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Rural Utilities Service

USDA’s Rural Utilities Service Says it Finances the Most Utility Construction Programs in a Decade

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Photo of Chadd Rupe from Agri-Pulse

December 23, 2020 — The last five years have boasted massive strides towards closing the urban-rural broadband and utilities divide, according to individuals speaking at Fiber Connect in December.

In the last fiscal year alone, the U.S. Department of Agriculture’s Rural Utilities Service delivered almost $10 billion worth of capital financing in rural America for broadband deployments, rural electricity and electrical efficiency projects, water projects, wastewater projects, and more, said Chad Rupe, Administrator for Rural Utilities Service, during a keynote speech which aired as part of the Fiber Connect 2020 virtual conference.

According to Rupe, in the last 18 months, RUS averaged $900 million each month in investments, loans and grants to utilities in rural America.

RUS has been around since the 1930s, when rural communities, farmers, and ranchers came together to solve the rural electricity industrialization gap that was a major problem of the day. Today the agency provides a broad array of things to rural communities with 20,000 or less inhabitants. The agency has adapted overtime to provide funding for additional utilities, such as, rural broadband and rural drinking water.

Rupe discussed the current state of rural broadband and the strong role RUS plays in making rural utility investments, saying “RUS is equivalent to some of the largest banks in United States,” and is currently financing the most production its water, broadband, and electric programs have collectively seen in a decade.

According to Rupe, the USDA’s RUS offers one of the cheapest, most reliable sources of capital. Further, the interest on loans taken out with the agency are locked at treasury rates, which are currently at historic lows.

President and CEO of the Fiber Broadband Association Gary Bolton, who moderated the conversation, commended the agency on its ReConnect Loan and Grant Program, which is currently driving broadband investment across rural America, providing loans and grants to over 1,100 service providers.

Chad Rupe during the Fiber Connect session

“The ReConnect Program is having a positive impact on rural communities,” said Rupe, “through the program RUS has invested in 83 infrastructure projects in 42 states, to date.“ Due to the success the agency has had, Congress has really supported the initiative. “We received a lot of support from Congress through COVID relief legislation,” said Rupe.

“The ReConnect Program offers three major funding options,” he said, detailing that the agency offers grants large enough to finance entire construction projects, loans that cover the entirety of projects, as well as, 50/50 combinations of grants and loans to finance projects.

“The loan is a very good, low-cast rate of financing to utilize for build outs, especially for Rural Digital Opportunity Fund and Connect America Fund winners,” said Rupe.

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Expert Opinion

Christopher Ali: How the U.S. Department of Agriculture is Quietly Reshaping Broadband Policy

In the 2022 Consolidated Appropriations Act, Congress reversed USDA’s ReConnect criteria in three crucial ways.

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The author of this Expert Opinion is Christopher Ali, Associate Professor at UVa’s Department of Media Studies.

For almost a century, the United States Department of Agriculture has played a pivotal, albeit underappreciated, role in connecting this country with the trappings of modernity. It’s commitment to universal service began in 1936 with the passage of the Rural Electrification Act, which created the Rural Electrification Administration , a new deal agency charged with connecting rural communities and farms with electricity.

The REA was tremendously successful, growing rural electrification from 33% in 1940 to 96% in 1956. The REA was eventually incorporated into USDA, and in 1949 was given the added responsibility of rural telephony . Through its tried-tested-and-true model that involved the creation of local cooperatives and the championing of localities, REA connected rural communities at a staggering rate.

Don’t miss Christopher Ali’s “Ask Me Anything!” interview on Broadband.Money with T.J. York, which will take place on Friday, April 8, at 2:30 p.m. ET.

The successor of REA, the Rural Utilities Service, a division of USDA, continues the trend of rural connectivity through its broadband and telecommunications programs. Technology aside, the difference between then and now is that in contrast to its early starring role in rural electricity and telephony, it has taken a backseat when it comes to rural broadband policy and planning.

Most broadband planning and policymaking is done, for better or worse, at the Federal Communications Commission (and, with the passage of the Infrastructure Act, the Commerce Department’s National Telecommunications and Information Administration as well. But all of that seems to have changed with its October 2021 Notice of Funding Availability.

USDA’s significant changes to ReConnect

USDA has championed rural broadband deployment since the mid 1990s and continues to make crucial loans and grants through four different telecommunications programs totaling around $1.4 billion in investment. It’s most recent, and arguably most successful broadband program is ReConnect which began in 2018 with a $600 million congressional appropriation. Through the Infrastructure Act, ReConnect received another $2 billion. Thus far ReConnect has distributed $1.5 billion in loans and grants for rural broadband expansion.

It is ReConnect’s third, and most recent funding notice, where USDA flexed its broadband policymaking muscles. Here, USDA made three crucial policy adjustments to current standards presently set by the FCC.

