Broadband stimulus hopefuls get application advice: Hurry

Of all the myriad requirements and guidelines governing the dissemination of the federal government’s $7.2-billion broadband stimulus package, perhaps the most important – applicants would do well to keep in mind – is that the administration wants to get the money out as quickly as possible to experienced recipients. That was part of the advice Thomas Cohen, partner in the law firm of Kelley Drye & Warren, imparted to listeners on a Telephony Webcast devoted to deciphering the broadband stimulus process (an archive of which will be available here).

All funds must be awarded by September 30, 2010, including at least one award in each state, and the total amount received may actually exceed $7.2 billion, depending on how much is used to secure loans rather than grants. Funds are likely to be awarded in three tranches, Cohen said: in the fall, winter and next spring. Applications for the first tranche will probably begin pouring in early this summer, since it will take some time to rank them and pick recipients.

“If you’re not working on an application already -- even if you don’t know what it looks like – you’re almost too late for the first [tranche] in the summer because I know of others who are [working on their applications],” Cohen said.

That timeliness imperative could influence several aspects of how funds are awarded, Cohen said. Though federal agencies in charge of distributing funds have some choice about how much of it to award as grants and how much as loans or loan guarantees, Cohen believes they will have a strong preference for grants because they can start stimulating the economy sooner. For example, if the application ranking process takes 90 days, applications submitted by July 1 wouldn’t be awarded until the end of September, Cohen said, and the actual money would probably go out in the fourth quarter. “That’s later than this administration wants already,” he said. However, the loan award process, as historically administered by the Rural Utilities Service (RUS), would take longer – it would require more due diligence, and bids actually follow the awards in that process. Therefore loans to those summer applicants wouldn’t actually be received until the first quarter of next year, he said. “I don’t think the administration wants to see that happen.”

One of the vexing requirements of the stimulus process is the seeming contradiction between the feds’ demand for so-called “shovel-ready” projects (projects that have been planned out well enough to begin immediately) and the stipulation that grants not be used for projects that would have proceeded without the grant. Cohen said he’s seen several different application types that fit that description. For example, plans that were indefinitely postponed due to the slow economy could qualify, he said. “Or [plans that applicants] were thinking of building and then looked at the numbers and [realized] they wouldn’t work. Or [where] they have a five-year plan and this is what was going to happen in year four or five.”