Separate NTIA and RUS NOFAs Allow Applicants to Apply to Either Program; Focus on "Comprehensive Community" Infrastructure Projects for "Maximum Investment Impact"

On January 15, 2010, the U.S. Departments of Commerce (NTIA) and Agriculture (Rural Utilities Service or "RUS") announced the rules for their second round of funding in separate but "complementary" Notices of Funds Availability ("NOFAs") for a combined $4.8 billion of additional broadband stimulus funding. This is not a comprehensive recitation of all provisions of both NOFAs, but recites some of the highlights of the new agency NOFAs.

Based on comments from interested parties, including many applicants or would-be applicants in the first round of funding for which applications were due in August 2009, the agencies have sought to make the application process more streamlined and "user-friendly," while further defining and tailoring the respective funding priorities of each agency. Unlike the first round of funding, in which all broadband stimulus applicants in "rural"-defined areas were required to apply for RUS funding first before consideration by NTIA, applicants may now separately apply to either program, subject to the respective programs' NOFA criteria. The NTIA BTOP will now prioritize a "comprehensive communities" approach to awards for middle mile infrastructure projects. RUS BIP applicants will prioritize last mile infrastructure projects. The parameters for the second round of funding were released even though only a handful of first round awards of stimulus funding by NTIA and RUS have been announced. An NTIA spokesperson said that by January 29, all applicants not undergoing due diligence for their first round applications will have been sent letters, and that all first round applicants should receive the final decisions "with sufficient time" to file in the second round if they wish.

The second round NOFAs each establish the application criteria to be used by NTIA and RUS for evaluating applications for funding in the remaining and final cycle of stimulus funding awards to be announced by September 30, 2010. NTIA and RUS have been appropriated $7.2 billion by Congress under the American Recovery and Reinvestment Act of 2009 ("Recovery Act") for broadband initiatives. Congress required NTIA and RUS to develop funding procedures for these broadband initiatives, and also to define key terms in the Recovery Act governing the broadband stimulus spending.

$4.8 Billion for Final Cycle of Recovery Act Stimulus Funding

NTIA and RUS have allocated $4.8 billion of the total $7.2 billion of funding to these two NOFAs for the second and final cycle of broadband stimulus funding. Of the total $4.7 billion allocated by Congress to the NTIA Broadband Technology Opportunities Program ("BTOP"), the funds available to be awarded in this cycle has significantly increased to $2.6 billion (from a total $1.6 billion in the first round), of which $2.35 billion is earmarked for broadband infrastructure projects. The available second round BTOP funds are broken down as follows:

NTIA/BTOP - $2.6 Billion in Grants

  • $2.35 billion for Comprehensive Community Infrastructure (CCI) - with an emphasis on Middle Mile broadband infrastructure projects offering "new or substantially upgraded" connections to community anchor institutions, such as universities, community colleges, libraries; hospitals and public safety institutions offering public access to the Internet.
  • $150 million for Public Computer Centers (PCC) (expanded computer center capacity at community colleges and public libraries).
  • $100 million for Sustainable Broadband Adoption (SBA) (i.e. broadband education, awareness, training, access, equipment or support, "particularly among vulnerable populations").

NOTE: Relationship of BTOP to BIP: CCI applicants that are currently RUS loan or grant recipients OR whose project includes a Last Mile service area at least 75 percent rural should apply to BIP; such applicants will "not be viewed favorably by NTIA". RUS/BIP - $2.2 Billion in Grants and Loans

  • Focus on Last Mile projects, but will fund Middle Mile Projects involving current RUS program participants.
  • Modified Eligible Service Areas: Areas qualified for funding are any rural area in which 50% of premises do not have access to 5 Mbps (upstream and downstream combined) broadband service.
  • Second Funding Window to open later for grants for satellite service for premises that are unserved after all other Recovery Act broadband funding is awarded.
  • RUS adopting a base 75% grant/25% loan combination for all projects.

NTIA Removes Requirement that Infrastructure Projects Must be Located in Unserved or Underserved Areas

By prioritizing the "comprehensive communities" approach of middle mile broadband projects that connect key community anchor institutions to maximize the benefits of broadband funds (as contrasted to building broadband infrastructure to the most unpopulated and unserved/underserved areas), NTIA no longer requires that applicants must identify a certain number of unserved or underserved proposed funded service areas (FSAs) as a condition for funding. Instead, projects in underserved and unserved areas will receive additional consideration.

NTIA Highest Priority for Merit Review for Middle Mile Infrastructure Projects Will Be Projects Satisfying the Following Criteria:

  1. infrastructure involving new or substantially upgraded service to community anchor institutions;
  2. public-private partnership among government, non-profit, and for-profit entities;
  3. infrastructure that intends to bolster growth in economically distressed areas;
  4. a commitment to serve community colleges that have indicated a need for access or improved access to broadband service;
  5. a commitment to serve public safety entities that have a need for access or improved access to broadband service;
  6. a Last Mile infrastructure component in unserved or underserved areas; or commitments or non-binding letters of intent from one or more Last Mile broadband service providers (in rural areas, costs to serve non-community anchor institutions is not to exceed 20 percent of total project costs);
  7. projects that propose to contribute a non-federal cost match of 30 percent or more of the total eligible project costs.

Improved Application Process

Applications must be received no later than March 15, 2010 at 5 p.m. EDT, and will be accepted beginning on February 16, 2010. Following complaints about the attachment-heavy online application process in the earlier round, NTIA has taken steps to streamline the application system to make it more user friendly. NTIA is reducing the number of attachments to be uploaded with the application, and has eliminated the proposed funded service area mapping tool (which increased application costs). Both NTIA and RUS have modified service area specifications from Census blocks to less burdensome Census tracts and block groups.

The NOFA evaluation phase has been limited to screen applications for three gating criteria: (1) eligible entities; (2) fully completed application; and (3)matching funds. Other criteria have been moved to the expert review and due diligence phase of review. Those applications that pass will advance for the "Due Diligence" and expert review phase of consideration, in which two expert reviewers will review the application. Additional information will be requested from applicants supporting the application.

States (and now Tribes) will again be provided an opportunity to make recommendations during the NTIA due diligence phase, in which States and Tribes will have at least 20 days from notification to provide NTIA and RUS their consultative comments.

Application forms are to be posted on Though applications will be accepted beginning on February 16, 2010, application forms have not yet posted on the website as of this alert. All applications must be submitted electronically at

Workshops to be held from January 26 to February 12, 2010

NTIA and RUS representatives will hold a second series of public and free workshops regarding the application process for the second round of broadband stimulus grants and loans from January 26, 2010 to February 12, 2010 in Portland, OR; Reno, NV; Denver, CO; San Antonio, TX; Eureka, MO; Sioux Falls, SD; Detroit, MI; Blacksburg, VA; Fayetteville, NC; and Atlanta, GA. The public can register for any workshops at

Interested broadband stimulus funding applicants are strongly encouraged to obtain legal and technical advice regarding compliance with the NOFA requirements. The NOFA rules and application requirements are both legally and technically very complex. Sonnenschein has been advising clients on how best to prepare a qualifying application for broadband stimulus funds.