Broadband Stimulus Rules Released; Key Terms Defined For Funding

WASHINGTON, July 1, 2009 – Senior Administration Officials from the Department of Agriculture’s Rural Utilities Service and the National Telecommunications and Information Administration detailed the newly released Notice of Funds Available (NOFA) under the American Recovery and Reinvestment Act, now available at broadbandusa.gov.

The joint NOFA, the first of two to be released today, contains the applicant guidelines and policy justifications, gleaned from more than 1,000 comments and roundtable meetings, in Washington, Arizona and Nevada.

In the first of three rounds, $4 billion will be available, but not all of the funds will be in grants. NTIA, which only has grant making authority, will release $1.6 billion dollars in grants, but the majority of RUS funds will be in loan/grant combinations.

RUS will release $2.4 billion dollars in the first round. Of the RUS funds, $400 million will be for grants for remote areas, $800 million will be in loan/grant combinations for non-remote areas, $800 million will be loan/grant combinations for middle mile facilities, and $320 million will be held in reserve.

The numbers stated by the Department of Agriculture is the effective amount of funds available. A senior official estimated that the 1.6 billion in loan/grant combos would cost $400 million in stimulus funds, which includes the grant portion, and the “cost of money” to loan the money.

The NOFA also contains the much-anticipated definitions of broadband, unserved and underserved areas.

Broadband is defined as a two-way service that advertises speeds of 768 kilobits (kbps) down and 200 kbps up. A senior official from NTIA stated that this speed would allow funding to the areas needing it most, although higher speeds are desired.

Unserved and underserved are defined in terms of facilities-based, terrestrial broadband, both fixed and mobile. This definition ignores satellite service, since satellite effectively covers the entire country. Satellite service providers are eligible for funding under the NOFA.

An unserved area is one or more Census Blocks where 90 percent of households do not have access to facilities-based broadband.

An underserved area, for “last mile” funding purposes can be designated by meeting one of three criteria: (1)  No more than 50 percent of households have access to facilities-based terrestrial broadband; (2) no fixed or mobile provider advertises speeds of at least 3 megabits per second (Mbps); and (3) the rate of subscribership is 40 percent or less.

An area can be designed as underserved for “middle mile” projects if one interconnection point terminates in a “last mile” underserved area.

A second NOFA is scheduled to be released today, one that allocates $250 million for state level maps. These funds are available to the governor of the state, or the governor’s designee.

There will be strict criteria for these maps, which will be detailed in the forthcoming NOFA. The data from these maps will be used to create the national broadband map, part of the Broadband Data Improvement Act, also funded through the Recovery Act.

The states will be called upon to rank the projects in their states once NTIA and the Department of Agriculture determine the finalists.

The NOFA also sets the Federal Communiations Commission’s Internet Policy Statement as a floor for its non-discrimination principles.

Applications for the first round will be accepted from July 14 to August 14.