SamKnows contract would allow the commission to help let consumers know whether they are getting the broadband speeds that providers advertise.
An analytics company, SamKnows, which reviewed broadband performance in England, used hardware and software in the homes of thousands of volunteers to measure broadband performance, with two rounds of testing in 2011 and 2012, according to the FCC.
A second round of testing found that "accurate delivery of advertised performance by ISPs has improved overall," with consumers seeing broadband services more closely aligned with what was advertised compared with a year earlier, an FCC report found.
The SamKnows contract comes under scrutiny as the issue of U.S. funds going overseas surfaces on the presidential campaign trail.
While Republicans have criticized Mr. Obama's stimulus program for projects linked to foreign companies, Democrats have attacked GOP presidential candidate Mitt Romney's years at Bain Capital, saying the firm invested in companies that sent U.S. jobs overseas.
During a press briefing over the summer, White House press secretary Jay Carney — asked about stimulus funds going overseas — said in some cases when money went to companies based overseas, they had operations in the U.S. and that the money still created "jobs for American workers here at home."
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