A key U.S. lawmaker on Thursday expressed concern that much of the eastern part of the United States could be disqualified from broadband grants because of the way remote communities are considered.

Rick Boucher, chairman of the House Energy and Commerce Subcommittee on Communications, Technology and the Internet, said at a hearing that some rules governing the $7.2 billion program of loans and grants are too restrictive and urged administrators to be flexible.

Boucher, a Virginia Democrat, was specifically concerned about how a community might be considered remote. For example, some grants are not available to remote communities that are within 50 miles of a city of at least 20,000.

Almost the entire Eastern U.S. is disqualified from 80 to 100 percent grants by this inappropriate standard, which in mountainous terrain is not a reasonable yardstick for determining need, Boucher said.

In July the departments of Agriculture and Commerce announced it would release $4 billion of loans and grants as part of a $7.2 billion program aimed at expanding broadband access to unserved and underserved areas.

In the first round, the departments received more than 2,200 applications requesting nearly $28 billion in loans and grants for broadband projects in all 50 states, five territories and the District of Columbia.

The fact that applicants requested nearly seven times the total amount of funding available in this one round ... underscores the extent of interest, Assistant Commerce Secretary Larry Strickland said.

Applications came from state, tribal and local governments; nonprofits; industry; and community institutions such as libraries, universities and colleges and hospitals, among others.

Strickland said he has heard complaints concerning how the applications process would affect the eastern portion of the country and will review them.

Strickland and Jonathan Adelstein, administrator of the Rural Utilities Service at the USDA, said the number of application rounds may be reduced to two from three based on the first round of applications.

That way the funds could be distributed faster and save administrative costs, they said.

Winners from the first round of applications are expected to be announced in November.

The departments are also overseeing a broadband mapping program. Officials said data from that project is slated to be available by February 2010 and a complete map is expected by February 17, 2011.

Winners from those mapping applications are expected to be announced by the end of September.

(Reporting by John Poirier, editing by Gerald E. McCormick)