Broadband Communities

MAR-APR 2018

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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BROADBAND FUNDING 6 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 | M A R C H / A P R I L 2 0 1 8 Rural Utilities Service Sees 12-Fold Increase In Broadband Funds Springtime was especially good to rural broadband hopefuls, with new money and potentially more flexible ways of disbursement. By Steven S. Ross / Broadband Communities T here's $600 million of new funding for deploying rural broadband in the FY 2018 omnibus spending package. e money, a surprise addition as the bill moved toward approval at the end of March, is by far the biggest boost to rural broadband since the 2009 stimulus program. It should help fund 60 to 100 new broadband networks in rural areas. Because it was a late addition, the U.S. Department of Agriculture has yet to adjust its regulations and its operations to handle it. Applications will be submitted through the USDA's Rural Utilities Service (RUS). Said a department spokeswoman, "e framework outlined by Congress in the FY 2018 omnibus act is very different from any other current USDA broadband program, creating new opportunities to enable various types of entities to bring broadband connectivity to rural communities." e details so far: • As with existing RUS projects, eligible deployments are those that serve rural areas with populations of 20,000 or less, that currently lack sufficient access to broadband service with speeds of at least 10 Mbps/1 Mpbs, and that are not served by an RUS borrower (to avoid overbuilding and duplicative service and to ensure the repayment of RUS loans). • Almost any kind of deployer entity is allowed, subject to state restrictions, except sole proprietors and personal partnerships. Eligible entities include rural telephone and broadband service providers, rural electric cooperatives, private firms, nonprofits and governments. • Required speeds were not stipulated and will be at the discretion of the secretary of agriculture. • Projects approved will receive a loan, a grant, or both. • e USDA must adhere to the notice, reporting and service area assessment requirements of the Farm Bill Broadband Program. • e total includes a whopping $18 million for planning. USDA is authorized to spend up to 3 percent of the funds for technical assistance and pre-development planning activities to support communities and applicants that need help in applying for deployment loans or grants. • Funds can be spent after the end of this fiscal year (September 30, 2018); they were appropriated to be used until expended. But the act requires the USDA to expedite program delivery. Broad B and Communities asked whether there could be any changes in existing rules with regard to RUS loan lien priority. RUS has generally demanded a first lien on project funds but has coordinated with other funders, most notably with lenders to electric coops. It has been unclear, however, who gets priority when RUS loans are combined with state or (rarely) other federal funds or when telecom projects are combined with other types of projects, such as smart grids. In the past, this has required expensive and time-consuming negotiation. But because this is a new program, "with new authorities and different requirements that are not currently found in other USDA broadband programs, USDA must work diligently and deliberately to set up new rules that both adhere to congressional requirements and have the most bang for the buck in serving rural America," the USDA spokesperson said. Normally, a proposed rule-making on a new USDA program would be issued in mid-May and a final rule-making would be issued 60 days later. However, USDA and RUS are short-staffed these days, and a new RUS administrator had not yet taken office as this magazine went to press. THE BROADBAND SURPRISE In its FY 2018 budget recommendations, the White House Office of Management and Budget proposed a $500 million appropriation for a new pilot grant/loan program for rural

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