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07/07/2009RULES FOR BROADBAND STIMULUS FUNDING ANNOUNCED – FIRST APPLICATION WINDOW CLOSES AUGUST 14, 2009
Ladies and gentlemen, start your engines.
On July 2, the National Telecommunications & Information Administration (NTIA) and Rural Utilities Service (RUS) released their long-awaited Notice of Funds Availability (NOFA) for the broadband portion of the federal stimulus program. The NOFA establishes the rules of the road for the first application window; separate NOFAs, perhaps with different rules, will be issued for future filing windows.
The NOFA is available at: http://w2i.com/resource_center/white_papers/p/subCat_4 The application form is scheduled to be released on July 7 and will be available at: http://www.broadbandusa.gov While it is impossible to fully summarize the NOFA’s 120 pages here (and this is the only the first of a series of articles on the subject), there are some items in the document that potential applicants need to be aware of right now: - Applicants in the first window do not have much time to get their act together. It was widely believed that the first window would be 60 to 90 days long – now, apparently in response to the Obama administration’s desire to push stimulus money out as quickly as possible, the first window is less than six weeks long and closes August 14. Crunch time, in other words, is already here.
- Applicants thinking about postponing their applications to future filing windows may want to rethink that strategy. More than half of the $7.2 billion available under the broadband stimulus program has been frontloaded into the first filing window. Indeed, more than 90% of the $2.5 billion that will be distributed through RUS’s Broadband Initiatives Program (BIP) could be doled out to “first window” applicants. And, up to $1.6 billion of the $4.7 billion distributed through NTIA’s Broadband Technology Opportunities Program (BTOP) will be available to first window applicants.
- Applicants will not have much freedom to choose whether to seek funding through BIP or BTOP – the NOFA essentially makes the decision for them. Applicants who seek funding for last mile or middle mile broadband infrastructure projects must seek funding through BIP if at least 75% of their proposed service area is “rural,” as that term is defined in the NOFA (i.e., any area not located in (1) a city, town or incorporated area of more than 20,000 people, or (2) an urbanized area contiguous and adjacent to a city or town that has a population of greater than 50,000). Applicants in this category may simultaneously seek funding through BTOP as well; however, BTOP may grant the application only if RUS refuses to do so. All broadband infrastructure applications that do not meet the “75% rural” benchmark must be submitted through BTOP exclusively.
- Applicants who intend to apply through both BIP and BTOP must comply with the application requirements of both; note, however, that the BTOP requirements differ from the BIP requirements in several significant respects, and all BTOP applicants (even those that also go through BIP) must comply with them.
- Regardless of whether an applicant goes through BIP or BTOP, the success of any given broadband infrastructure application will depend in no small part on the extent to which the applicant proposes to serve “unserved” or “underserved” areas, as those terms are defined in the NOFA. Generally speaking, BIP’s scoring criteria are less subjective than those of BTOP – otherwise, the primary differences are in how points are distributed for certain scoring criteria.
- The NOFA defines an “unserved” area as one composed of one or more contiguous census blocks where at least 90% of households lack access to facilities-based, terrestrial broadband service. An area qualifies as “underserved” if (1) no more than 50% of the households in the proposed service area have access to facilities-based, terrestrial broadband service at greater than the minimum transmission speed that qualifies as “broadband” under the NOFA; (2) no fixed or mobile broadband service provider advertises broadband transmission speeds of at least three megabits per second downstream in the proposed service area; or (3) the rate of broadband subscribership for the proposed service area is 40% of households or less.
- Under the NOFA, the minimum transmission speed that qualifies as broadband is 768 kpbs downstream and 200 kpbs upstream. Note that this standard is based on advertised speed. This somewhat liberal definition of “broadband” suggests that NTIA/RUS view speed primarily as a criterion for comparing qualified applicants, not as a gating criterion designed to eliminate applications early in the process.
- All BIP and BTOP broadband infrastructure applicants must agree to comply with certain nondiscrimination and interconnection requirements set forth in the NOFA. It is essential applicants understand these requirements before designing and budgeting their proposed projects.
Again, this article only scratches the surface of what will be required of applicants seeking BIP or BTOP funding for broadband infrastructure or other kinds of broadband-related projects. Future articles by W2i will address the NOFA’s numerous complexities in greater detail.
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