Strickling and Adelstein Tout Role of Small Business, and Rural Ones, to Broadband Recovery

WASHINGTON, October 28, 2009 – Assistant Secretary of Commerce Lawrence Strickling said Wednesday that the National Telecommunications and Information Administration will work to apply the lessons from the first round as it moves on to the next phase of broadband stimulus applications.

“The NTIA and RUS are finalizing a new request for information that will help us shape the round two process,” Strickling said, testifying before the House Small Business Committee. He also said that at least 15 percent of the applications for stimulus funding came from small and disadvantaged businesses.

He added that the agency’s request for information will solicit the public’s views on how the first round worked for applicants and what changes and clarifications should be made for the second round.

Strickling touted the role that broadband plays for rural communities, and also for small businesses. “If you are a small business owner without access to high-speed internet, you are effectively operating with one hand tied behind your back,” Strickling said.

He said that application process involves giving additional points to applications from economically disadvantaged businesses, and those who have collaborated with them.

Jonathan Adelstein, administrator of the Rural Utilities Service at the Agriculture Department, said that 36 percent of the loans go to start-up businesses.

“The [federal government] is committed to ensuring that SDBs [small and disadvantaged businesses] are provided careful consideration,” Adelstein said.

Adelstein also outlined details about the process of vetting broadband stimulus applications. The initial part is the review phase, with successful applications going on to the diligence phase, where applicants are asked to give advanced information as necessary to substantiate representations made in their applications.

Adelstein also discussed the “waiver authority” for the strong proposals that seek exclusion of a particular requirement – for example, the requirement that applicants provide 20 percent of funding through a private- or public-sector match. Such waivers are processed in the second phase of the vetting process.

Adelstein added that the RUS has encountered challenges as they review applications for the third round, including issues such as the complexity of the definition of remote and rural areas.

For infrastructure projects, RUS will only fund applications in which the service is 75 percent or more un¬served or underserved rural areas.

Adelstein said that the huge discussions generated by the program has facilitated potential applicants’ ability to organize themselves into groups seeking funding.“This has made their proposals more attractive to funding, and it has generated interesting developments.”

With 34 per cent of the applications coming from businesses that require less than one million dollars, these applications may get faster consideration in the second round, he said.

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