From the desk of the Law Offices of Thomas K. Crowe, P.C., full contact info below.
The recently enacted “stimulus” legislation, or American Recovery and Reinvestment Act of 2009 (“Recovery Act”), has the potential to substantially upgrade and enhance the American nationwide broadband network. The Recovery Act does this principally by allocating an unprecedented $7.2 billion (to be awarded primarily through grants and loans) to promote high-speed Internet programs.
Entities eligible to apply for grants and loans under the lead National Telecommunications and Information Administration (“NTIA”) program stand to be direct beneficiaries. Such entities include service providers (where the NTIA finds their participation to be in the public interest—e.g., broadband and infrastructure providers). The Recovery Act does not appear to place restrictions on supported technologies, meaning that wireline, wireless and satellite technologies should all be covered. Also eligible are states, counties, municipalities and other government entities as well as the U.S. territories. Finally, nonprofit entities (including nonprofit corporations) are eligible to participate. In short, a wide range of eligible entities will compete for grants and loans through a bidding process managed by the Department of Commerce’s NTIA and the Rural Utilities Service (“RUS”) of the Department of Agriculture.
The Recovery Act charges the RUS and the NTIA with making grants and loans to expand broadband deployment and for other important broadband projects. Of the $7.2 billion allocated for this effort, the NTIA was allocated $4.7 billion in total grant funds and the RUS will administer $2.5 billion in grants and loans.
The Recovery Act also assigns to the FCC the overarching duty of creating a national broadband plan. By early next year, the FCC is required to deliver to Congress a national broadband plan that seeks to ensure that every American has access to broadband capability and establishes clear benchmarks for meeting that goal. While NTIA, RUS and the FCC have stated that they intend to work cooperatively in this effort, each has a distinct and separate role, and grant/loan applications will need to be submitted before the proper government authority.
Little is known about program details at this time. Application windows are expected to open in the near future but filing windows have not yet been established. It is expected that grant and loan processes will move swiftly, however. Applications will also need to be filed in conformity with specific rules and formats; however, much of this has yet to be established. NTIA and the RUS are discussing a common application form to make it easier for entities to file grant applications with both government entities. In short, while the programs have been launched by the Recovery Act, staffing and procedure implementation is presently ongoing at the NTIA and RUS.
While uncertainty looms, the program has the potential to greatly enhance the American high speed broadband infrastructure, leading to new technologies and services, new competitive opportunities, employment opportunities and access by all Americans to the same robust broadband services. In fact, the FCC goes even further when it states, “high-speed ubiquitous broadband can help to restore America’s economic well-being and open the doors of opportunity for more Americans, no matter who they are, where they live, or the particular circumstances of their lives. It is technology that intersects with just about every great challenge facing our nation.”
NTIA
The $4.7 billion available through the NTIA program (known as the “Broadband Technology Opportunities Program” or “BTOP”) is allocated for competitive grants for broadband deployment efforts. According to Section 6001 of the Recovery Act, the program is to be established and implemented “as expeditiously as possible” and grants must be awarded before the end of fiscal year 2010.
NTIA is currently contemplating three waves of funding to allow applicants who may not be ready at the beginning of the grant program to participate in later waves. The first awards are expected to be issued in early fall 2009, with the second wave of applications beginning thereafter. A third wave of applications could begin in the spring of 2010 in order to complete a final round of awards before the statutory deadline of September 30, 2010.
Eligible entities are summarized above. Which applications the NTIA will choose to fund is a key question. The Recovery Act specifies that NTIA consider whether an application will increase the subscribership and affordability of broadband service to the greatest population of users in an area; whether the application will enhance service for health care delivery, education, or children to the greatest population of users in an area; and whether it will not result in unjust enrichment as a result of support from another Federal program in the area. The Recovery Act also requires consideration of whether the applicant is a socially and economically disadvantaged small business concern.
Grants may be awarded to: a) acquire equipment, instrumentation, and networking capability, hardware and software, digital network technology, and infrastructure for broadband services; b) construct and deploy broadband infrastructure; c) ensure access to broadband service by community anchor institutions; d) facilitate access to broadband service by low income, unemployed, aged or vulnerable populations to provide educational and employment opportunities; and e) construct and deploy broadband facilities that improve public safety broadband communications services. The federal grant portion of any project may not exceed 80% (absent a waiver), which means generally that a 20% match is required. Not less than one grant in each state is to be awarded “to the extent practicable”. States may be consulted with respect to identifying unserved and underserved areas, and regarding “the allocation of grant funds within that state for projects in or affecting the state.”
Approved grants must comply with non discrimination and network interconnection obligations set by the RUS and FCC. Among other things, the NTIA is to develop and maintain a comprehensive nationwide inventory map of existing broadband service capability and availability in the United States showing the geographic extent to which broadband capability is available from a commercial provider or public provider throughout each state. This “broadband inventory map” shall be posted on the NTIA website in an interactive and searchable format.
RUS
The $2.5 billion available under the RUS Broadband Loan and Grant Authority program covers loans, grants and loan guarantees for open access broadband infrastructure projects that serve primarily rural areas. Under the Recovery Act, at least 75% of the area to be funded must be in a rural area that “lacks sufficient access to high speed broadband service to facilitate rural economic development”. The Broadband Loan and Grant Authority program will give priority to projects that will: a) give end the users a choice of Internet service providers; b) serve the highest proportion of rural residents that lack access to broadband service; and c) be fully funded and ready to start once they receive funding under the Recovery Act. Priority will also be given to projects that can commence quickly. Projects funded through this program may not also be funded through the BTOP.
FCC
The FCC does not have the authority to issue grants or loans. Instead, as indicated above, the Recovery Act charges the FCC with creating a national broadband plan. By February 17, 2010, the FCC must deliver to Congress a national broadband plan that seeks to ensure that every American has access to broadband capability and establishes clear benchmarks for meeting that goal. On April 8, 2009, the agency released a Notice of Inquiry to launch this effort by seeking comment from all interested parties on the elements that should go into a national broadband plan. According to the Notice, “[w]e recognize that achieving this goal requires the wholehearted effort of both the private and the public sector.”
The Notice further states that the FCC’s plan must reflect an understanding of the problem, clear goals for the future, a route to those goals, and benchmarks along the way. And the plan must also allow for modification as the agency learns from experience. According to the Notice, “our plan must reflect the input of all stakeholders—industry, American consumers; large and small businesses; federal, state, local, and tribal governments; non-profits; and disabilities communities”.
Entities interested in applying for grants or loans from the NTIA or RUS must be prepared to act swiftly as the awards process will proceed at a rapid pace. Interested parties should begin assembling applications now to meet upcoming filing windows. Moreover, the process will be governed by NTIA and RUS rules and regulations so applications must adhere to such requirements.
The BTOP and related RUS programs have the potential to change the U.S. broadband infrastructure, and would appear to present an unprecedented investment opportunity for certain service providers, nonprofits, as well as state and territorial government entities which qualify for grant or loan funds.
Please feel free to contact us if your organization is interested in participating in the NTIA BTOP or RUS grant and loan programs, or if you have questions about the programs:
Thomas K. Crowe, Partner
Law Offices of Thomas K. Crowe, P.C.
1250 24th Street, N.W.
Suite 300
Washington, D.C. 20037
(202) 263-3640 (voice)
(202) 263-3641 (fax)
firm@tkcrowe.com
www.tkcrowe.com
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