RUS wants input to improve stimulus application process

The Rural Utility Service is "painfully aware" of problems in the application process for federal broadband stimulus funding, RUS Deputy Administrator Jessica Zufolo told the 2009 FTTH Council Conference & Expo audience today, but the agency is hoping feedback from the telecom industry and others will help RUS get it right in the second round of funding, set for next year.

"We are eager to work with everybody," Zufolo said. "We want to get it right. It is important for our agency and for the president, and we are open to your suggestions. We want you to feel confident you have partners at RUS that want to help you do as much as possible in investing your hard-earned dollars and the hard-earned dollars of taxpayers in bringing broadband services to underserved rural areas."

Zufolo said RUS is open to almost any suggestions on how to improve the process.  

"Everything is on the table for round two, and we want as much feedback as possible on how to expand the applicant pool to include more rural areas that are unserved by broadband," said Zufolo, filling in for her boss, RUS Administrator Jonathan Adelstein, who was scheduled to appear. "We want as much feedback as possible. We will publish a request for information that will guide us on how to construct the next NOFA [broadband stimulus rules]. We definitely want your input."

Zufolo had been in the audience earlier in the day when a panel of three applicants criticized the process of applying for the $7.2 billion in federal stimulus funding for its complexity, its confusing terminology and the difficulties in filing applications and supporting maps online as required. Those difficulties had led to a deadline extension when the online filing system was swamped by applications in the last week. Even the agency's choice of software programs came under fire.

"This has been an unprecedented process and project," Zufolo said. "We have already learned a tremendous amount from all stakeholders, and we will make the necessary changes in the next round."

Zufolo confirmed earlier reports that the RUS and its partner in stimulus funding, NTIA, are strongly leaning toward collapsing the scheduled second and third rounds of funding into a single second round. The NOFA for the second round will be issued in December, and funding will be issued next summer, she said.

Zufolo explained the RUS decision to use its $2.5 billion in funds primarily to subsidize loans and not provide grants, as the agency's best opportunity to make the more efficient use of the federal money and have maximum impact. Because the default rate on RUS loans is less than 1% and the subsidy rate is also low, only about 7%, it costs the government only $72,000 to loan $1 million for rural network development, she said.