Those interested in deploying advanced telecommunications infrastructure should investigate these programs and participate in the administrative proceedings that are expected to be conducted soon.

On February 17, 2009, President Obama signed into law the $787 billion economic stimulus package, the American Recovery and Reinvestment Act of 2009 (the Act).  Among other things, this new law includes numerous opportunities for telecommunications carriers, utilities and other entities seeking to fund advanced broadband and smart-grid initiatives.  The structure of these programs, however, is not finalized because the Act leaves many key details to the discretion of the federal agencies responsible for implementing the programs and dispersing the funds.

Those interested in deploying or expanding advanced telecommunications infrastructure should investigate these programs and participate in the administrative proceedings that are expected to be conducted soon.  With the administration’s strong push to have these funds released and put to work as soon as possible, there could be great opportunities secure new funding or to partner with other grant recipients in helping to build out these telecommunications infrastructure projects.

Broadband Technology Opportunities Program

The economic stimulus package allocates $4.7 billion to the National Telecommunications and Information Administration (NTIA) for the newly created Broadband Technology Opportunities Program.  While the program includes up to $350 million for the development and maintenance of a broadband inventory map, the majority of the money is allocated for grants, prior to the end of fiscal year 2010, to fund broadband-related projects in unserved and underserved areas, including (but not limited to) the following:

  • Acquiring equipment, instrumentation, networking capability, hardware and software, digital network technology and infrastructure for broadband services
  • Constructing and deploying broadband service related infrastructure
  • Constructing and deploying broadband facilities that improve public safety broadband communication services
  • Undertaking such projects and activities as NTIA finds to be consistent with the purposes for which the program is established

The federal share of any project may not exceed 80 percent, unless a waiver is granted by NTIA.

In addition to permitting NTIA to fund projects or activities it deems to be consistent with the purposes for which the Broadband Technology Opportunities Program was established, the stimulus package also leaves a number of other issues to the discretion of NTIA.  For example, under the Act, entities eligible for grant funding include state or political subdivisions, non-profit organizations and any other entity, including a broadband service or infrastructure provider, that NTIA finds by rule to be in the public interest.  While the legislative history indicates that Congress intended that “as many entities as possible be eligible to apply for a competitive grant, including wireless carriers, wireline carriers, backhaul providers, satellite carriers, public-private partnerships, and tower companies,” the final decision is in the hands of NTIA.  Congress also instructed NTIA to publish non-discrimination and network interconnection obligations that will be contractual conditions for receiving these grants, and did not define such key terms as “unserved area,” “underserved area” and “broadband.” 

Department of Agriculture

The Act makes available $2.5 billion through the U.S. Department of Agriculture’s (USDA’s) Rural Utility Service (RUS) for broadband loans, loan guarantees and grants.  The legislation provides significant discretion to the secretary of agriculture in allocating these funds through existing or new initiatives, but does require that at least 75 percent of the area to be served by a project receiving funds from such grants, loans or loan guarantees to be in a rural area without sufficient access to high speed broadband service, as determined by the secretary.  In addition, no area of a project funded with these monies may also receive funding to provide broadband service under the Broadband Technology Opportunities Program. 

While the exact criteria for receiving a grant under this program has yet to be determined, the broadband loans and loan guarantees funded by this legislation likely will be made available through the USDA’s existing Rural Broadband Access Loan and Loan Guarantee Program, which is designed to provide loans for funding, on a technology neutral basis, for the costs of construction, improvement and acquisition of facilities and equipment to provide broadband services. 

Smart Grid Investments

The Act sets aside $4.5 billion for electricity delivery and energy reliability activities, including the existing Smart Grid Regional Demonstration Initiative and Smart Grid Matching Grants Program, and modifies these programs to provide individual projects with a greater percentage of funding.

Under the revised Smart Grid Regional Demonstration Initiative, the secretary of energy is authorized to provide funding to electric utilities or other parties of up to 50 percent of the cost of qualified advanced grid technology investments made as part of demonstration projects in urban, suburban, tribal and rural areas.  The secretary of energy also is required to create a “smart grid information clearinghouse” and make data from smart grid demonstration projects available to the public.  In addition, funding recipients are to provide data to the smart grid clearinghouse and use open protocols and standards (including internet-based protocols and standards), if available and appropriate, in their demonstration projects.

The Act also expands the existing Smart Grid Matching Grant Program to provide reimbursement of up to 50 percent of qualifying smart grid investments, and allows reimbursement of investments or expenditures for smart grid technologies that “are eligible for,” but do not “utilize,” tax credits or deductions under the Internal Revenue Code.  As with the demonstration initiative, grant recipients are required to utilize open protocols, if available and appropriate. 

The economic stimulus package sets aside $3.25 billion for the Western Area Power Administration and $3.25 billion for the Bonneville Power Administration, and establishes a temporary loan guarantee program for the rapid deployment of renewable energy and electric power transmission projects.  It also establishes a 30 percent Advanced Energy Project tax credit for projects that, among other things, re-equip, expand or establish a manufacturing facility for the production of property that is designed to produce smart grid technologies. 

Timetable

Since the enactment of this legislation, the Office of Management and Budget (OMB) has released initial guidance to federal agencies for carrying out the programs and activities established by the Act. 

While the OMB’s memorandum does not specifically discuss the programs outlined above, it does provide general guidance likely to be applied to these initiatives.  For example, federal agencies are to establish a web page on their existing website dedicated to the Act, which will link to Recovery.gov (a website established by the Obama administration to explain and track the economic recovery efforts) and provide a single portal for all agency-specific information related to the Act.  Beginning March 3, 2009, agencies are to submit weekly reports to OMB, and by May 1, 2009, are to submit an “Agency Recovery Plan” and a separate “Recovery Program Plan” for each program named in the Act.  The OMB’s memorandum further states that, for grant awards, agencies shall, within 20 days after enactment of the Act, post funding opportunity announcements (i.e., “synopses”) to Grants.gov, and within 30 days of enactment, link the Grants.gov synopsis to the full announcement on the agency website.

It is anticipated that NTIA, RUS and the Department of Energy soon will provide more details concerning the implementation of these programs.  For example, NTIA has announced it is planning to meet with interested members of the public, either one-on-one or in groups, to solicit views on how its program should be implemented.