So you want broadband stimulus funds

Much is unknown about how the federal government will award some $7 billion in broadband grants and loans between now and September 2010. Because the feds were still inviting public comment on how to proceed, details were sparse when folks from the FCC, U.S. Department of Agriculture and the National Telecommunications and Information Administration fielded questions at their first public meeting in March. But officials did offer some insight and advice for those hoping to score stimulus funds.

For example, because at least one grant must be given to each state (plus D.C. and some U.S. territories), the money will be spread thinly. So officials urged applicants to team up to beef up their proposals.

“The act does say we want to get as much [broadband] to as many users as possible,” said Bernadette McGuire-Rivera, associate administrator for the NTIA. “I would really encourage people to get out and cooperate in applications, aggregate demand. I don't think we have a decision [on] whether just because simply you're a group of people, it's going to be better than someone that's not a group, but I would encourage people to get together and put applications together.”

Mark Seifert, a senior adviser to the Obama administration who is leading the NTIA's broadband stimulus efforts, suggested taking a holistic look at other parts of the stimulus act when writing grants. “One thing we're also trying to do is leverage the other broadband-based programs in the recovery act,” he said. “There is smart grid, there is Department of Transportation money going out, so the thought has been if you come forward with a proposal and you don't have to dig the trench twice, that shows efficiency and effectiveness. … We want you to think about how to utilize all aspects — the health, IT — there are a number of different programs within the recovery act.”

However, he also pointed out that the statute requires funding apply to projects that would not have proceeded if not for federal assistance.

“That's not a mushy rule,” Seifert said. “That's a hard-and-fast rule in the statute, and we're going to pay attention to that.”

However, the government is seeking comment on how to measure, demonstrate and consider “in-kind contributions” of funding from local and other governments and non-profit organizations that could be used to maximize the scope of a particular broadband project and thus increase its chances for receiving grant money.

At the public meeting, one audience member from Virginia's Mid-Atlantic Broadband Cooperative said, “We have 6 million of non-federal matching dollars ready to go today. I have tower contractors, fiber contractors. We're ready to award contracts. If we award those contracts prior to any federal grant award in NTIA or [Rural Utilities Service], will those still be considered matching funds?”

The NTIA's McGuire-Rivera replied, “That is a real good question, and if it were one of our existing grant programs, it wouldn't be, so we are going to go back and check on that for you. Don't give up hope.”

Applicants can apply to both the USDA and NTIA separately for different parts of the same project, but they can't get paid twice for the same thing, officials said.

One important distinction between how the USDA and the NTIA will distribute funds is that USDA grants require 75% of the area served by an approved project to be a “rural” area without sufficient broadband. The NTIA, meanwhile, will address both “unserved” and “underserved” areas, though the government hasn't yet defined those terms and is seeking public comment now on how to do that. The act also includes grant money to be distributed to the states for broadband mapping to help identify those unserved and underserved areas.

The definitions of such key terms are just a few of the crucial but so far unanswered questions regarding how the government will award stimulus funds. Still to be determined is how the government will quantify “innovation,” a characteristic officials said will be rewarded.

The act also includes preferences for projects that give users a choice of providers and those that are expandable in the future. The government also will weigh whether a project enhances service for health care, education and children, and whether the applicant is a “socially and economically disadvantaged small business.”

STIMULUS MATH

$7.2 billion = Federal stimulus money allocated to broadband projects

1 = Minimum number of grants, per state

~$2 billion = Additional USDA money allocated to broadband through RUS grants

75% = The portion of the service area that must be rural to get an RUS grant

$10 million = Money the NTIA will use to oversee and audit how funds are spent

9/10/2010 = Date by which all broadband stimulus funds must be awarded

STIMULUS LINGO

The NTIA grants will address both “unserved” and “underserved” areas, but the precise meaning of those terms must still be defined. The government also favors “innovation,” but hasn't yet decided how that will be measured.