On February 17, 2009, President Obama signed into law the $787 billion economic stimulus package, or the “American Recovery and Reinvestment Act of 2009” (the Act). The Act appropriates $7.2 billion for the deployment of broadband infrastructure and services to unserved areas, underserved areas, and to targeted organizations.

The $7.2 billion for broadband awards consists of two separate programs: one will be administered by the Department of Agriculture and one will be administered by the Department of Commerce. The Department of Agriculture’s Rural Utilities Services (RUS) will oversee $2.5 billion for grants, loans, and loan guarantees. The Department of Commerce’s National Telecommunications and Information Administration (NTIA) will oversee $4.7 billion to create the “Broadband Technology Opportunities Program” that will primarily award competitive grants. Applicants may not receive funding for the same project from both the RUS and the NTIA.

The Act does not contain any minimum threshold speed requirements for broadband services. Also omitted were broadband tax credits. Further, the grants awarded by the NTIA will be conditioned on non-discrimination and network interconnection obligations including, at a minimum, adherence to the principles contained in the Commission’s broadband policy statement (FCC 05-15).

Under the Act the NTIA is required to establish and implement the Broadband Technologies Opportunities Program as “expeditiously as practicable” and to award all grants available under the program by September 30, 2010. The Department of Commerce and the Department of Agriculture are already developing application processes and requirements to administer the programs and are expected to release the details of the application requirements soon.

We have provided the highlights of the Act’s broadband funding programs. The applications for awards will be due in a short time-frame and the funds are certain to be awarded on an expedited basis. If you are interested in applying for an award for a broadband project we urge you to start evaluating your project under the criteria set forth below as soon as possible.

The Department of Agriculture RUS Broadband Program

  • $2.5 billion is appropriated to the RUS for “grants, loans, or loan guarantees for broadband infrastructure in any area of the United States” provided that:
      • at least 75% of the area to be served by a project must be in a rural area without “sufficient access to high speed broadband service to facilitate rural economic development ” This standard is to be determined by the Secretary of Agriculture.
  • The Act requires the RUS to give priority to certain applicants and projects, including:
      • project applications that provide service to the highest proportion of rural residents that do not have access to broadband services;
      • project applications for broadband systems that will deliver end-users a choice of more than one service provider; and
      • project applications from current borrowers or former borrowers under Title II of the Rural Electrification Act, which is a telephone loan program for small and mid-sized rural local exchange carriers.
  • Priority must also be given to projects that can be completed with the requested funds and to project applications that demonstrate that the project can commence “promptly” following approval.
  • No later than May 18, 2009 the Secretary of Agriculture must report details of its planned spending and actual obligations on the use of these funds.

The Department of Commerce NTIA “Broadband Technology Opportunities Program”

  • Program. The NTIA is required to develop a “national broadband service development and expansion program” to:
  • Eligibility. To be eligible for a grant under the NTIA program the application must:
  • Funding. Unless it meets an exception an application may only request 80% of federal funding for a proposed project.
  • Content. Under the Act the NTIA is authorized to award grants to:
  • Approval Criteria. To the “extent practical” the NTIA will:
  • Open Access. NTIA (in coordination with the FCC) must publish “non-discrimination and network interconnection obligations that shall be contractual conditions of grants” and that, at a minimum, “adhere to the principles contained in the FCC’s broadband policy statement (FCC 05-15, adopted August 5, 2005).”
  • Agency Obligations. Within one year the FCC is required to create a “national broadband plan” that ensures that every American has access to broadband services and that sets forth benchmarks to meet the FCC’s access and utilization goals. Within two years the NTIA is required to develop a comprehensive nationwide broadband inventory map that is accessible by the public.