In its waning days, the last Congress passed, and on December 20 the President signed, the new Farm Bill, which makes many revisions to the various broadband and telecommunications support programs administered by the Rural Utilities Service (RUS). Many of these changes provide new sources of support in rural areas, while others limit where support can be provided. Here’s an overview of some of the key changes:
- Broadband grants may be awarded in addition to loans/loan guarantees, and “authorized” funding for the broadband grants and loans/loan guarantees is increased to $350M per year. (The funding still needs to be appropriated.)
- For broadband grants, an area is eligible for support (unserved) where 90 percent of the households in the proposed service area do not have residential broadband service with speeds of more than 10/1 Mbps. In addition, grants require cost sharing by the recipients. In general, grants cannot exceed 75 percent of the total project cost where the density of the proposed service area is fewer than 7 people per square mile; 50 percent with 7-12 people per square mile; 25 percent with 12-20 people per square mile.
- For broadband loans/loan guarantees, an area is eligible for support (unserved) where 50 percent (versus 15 percent under the old law) of the households in the proposed service area do not have fixed broadband service with speeds of more than 25/3 Mbps.
- Recipients of broadband support have 5 years to complete buildout to provide 25/3 Mbps service, and RUS can require increased speeds after year 5.
New Middle Mile Program
- A new program is initiated to provide middle mile grants, loans, and loan guarantees for projects where at least 75 percent of the interconnection points serve eligible rural areas, and $10M per year of authorized funding is provided.
Innovative Broadband Advancement Program
- The Rural Gigabit Program is changed to a demonstration program for innovative broadband technologies or methods of deployment, and $10M per year of authorized funding is provided for grants/loans.
Community Connect Grant Program
- The longstanding Community Connect program is codified into law, and $50M per year of authorized funding is provided to connect community institutions in areas with less than 10/1 Mbps broadband service.
Smart Utility Authority for Broadband
- Recipients of grants/loans/loan guarantees from the Office of Rural Development are permitted to use up to 10 percent of support for broadband infrastructure projects, except such support cannot be used to provide retail broadband service in areas where service is already available at the minimum broadband speeds.
- Recipients of electric grants/loans/loan guarantees are permitted to use up to 10 percent of support for retail broadband service in areas without the minimum acceptable level of service – but such support cannot be used in areas where there are existing RUS grants/loans/loan guarantees.
Coordination Among RUS, FCC, NTIA
- The key agencies involved with providing support in rural areas are required to consult to verify areas are eligible for support and to ensure one agency does not provide assistance for a project in an area where another agency is already providing support to another entity.
During 2019, RUS will issue notices seeking comment on adopting regulations to implement the changes made in the Farm Bill. In addition, the Congress will consider legislation to appropriate funding (up to the authorized amount) for each of the programs.
Want to read more from Tom?
Check out the Regulatory Updates perspectives page, where we share all the latest regulatory news that impacts service providers.