Rural Development

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Rural Development Telecommunications Program
Funding for Broadband W2i Digital Cities
Convention December 12, 2007
Rural Development 1400 Independence
Ave. Washington, DC 20250 www.usda.gov/rus/telecom

Presenter Jacki Ponti-Lazaruk Assistant
Administrator Jacki.ponti_at_usda.gov 202-720-9554
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Telecommunications Program

• Rural America will have access to
  affordable, reliable, advanced communications
  services to provide a healthy, safe and
  prosperous place to live and work.
• To improve health, safety, education,
  economic opportunity, and quality of life in
  rural America through leadership and investment
  in communications infrastructure and services.

Vision
Mission
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Rural Development Utilities Programs


The Rural Development Telecommunications Program
loan and grant programs

• Infrastructure Loan Program Loans to local
  telephone companies for improving
  telecommunications service in rural communities
• Broadband Access Loan Program and Community
  Connect Grant Program Loans and grants for
  local telephone companies and other service
  providers who offer Broadband (high-speed
  Internet) services in eligible communities
• Distance Learning/Telemedicine Loan and Grant
  Program Loans and grants for providing Distance
  Learning and Telemedicine services to rural
  residents

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Rural Development Utilities ProgramsSupport for
Telecommunications Loan and Grant Applicants

• Strong Local Leadership in Rural Development
  State Offices
• State Directors and Office Staff work with local
  communities to identify potential projects and
  state needs.
• State Offices can be identified at
  http//www.rurdev.usda.gov/recd_map.html
• Telecom Program Staff provide Financial and
  Engineering support and guidance in all 50
  states.
• For Broadband Loan Program and Community Connect
  Grant Program Information, contact Ken Kuchno,
  Director, Broadband Division, at 202-690-4673,
  kenneth.kuchno_at_usda.gov
• 28 General Field Representatives monitor more
  than 1000 telecom and broadband loan and grant
  projects across the country.
• These same field representatives provide
  technical assistance to potential applicants and
  provide information to communities who are
  interested in broadband deployment.
• Identify your local field representative at
  http//www.usda.gov/rus/telecom/staff/gfr-state-li
  st.htm
• National outreach efforts are managed by Mary
  Campanola, at 202-720-8822 mary.campanola_at_usda.go
  v

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Rural Development Telecommunications Program
More than 6 billion invested in rural telecom
infrastructure since 2001
Infrastructure Program
Distance Learning and Telemedicine

• 306 million in DLT grants and loans have been
  awarded.
• In FY 2007, 78 grants and 11 loan/grant
  combinations were awarded. 699 educational
  centers and 512 health centers have gained access
  to improved services.

• Assists the private sector in developing and
  financing the construction of telecom
  infrastructure in rural America.
• 3.7 billion in principal outstanding 550
  borrowers.
• 92 of borrowers are providing Broadband service.

Community Connect
Broadband Loan Program

• Since its inception, the program has provided
  148 grants and invested almost 70 million to
  provide service to local communities.
• Awarded 8.9 million in grants in FY 2007.

• 79 loans have been made, for 1.6 billion, for
  broadband deployment in more than 1900
  communities.
• More than 1.1 million households will receive
  broadband access under loans made.

• Weather Radio and Public TV Digital Grant
  Programs
• 51 Public TV Station Digital Transition grants
  awarded, for 38,837,400
• 93 Weather Radio Transmitter grants awarded,
  for 5,733,703

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Broadband Loans Purpose
To provide loans for the cost of construction,
improvement, and acquisition of facilities and
equipment for broadband services in eligible
rural communities.
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Broadband Loans FY 2008 Budget

• FY 2008 budget not yet available
• 259 million in loans were made in FY 2007
• Under the Continuing Resolution, 495 million is
  available for FY 2008 loans

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Broadband LoansStatistics

• 211 Applications Received Since the Beginning of
  the Program
• Totaling 4,472,879,438
• Applications Processed as of December 1, 2007
• 80 Approved 1,553,266,931
• 18 In Review 594,584,801
• 113 Returned
  2,266,010,168

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Broadband Loans Status and Results (as of
12/1/07)

• Established by the 2002 Farm Bill. 2007 Farm
  Bill reauthorization in process.
• Originally envisioned to fund 2 billion in rural
  broadband deployment by 2007.
• To date, 80 loans have been made for
  approximately 1.5 billion to finance facilities
  in 47 states.
• Projects proposing to serve more than 1.1 million
  subscribers
• 1,979 communities
• 10 projects completed in Kansas, Louisiana,
  Michigan, North Dakota, Nebraska, Oregon, South
  Dakota, Texas and Washington