First, it defined an eligible area as any place lacking connectivity at 100 Mbps download/20 Mbps upload. This is a massive improvement from the FCC’s speed definition of broadband at 25/3 and thus dramatically increases the number of eligible communities.

Second, it requires networks that receive funding be able to meet or exceed speeds of 100 Mbps download/100 Mbps upload on day one. This, by definition, excludes previously ubiquitous technologies like DSL and geosynchronous satellite which have both proven incapable of delivering the speeds required by contemporary users.

Third, it prioritizes local governments, non-profits, cooperatives, and public-private partnerships. This differs from the FCC, which has traditionally privileged the largest incumbent providers, and differs from the Infrastructure Act which simply states that these entities cannot be discriminated against.

Single handedly USDA tried to reshape broadband policy, expanding eligibility, forcing grant and loan winners to upgrade their networks, and championing a local-first solution to the rural-urban digital divide.

New changes wrought by the Consolidated Appropriations Act of 2022

Unfortunately, this attempt may not last long. In the 2022 Consolidated Appropriations Act, passed on March 15, 2022, Congress reversed USDA’s ReConnect criteria in three crucial ways. First, it re-instated the 25 Megabit per second (Mbps) download x 3 Mbps upload threshold, rather than the 100 Mbps x 20 Mbps threshold previously proposed.

Second, it downgraded the 100 x 100 day-one requirement to 100 x 20. Even this is subject to a “to the extent possible” clause. Third, and as first reported by Kevin Taglang of the Benton institute for Broadband & Society, the Congressional explanatory statement that accompanied the Act chastised USDA for failing to act in a technologically neutral manner:

  • The agreement is concerned that the most recent funding announcement dictates build out speeds that are not technology neutral and could inflate deployment and consumer access costs. Therefore, the Act sets the build out speeds to ensure that all broadband technologies have equal access to the program. In addition, the agreement encourages the Secretary to eliminate or revise the awarding of extra points under the ReConnect program to applicants from States without restrictions on broadband delivery by utilities service providers in order to ensure this criterion is not a determining factor for funding awards.

The Consolidated Appropriations Act, therefore is a mixed bag for USDA. While it provided an additional $436 million for the ReConnect program, Congress lowered the speed threshold, thereby reducing eligible communities and therefore permitted, once again, the deployment of technologies that cannot measure up to contemporary user needs and demands. Additionally, the last sentence in the excerpt above undercuts the localism impulse of USDA’s previous ReConnect announcement.

Words matter. Definitions matter. Technologies matter. As I recall in my new book on rural broadband Farm Fresh Broadband: The Politics of Rural Connectivity, technological neutrality is crucial to federal policymaking, but that does not mean that policy should be what the NRECA calls, “technologically blind.”

For what it’s worth, USDA’s ReConnect NOFA was indeed technologically neutral – it did not advocate for one technology over another, but rather set the speed thresholds at such a level that outdated technologies are ineligible. USDA should be applauded for its attempt to move the broadband needle forward to help local, rural communities. As we await the rulemaking proceedings of the NTIA for the $42.5 billion BEAD program, policymakers can learn valuable lessons from this federal department charged with championing rural communities.

Christopher Ali is Associate Professor at UVa’s Department of Media Studies and a Knight News Innovation Fellow with the Tow Center for Digital Journalism at Columbia University. He is the chair of the Communication Law and Policy Division of the International Communications Association and the author of two books on localism in media, “Media Localism: The Policies of Place” (University of Illinois Press, 2017) and “Local News in a Digital World.” This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Broadband Mapping

In Discussing ‘Broadband and the Biden Administration,’ Trump and Obama Transition Workers Praise Auctions

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Screenshot from the November 2 Broadband Breakfast Live Online webcast

November 22, 2020 – In the event that the incoming administration of President-elect Joe Biden seeks substantial funding for broadband infrastructure, there is a strong likelihood that such monies would be channeled through a reverse-auction mechanism, said panelists at the Broadband Breakfast Live Online event on November 11.

See more from Broadband Breakfast Live Online, including “Broadband and the Biden Administration, Part II,” on December 2, 2020.

In a discussion with Broadband Breakfast Editor and Publisher Drew Clark, two broadband policy experts who served on the transition teams for Donald Trump and Barack Obama, respectively, championed the role of such a mechanism as efficient and fair.

Previous attempts to run funding through other selection processes provided funds only to the well connected, claimed to Mark Jamison, research and education director at the University of Florida, and who served on then President-elect Trump’s 2016 transition team.

Places with a Democratic governor or a congressman of either party that sat on a powerful committee were funded more often compared to other regions, Jamison said.

Whether or not funding mechanisms were in fact biased in that way, both Jamison and Technology Policy Institute President Scott Wallsten both praised the transparency and economic efficiency of the Federal Communications Commission’s reverse-auction funding mechanism.

