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02/23/2009UPDATE ON BROADBAND STIMULUS LEGISLATION (as of 2/23/09)
President Obama has signed the American Recovery and Investment Act of 2009 into law, triggering over $7 billion of funding for deployment of broadband and broadband-related services throughout the United States. Most of the funding will be distributed through the National Telecommunications and Information Administration (NTIA); the remainder ($2.5 billion) will be distributed through the Department of Agriculture’s Rural Utilities Service (RUS). Please click here to download our updated legislative racker summarizing the broadband funding provisions of the ARRA.
Tomorrow, February 24, NTIA will release a public notice announcing that it will hold meetings with potential applicants in Washington, D.C., starting March 2. It appears that the meetings will have a “town hall” format and questions will be permitted. Anyone interested in scheduling a meeting should contact Barbara Brown at (202) 482-4374 or bbrown@ntia.doc.gov. It is expected that NTIA and RUS will issue additional public notices announcing the application procedures and deadlines for those seeking funding.
Pending upcoming clarification from NTIA and RUS, potential applicants should be aware of the following: NTIA
NTIA must distribute at least $4.35 billion in grants through a new Broadband Technology Opportunities Program (“BTOP”). The BTOP funding process must commence “as quickly as possible consistent with prudent management,” and all awards must be made by September 30, 2010.
Preliminary, it appears that the new BTOP will be at least somewhat similar to NTIA’s most recent Technology Opportunities Program that ended in 2004. There, however, eligibility was limited to governmental entities and non-profit interests. Under the new BTOP, eligibility is also extended to “any other entity, including a broadband service or infrastructure provider, that the Assistant Secretary finds by rule to be in the public interest.”
The new BTOP will issue grants through a competitive process. Projects eligible for BTOP grants include the following: · Acquisition of broadband equipment, instrumentation, networking capability, hardware and software, digital network technology, and infrastructure; · Deployment of broadband services and related infrastructure”; · Ensuring access to broadband service by “community anchor institutions”; · Facilitating access to broadband by low-income, unemployed, aged and “otherwise vulnerable: populations in order to provide educational and employment opportunities”; · Deployment of broadband facilities that improve public safety broadband communications services; and · Such other matters as are consistent with the purposes behind the BTOP. Absent a need-based waiver, applicants must provide 20% of their project funding themselves and must demonstrate that their proposed project would not have been implemented during the grant period without NTIA funding. They must also provide assurance that they will substantially complete their proposed projects in accordance with project timelines, with all work completed no more than two years following the award. Preferences will be available to applicants whose projects can be started and finished quickly, with at least 50% of their grant money spend on activities initiated within 120 days of the date on which the ARRA was signed into law (February 17).
Applicants are not required to satisfy any minimum requirements as to the speed of their proposed networks. Network speed will, however, be a criterion for comparing competing proposals.
Grants will be available for rural, suburban and urban areas, although applications for areas deemed “unserved” or “underserved” by broadband may be afforded some priority in the application process. NTIA has the option of consulting with the States when attempting to determine whether an applicant is proposing service to a truly unserved or underserved area. NTIA also must give due consideration to whether an applicant is a socially and economically disadvantaged small business concern under the Small Business Act.
Selection of the winning applicants (and, apparently, the amount of money awarded to each of them) is left to NTIA’s discretion. NTIA must, however, make at least one award in each State, if practicable. As to infrastructure grants, NTIA must consider whether an award will increase the affordability of, and subscribership to, broadband to the greatest population of users in the area, or enhance service for the greatest population of users in the area.
Finally, it must be emphasized that the ARRA requires NTIA to condition its awards on the winning applicant’s compliance with certain undefined non-discrimination and network interconnection obligations. At a minimum, winning applicants will be required to comply with the FCC’s 2005 Internet access policy statement, which generally requires that Internet users be permitted to access whatever lawful content and use any lawful applications and Internet-based services of their choice, so long as they do no harm to the underlying network. How NTIA expands on this concept is the proverbial “elephant in the room” for those seeking funding for construction and/or operation of new broadband networks. RUSThe $2.5 billion available through RUS will consist of grants, loans and loan guarantees for broadband projects anywhere in the United States, provided that at least 75% of the area proposed to be served is a rural area without sufficient access to high speed broadband service to facilitate rural economic development. To preclude double-dipping, no area of a project funded by RUS may receive funding from NTIA’s new BTOP for the purpose of providing broadband service. Funding through RUS will be available until September 30, 2010.
Some of the criteria for successful applications filed through RUS are similar to those for the new BTOP (e.g., speed of implementation). Under the RUS model, however, priority will be given to projects that serve the highest proportion of consumers in unserved rural areas, or that give consumers a choice of more than one broadband service providers. An applicant also must demonstrate that, if its application is approved, all elements of its proposed project will be fully funded.
Going forward, RUS must evaluate whether it should simply continue to use its current process for funding broadband projects in rural area, with whatever modifications are required under the ARRA (e.g., the “75%” requirement discussed above). If RUS decides to go in that direction, it may choose to expedite things by immediately issuing a Notice of Funds Availability and establishing an application deadline for applicants seeking ARRA funding (the other alternative is to issue a notice of proposed rulemaking that would need to be resolved before issuance of a NoFA – that approach, obviously, would put greater pressure on RUS to distribute the $2.5 billion within the timeframe mandated by the ARRA). * * * W2i will provide further updates on these items once NTIA and RUS issue their respective public notices establishing their processes for receiving applications for and distributing the funding available under the ARRA.
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