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Broadband LoansTypes of Organizations Funded

• One Size Does Not Fit All
• Private/public partnerships
• Traditional telephone companies enhancing
  service offerings
• Local service providers serving one or a few
  local communities
• National service providers providing service to
  multiple communities, even multiple states
• Municipalities
• 33 of applications approved have been from
  startup companies

As of 12/12007
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Broadband LoansTypes of Technologies Funded
As of 12/1/07
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Broadband LoansWireless Broadband
Twenty-six percent of the 80 loans made to date
provide financing for wireless systems

• Air Advantage
• Broadband Loans
• 2004 43 communities, 1,500,000
• 2005 12 communities, 1,028,000
• 2007 loan pending
• Community Connect Grants
• 2003 Unionville, Michigan (Pop. 605) 214,532
• 2003 Port Hope, Michigan (Pop. 310) 219,176
• Today they are serving 55 Michigan communities
  and providing service to 2,174 rural Michigan
  customers

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Broadband LoansEligible Entities

• Corporations
• Limited Liability Companies
• Cooperative or Mutual Organizations
• Indian Tribes
• Public Body

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Broadband LoansIneligible Entities

• Individuals
• Partnerships (including LLPs)
• Any entity serving more than 2 of the telephone
  subscriber lines installed in the United States

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Broadband LoansDirect Cost-of-Money Loans
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Broadband Loans Application Information
The regulation, application, application guide,
and all other relevant information is available
on our website at www.usda.gov/rus/telecom/broa
dband.htm
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Broadband LoansApplication Information

• Broadband Loans Search Tool
• Listing of all approved and pending communities
• http//broadbandsearch.sc.egov.usda.gov/SearchTabs
  .aspx
• This search tool is regularly updated.

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Broadband Loans Application Submission

• Prospective applicants should contact their
  respective General Field Representative (GFR)
  prior to submitting the application
• List of the GFRs and the contact information is
  included in Application Guide and at
• http//www.usda.gov/rus/telecom/staff/gfr-state-li
  st.htm
• There is no deadline to submit applications
• Applications will be reviewed and processed on a
  first-come, first-served basis

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Broadband Loans Key Components of an Application

• Credit Support
• Business Plan
• Market Survey
• Financial Information
• System Design

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7 CFR Part 1738 Rural Broadband Access Loan and
Loan Guarantee Program

• Proposed Rule Published May 11, 2007 Public
  Comments Were Due July 10, 2007
• Rural Developments Goals
• Our Proposed Rules will
• Promote deployment to rural areas with little or
  no service
• Limit funding in urban areas and areas where a
  significant share of the market is served by
  incumbent providers
• Clarify and streamline the equity and marketing
  survey requirements
• Increase the transparency of the application
  process
• Promote a better understanding of all application
  requirements
• Ensure that projects funded are keeping pace with
  increasing demand for bandwidth
• 2007 Farm Bill Will Also Impact Broadband Program

Ensure that rural residents have access to
affordable and reliable quality broadband service
in rural communities
Make sound lending decisions and to ensure
positive investment of taxpayer dollars
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Community Connect Grant Program

• A nationally competitive grant program to provide
  broadband service on a community-oriented
  connectivity basis to the most rural and
  economically challenged communities.
• Since its inception, the Community Connect
  program has provided 148 grants and invested
  almost 70 million to provide service to local
  communities.

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Community Connect Grant Program

• Serves one Community
• Community without Broadband
• Provides a Community Center
• Free service to Critical Facilities

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Community Connect Grant Program

• New for 2008
• Added Rand McNally as a community qualifier if
  the Census does not recognize a community
• Using MHI based on the state average rather than
  PCI based on the national level
• Clarified allowable operating expenses
• No other changes are expected to be made to the
  program rules for FY 2008

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Community Connect Grant Program

• FY 2008 Budget not yet available.
• Under the Continuing Resolution, approximately
  8.9 million will be available for Community
  Connect grants.
• Notice of Availability of Funds will be published
  in the Federal Register to announce the opening
  of the grant application window (date TBD).
• We anticipate a 60-day grant application window.

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W2i Digital Cities Convention 12/12/07
Jacki Ponti-Lazaruk, Assistant Administrator
Thank You