Deadline and details of broadband stimulus funds released

Telcos seeking broadband stimulus funding can begin submitting their applications July 14 and will have until Aug. 14 to apply for the first round of funds, according to a Notice of Funds Availability issued today by the Rural Utilities Service and the National Telecommunications and Information Administration.

The agencies expect to award about $4 billion in this round, with two additional rounds of a similar size to follow. The total amount that the agencies expect to award exceeds the $7.2 billion award amount specified in the American Recovery and Reinvestment Act passed early this year because the RUS anticipates awarding a mixture of loans and grants. As a senior administration official for the RUS told reporters on a conference call today, a lower amount of appropriated dollars can support a higher amount of loans because the loans eventually will be repaid. All NTIA-awarded funds will be in the form of grants.

The NOFA offers definitions of several terms used in the act that until now have been vague, including “broadband,” which is now defined as a terrestrial wireless or landline connection that can deliver speeds of at least 768 kb/s downstream and 200 kb/s upstream. Although these speeds are lower than some might have wished, a senior administration official for the NTIA told reporters that this definition was influenced by geographic realities. Because it is difficult to deliver speeds above 10 Mb/s over certain types of terrain, he said, the lower data rate was chosen. But in awarding funds, he said, preference would be given to higher-speed projects.

Both the RUS and NTIA expect to use a two-step award process. Finalists will be announced on Sept. 15 and the agencies will begin making awards on Nov. 7. In making the awards, the agencies will give preference to projects based on a range of criteria, such as project viability and sustainability, affordability of services delivered, applicant’s organizational capability and for relying more heavily on loans than grants.

Rural telcos that have complained about the high cost of backhaul connections to Internet points of presence will be pleased to learn that as much as $800 million of the $2.4 billion total that the RUS plans to award in this funding round will go toward middle-mile initiatives. The officials defined areas qualifying for middle-mile funding to include those with “one or more terminations into a census block that qualifies as ‘unserved’ or ‘underserved.’”

In the NOFA, “unserved” is defined as one or more contiguous census tracts in which at least 90% of households lack broadband connectivity. “Underserved” areas are those where 50% of households or more lack broadband, where fewer than 40% of households subscribe to broadband or where no service provider advertises broadband transmission speeds of at least 3 Mb/s.

In addition to the $800 million for middle-mile connectivity, the RUS plans to award up to $1.2 billion for last mile projects and to retain approximately $325 million in a reserve fund to augment other categories or to be used for future funding rounds.

The NTIA will award up to $1.4 billion in this funding round. That will include up to $1.2 billion for broadband infrastructure projects, up to $50 million for public computer center projects and up to $150 million for sustainable broadband adoption, along with as much as $200 million for a reserve fund.

According to today’s NOFA, future NOFAs may not follow the same guidelines.