New broadband stimulus funding targets satellite service

The Rural Utilities Service issued a request for proposal Friday indicating that the agency will award approximately $105 million in what is essentially a third broadband stimulus funding round.

The vast majority of the money—up to $100 million—will go to help cover the cost of bringing broadband satellite service to remote areas. The remaining $5 million is earmarked for organizations winning funding in Round 1 or Round 2 of the broadband stimulus program and would go toward technical assistance and rural library programs.

All funding will be in the form of grants. The $105 million is not a new appropriation but rather was carved out of the total $2.4 billion in stimulus funds that the RUS was given responsibility to administer. Friday’s announcements formalizes plans for funding satellite service that the RUS outlined when it issued guidelines in January for the second funding round, which had a filing deadline in late March.

At that time, RUS administrator Jonathan Adelstein said, “We are going to stretch every last dime to maximize economic development in rural areas that currently lack adequate broadband service.”

Applicants to the satellite program must commit to providing and installing customer premises equipment at no charge. They also must agree to offer a basic service package for $50 a month or less for at least one year. If the cost of service is less than $40 a month, the applicant can require a one-year contract as long as it offers an unconditional 30-day cancellation clause. If the cost of service is between $40 and $50, there can be no length of service requirements. In their application, satellite providers must indicate the proposed amount per subscriber that is requested in federal assistance.

Applicants may apply to deliver service to unserved areas nationwide or within any of eight regions. One or two applicants may be selected per region.

The new RFP came out one day after Federal Communications Commission officials presented the results of a study estimating the cost to bring broadband to unserved areas at $23.5 billion. In that study, officials indicated that there are about 250,000 U.S. households that could most economically be served through satellite.

The rural library grants would go toward the cost of computers for rural libraries. The technical assistance grants cover activities such as regional broadband development planning, market studies, engineering designs and financial analysis. Because Round 2 awards have not yet been made, organizations that applied in Round 2 may apply for the library or technical assistance grants.

Applications for the new funding round will be accepted between May 7 and June 7, 2010. All awards will be made by September 30, 2010.