Broadband Communities

JAN-FEB 2019

BROADBAND COMMUNITIES is the leading source of information on digital and broadband technologies for buildings and communities. Our editorial aims to accelerate the deployment of Fiber-To-The-Home and Fiber-To-The-Premises.

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BANDWIDTH HAWK 2 2 | B R O A D B A N D C O M M U N I T I E S | w w w. b r o a d b a n d c o m m u n i t i e s . c o m | J A N U A R Y / F E B R U A R Y 2 0 1 9 L ong-suffering rural broadband advocates can now expect at least $500 million a year in loans and grants for the next five years, targeted to the hardest-to-serve rural areas through new programs administered by the Rural Utilities Service (RUS) and the Federal Communications Commission (FCC). But the money comes with some tough-to-meet conditions, discussed in "New Funding for Rural Broadband" (p. 34). e FCC is offering 10-year subsidies totaling up to $200 million a year from the Connect America Fund (CAF) to almost any organization willing to serve slivers of neglected territory, using a reverse auction process. e first winners were announced this summer in the CAF II auction. Only about half the money was allocated, much of it to satellite providers. us, I expect another auction round next year. RECONNECT FUNDING e RUS plans to start releasing grants and loans in spring 2019 from $600 million included in the March 2018 omnibus appropriations bill. (e farm bill will add another $350 annually for five years.) e program, confusingly called ReConnect (short for Rural eConnectivity), is aimed at areas that have little or no broadband connectivity. A service area in which more than 10 percent of premises have access to fixed terrestrial broadband of at least 10 Mbps downstream/1 Mbps upstream does not qualify for the program at all, according to the rules set by Congress. To be eligible for a pure grant under the program, an area must be totally unconnected. An area that has only direct-to-subscriber satellite or cellular service is not considered served, even if speeds exceed 10 Mbps/1 Mbps. Similarly, direct-to-subscriber satellite and cellular services do not qualify for ReConnect funding. However, one unusual type of satellite service – a terrestrial network that uses a satellite base station – does qualify for funding as long as it can serve all users simultaneously with 25 Mbps/3 Mbps bandwidth, offers "reasonable service plans" and does not have usage caps. ReConnect funding for service areas of current CAF II recipients can be requested only by the entity that is receiving the CAF II support and is limited to loans. It is unclear whether such double-dipping will be allowed for future CAF recipients, as FCC Commissioner Michael O'Rielly is opposed and as CAF can subsidize operating expenses and ReConnect cannot. Areas for which providers previously received state funds to deploy broadband with at least 10Mbps/1 Mbps service are ineligible for ReConnect funding, although it appears that state grants may be used for the 25 percent equity match required for ReConnect grant funds. Although the FCC allowed well-funded new entities to bid for CAF II funding, the RUS requires two years of financial history to prove Rural Broadband: Dividing the Spoils Do you hope to serve a rural area that already has some broadband service? Work around it. Literally. By Steven S. Ross / Broadband Communities

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