Rural Development

Rural Communities Broadband Roundtable

RUS Broadband Loan and Grant Programs

Rob O’Hara – Telecom Program GFR Phone - 413-253-4333 [email protected]

Rural Development

RUS Broadband Loan and Grant Programs • Loan Programs

– Farm Bill Broadband Loan Program – Telecom Loan Program • Available to Incumbent Local Exchange Carriers • Funding for Expansion of E911 Access

• Grant Programs

– Distance Learning and Telemedicine Grants – Community Connect Grants

Rural Development

Farm Bill Broadband Program

• • • • • Project Requirements 100% rural service area Last mile projects with middle mile sections – Last mile service must be at 5Mbps or greater 25% of household are underserved households – Underserved = area or household that is not offered broadband service or offer broadband service by only one incumbent service provider Less than 3 incumbent service providers – Incumbent provides 3Mbps service to at least 5% of households – Satellite providers not considered Does not overlap current or pending RUS borrowers or grantees

Rural Development

Farm Bill Broadband Program Loan Terms • Loan award based on economic feasibility

– Minimum Equity Requirement – 10% -but may be higher

• Eligible Loan Purposes

– Covers capital costs and pre-loan expenses (up to 5%) – Loans made at treasury rates – One year principal deferment – First lien position on all assets and revenue of applicant

• Ineligible Loan Purposes

– Operating expenses – Any cost incurred prior to the application being deemed complete (except pre-loan) – Acquisition of stock or facilities of an affiliate – Vehicles not for construction

Rural Development

Farm Bill Broadband Program

• • • Additional Requirements RUS makes a Preliminary Assessment – Is the service area rural – Does the service area overlap with current or pending RUS borrowers or grantees Market Survey – For service offerings projecting more than a 20% penetration rate, a market survey is required Public Notice & Mapping Tool – Map of each service area – Number of underserved households – Number of households without terrestrial based broadband service – Types of proposed services – 30 day public comments period

Rural Development • • • • •

Telecom Program funding for E911 Access

New rules implementing the Expansion of E911 access and integrated emergency communications Authorized in the 2008 Farm Bill - Rule modifies 7 CFR Part 1735 – Funding to come from money authorized under the Traditional Infrastructure Loan Program – Funds available FY 2014 Special Rural Definition for funding under these purposes – City, town, or Incorporated area of 20,000 or less – Outside urbanized areas contiguous and adjacent to cities and towns of 50,000 or less Definition of rural for traditional program remains the same for all other purposes (5000 or less).

Eligible Loan Purposes – 911 Access,Integrated Interoperability Emergency Communications, Homeland Security Communications, Transportation Safety Communications, Location technologies used outside an urbanized area

Rural Development

Distance Learning and Telemedicine Grants

• • • Purpose and definitions The focus of the DLT Grant Program is on using the unique capabilities of telecommunications to connect rural areas to each other and to the world, thus overcoming the effects of remoteness and low population density.

Distance learning

means a curriculum delivered via telecommunications and stresses the connection of students and teachers at remote sites.

Telemedicine

means the delivery of health care from medical professionals at one site to patients at other sites via telecommunications. Telemedicine shows benefit to rural residents either in reduced travel or improved access to services. • • Eligible Applicants Corporation or a partnership; tribal nation or organization a state or local unit of government; a consortium; or other legal entity. For or not-for profit able to contract with the US Government. No individuals or sole-proprietorships.

Operate a rural community facility or deliver DLT services to entities that operate a rural community facility or to residents of rural areas at rates calculated to ensure that the benefit of the financial assistance passes through to such entities or to residents of rural areas.

Rural Development

Distance Learning and Telemedicine Grants

• Eligible Equipment Audio and video equipment, Computer hardware and software, Computer network components, Terminal equipment, Data terminal equipment, Interactive audio/video equipment • For 2013 maximum grant amount $500,000 Ineligible Costs – Salaries and benefits of awardee – Administrative expenses (overhead) – Telecommunications transmission equipment – Recurring costs, including telecommunications – Medical equipment – Equipment owned by telecom provider (LECs, CLECs, etc.) – Duplication of facilities – Costs incurred before the application deadline

Rural Development

Distance Learning and Telemedicine Grants Typical Projects -

• • Distance Learning: Video-conferencing equipment is primary use of distance learning grants including bridges, servers, cameras, projectors, etc.

Telemedicine: Visiting nurse links from patient homes to health professionals elsewhere Tele-radiology Tele-dentistry Tele-pharmacy Virtual ICU

Rural Development

Community Connect Grants

• • • • A nationally competitive grant program to provide broadband service to the most rural and economically challenged communities Rural Areas and Communities of 20,000 population or less To be eligible for a Community Connect competitive grant, the Project must: – Serve an area in which Broadband Service does not currently exist; – Offer service at the Broadband Grant Speed to all residential and business customers within the PFSA; – Offer free service at the Broadband Grant Speed to all Critical Community Facilities located within the PFSA for at least 2 years starting from the time service becomes available to each Critical Community Facility; – Provide a Community Center with at least 2 Computer Access Points and wireless access at the Broadband Grant Speed, free of all charges to all users for at least 2 years.

For 2013 grants range from $100K to $3M

Rural Development

Community Connect Grants

Grants are available to – Corporations Limited Liability Companies Cooperative or Mutual Organizations Indian Tribes Public Body Grant funds may be used to finance: • The construction, acquisition, or leasing of facilities, including spectrum, land or buildings, used to deploy service at the Broadband Grant Speed to all residential and business customers located with the Proposed Funded Service Area and all participating Critical Community Facilities, including funding for up to ten Computer Access Points to be used in the Community Center. • The improvement, expansion, construction, or acquisition of a Community Center and provision of Computer Access Points. • The cost of providing the necessary bandwidth for service free of charge to the Critical Community Facilities for 2 years.

Rural Development

Community Connect Grants

Program revised and simplified in 2013 • Proposed Funded Service Territory is now defined by the applicant • Matching Funds are now limited to cash contributions for operational costs • Scoring Simplification - applications are now scored based on the community connectivity benefits of the project to the proposed funded service area • Broadband Service Definition is now specified in the annual Notice of Funding Availability (NOFA) • FY2013 NOFA established the following: • Broadband Service speed (for determining eligibility): 3 megabits per second combined up and down • Broadband Grant speed: 5 megabits per second combined up and down

Rural Development

Community Connect Grants

Scoring of Grant Applications (up to100 Points): • An analysis of the challenges of the following criteria, laid out on a community-wide basis, and how the Project proposes to address these issues (up to 50 points) • The economic characteristics; • Educational challenges; • Health care needs; and • Public safety issues; • The extent of the Project’s planning, development, and support by local residents, institutions, and Critical Community Facilities (up to 40 points); • The level of experience and past success of operating broadband systems for the management team (up to 10 points). • The RUS Administrator may take into consideration the characteristics of the PFSA, provided by the applicant in the application, such as: • Persistent poverty counties that will be served within the PFSA; • Out-migration Communities that will be served within the PFSA: • The rurality of the PFSA; • The speed of service provided by the Project; • Community members with disabilities that will be served within the PFSA; and • Any other additional factors that may be outlined in the NOFA.

Rural Development

Rural Communities Broadband Roundtable

RUS Broadband Loan and Grant Programs

Rob O’Hara – Telecom Program GFR Phone - 413-253-4333 [email protected]