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$720,000,000,000.
That’s a pretty big number and, as I’m sure you’ve heard, that’s the amount allocated to broadband in the American Recovery and Reinvestment Act of 2009, President Obama’s stimulus package.
Big Telcos may care less. But if you’re a smaller, rural operator, you could have reason to cheer. And act fast.
The bill doesn’t offer big tax credits to companies like Verizon and AT&T. Actually “Big Telcos get more competition," said George Reed Dellinger, an analyst at Washington Analysis. "Municipal broadband networks are competitors for the Telcos, and CLECs (competitive local exchange carriers) will partner with them."
About $2.5 billion will be administered through the Rural Utilities Service (RUS), which has until the end of September 2010 to award that money. Projects must be “substantially complete” within two years of the award date. Rural Telcos may be in the best position to receive a lot of that amount since many of them already understand the process. The money may come in the form of grants, loans or loan guarantees, similar to RUS loans with more strings attached.
After receiving 2,000 inquiries, today March 10, the FCC, US Department of Agriculture (USDA) and the National Telecommunications and Information Administration (NTIA) answered questions at the jam-packed Department of Commerce office in Washington DC to try to respond to inquiries on how those organizations will distribute the funds. More meetings will be held through March and April.
The government must approve at least one grant in each state, in addition to the District of Columbia and some US territories.
“If you do the simple math, that's not a lot of money per state, but that's not an impediment, that's a challenge,” said Mark Seifert, a senior advisor to the NTIA. With around $7 billion to spend in total, that would amount to less than $140 million per state, but the money won’t be distributed evenly.
They’re also hoping to use some of the money to obtain more loans. “So we're hoping that we will be able to leverage those resources to deliver substantially more than the $2 billion that we have been given by the president,” said David Villano, the USDA’s assistant administrator for communications.
The NTIA said it may spend up to $350 million on broadband mapping and planning, $200 million or more on public computer access and “at least” $250 million on programs to widen broadband adoption.
Although many questions remain unanswered – representatives both organizations repeated that more specific information will come after they have reviewed public suggestions – officials did offer some insight and advice to those hoping to secure some of the funds allocated for expanding broadband availability.
Applicants can apply to both the USDA and NTIA for funding different parts of the same project, but they can’t get paid twice for the same part.
USDA grants will require 75% of the area served by an approved project to be in a “rural” area without sufficient broadband. The NTIA, on the other hand, will oversee both “unserved” and “underserved” areas. They’ll more specifics after reviewing public suggestions to help define those terms and they will also fund states to aid in broadband mapping.
Other criteria for ARRA funding include whether a project is deemed by the government to enhance service for health care, education and children, and it will weigh if an applicant is a “socially and economically disadvantaged small business.”
Collaboration was also indicated as a favorable condition. “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.”
A form to apply for funds is available here. Funding is only available for projects that would not have proceeded without federal assistance.
The NTIA will award funds in three phases, so money can be received and used by projects that can launch immediately. The first monies will be awarded between April and June of this year. The second phase will occur between October and December, and the final phase will be between April and June of next year.
Jenniffer Mackey
Sales Director Telco
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