On April 8, the Department of Agriculture’s (USDA) Rural Utilities Service (RUS) published a Notice of Solicitation of Applications (NOSA) in the Federal Register for the Rural Broadband Access Loan and Loan Guarantee Program (the Broadband Program) for Fiscal year 2016. Loans are available ranging from $100,000 to $10 million. Applications will be accepted from April 8, 2016 through July 7, 2016.
The Broadband Program provides loans to corporations, Limited Liability Companies, Cooperatives, State or local governments and Indian tribes or tribal organizations for the construction, improvement and acquisition of facilities and equipment. The loan will not fund operating expenses, construction costs incurred prior to the issuance of a complete application status, the purchase of Customer Premises Equipment (CPE) and installation of installed writing (unless certain conditions are met) and leased facilities, among others.
The Loan requires that applicants meet the required Broadband Lending Speed for Eligible Rural Areas.
- The Broadband Lending Speed is the new broadband service offered by the applicant, which must meet a minimum of 10 MB downstream and 1 MB upstream for both fixed and mobile services to the customer.
- RUS defines a rural area as one which is not located within (i) A city, town, or incorporated area that has a population of greater than 20,000 inhabitants; or (ii) An urbanized area contiguous and adjacent to a city or town that has a population of greater than 50,000 inhabitants.
RUS will evaluate applications on the number of unserved households in the Proposed Funded Service Area (PFSA), which is the geographic area within which an applicant proposes to offer service at the Broadband Lending Speed using broadband loan funds. Those applicants seeking to serve the most unserved households will receive funding offers prior to other eligible submitted applications.
The Broadband Loan Program requires that in addition to being located entirely within a rural area, a service area must be contained within a rural area or multiple rural areas with at least 15 percent of the households unserved, no part of the PFSA has three or more incumbent service providers and no part of the PFSA overlaps with the service area of current RUS borrowers or grantees.
To receive a loan under the Broadband Program, applicants must:
- Have sufficient authority to enter into a contract with RUS;
- Submit a loan application that adheres to the requirements published in 7 CFR 1738 and any additional requirements published in the Federal Register;
- Agree to complete the build-out of the broadband system described in the loan application within three years;
- Demonstrate an ability to furnish, improve or extend service at the Broadband Lending Speed in rural areas;
- Demonstrate an equity position equal to at least 10 percent of the amount of the loan requested; and
- Provide additional security if necessary to ensure financial feasibility as determined by the Administrator.