Wallsten, an economist who was involved in the transition for then President-elect Obama, and who also served on the National Broadband Plan implemented in the first year of the Obama administration, criticized the Rural Utility Service and the old funding process of Universal Service Fund. Both said under these mechanism, a lot of money is spent without good information about how such funds are awarded or distributed.

Wallsten and Jamison agreed that more data would help make broadband funding more effective, they also said that the FCC was right to move forward with its Rural Digital Opportunity Fund auction on October 29 – part of the new auction-based approach to the Universal Service Fund – despite imperfect mapping.

In part, this was because any inadequacy of mapping data can be resolved in the challenge process, said Wallsten. Additionally, it is not clear that auctions like RDOF, or the Connect American Fund auction in 2018, would have yielded better results had the FCC waited to update their maps.

Jamison and Wallston also projected how the Biden administration might tackle net neutrality, Section 230 and antitrust regulation.

Jamison said that if the Biden administration reinstitutes net neutrality, it will quickly see that that won’t work very well.

Wallsten said that if it’s reinstituted the debate will be different than in the past. A large part of net neutrality is paid prioritization where third parties can pay ISP’s to put their content “at the front of the line.” He said that the pandemic has demonstrated why no paid prioritization may be a mistake, as many people need guarantees of stable connection for their schooling and telehealth applications.

Wallsten also noted that many made doom and gloom forecasts when the Trump administration FCC removed net neutrality protections in December 2017. None of those predictions came to pass, he said.

Both also agreed that the FCC should not be involved the regulation of Section 230 of the Communications Decency Act, which protects tech platforms from liability for user-generated comments.

They also were wary of changes to the consumer welfare standard governing antitrust because, said Jamison, “If you’re not regulating for consumers, who are we regulating for?”

See “Broadband Breakfast Live Online on Wednesday, November 11: Broadband and the Biden Administration,” Broadband Breakfast

“Broadband and the Biden Administration” is sponsored by:

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

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Autonomous Vehicles

Broadband Roundup: Tesla Cars Ain’t Driverless, Suspicious Bernie Sanders Facebook Posts, ReConnect Awards

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Photo of NTSB Chairman Robert Sumwalt by the National Transportation Safety Board

According to a Forbes article by Alan Ohnsman, U.S. safety investigators are calling for greater regulation of Teslas following the release of several investigative reports detailing several Tesla crashes due to the cars faulty autopilot mode.

In March 2018 in Mountain View, California, Walter Huang was playing a game on his phone as his Tesla Model X barreled down the highway. His car’s autopilot mode failed to detect a traffic barrier and crashed head-on into the concrete, killing Huang and trapping two other cars in a vortex of metal.

Investigators of the National Transportation Safety Board, an independent government body, have found fault with the company’s ’partially automated” label  in light of the accidents. They have also proposed pro-active steps Tesla and the Transportation Department should take to save lives from faulty technology.

NTSB Chairman Robert Sumwalt said at the conclusion of a hearing on Tuesday in Washington: “We urge Tesla to work on improving its Autopilot technology and for NHTSA to fulfill its oversight responsibility to ensure that corrective action is taken when necessary. It’s time to stop enabling drivers in any partially automated vehicle to pretend that they have driverless cars. Because they don’t have driverless cars.”

Facebook investigating suspicious posts linked to Bernie Sanders supporters

Facebook is investigating accounts linked to suspicious posts that support Bernie Sanders, according to an article on The Wall Street Journal by Emily Glazer and Dustin Voz.

This news comes after U.S. Intelligence has confirmed that Russian operatives are using information to try to get Bernie Sanders nominated by the Democratic primary.

Facebook has yet to substantiate these claims.

“We investigate each credible claim we receive, just as we did in this instance when an outside researcher contacted us,” Facebook spokesman Andy Stone told the Journal. “To date, we have not been able to substantiate the researcher’s claims and we have not been notified by the intelligence community.”

USDA’s ReConnect grant program makes more awards

The Agriculture Department this week announced the awarding of $9.1 million, $3.3 million, and $2.2 million for broadband in rural communities in South Carolina, Montana, and Nevada, respectively.

The funds were dispersed via USDA’s ReConnect program attempting to shrink the digital divide between rural and non-rural communities.

“High-speed broadband e-Connectivity is critical to increasing access to health care and educational opportunities and strengthening economic development efforts in rural communities,” South Carolina Rural Development State Director Debbie Turbeville said.

“Under the leadership of President Trump and Agriculture Secretary Perdue, USDA is committed to being a strong partner to rural communities in deploying this critical infrastructure, because we know that when rural America thrives, all of America thrives.”

The Reconnect program was passed in 2018. It allocated $600 million to USDA to expand broadband infrastructure and services in rural America. Since last summer, the department has received applications requesting a total of $1.4 billion in funding.

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