Transcript NARUC Summer Meeting July14, 2007 Rural Development 1400 Independence Ave. Washington, DC 20250 www.usda.gov/rus/ Presenter: Kenneth Kuchno Director, Broadband Division Telecommunications Program.

NARUC
Summer Meeting
July14, 2007
Rural Development
1400 Independence Ave.
Washington, DC 20250
www.usda.gov/rus/
Presenter:
Kenneth Kuchno
Director, Broadband
Division
Telecommunications
Program
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Rural Development Utilities Programs
Nationwide Investment
 More than $5.7 billion invested in rural
telecommunications infrastructure
 Almost 2 million rural homes and businesses have
received access to high-speed broadband connections
 More than $251 million in Distance
Learning/Telemedicine grants and loans have been
awarded to rural health and education providers
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Broadband Loan Program: Status and Results
• Established by the 2002 Farm Bill.
7%
• As of July 13, 2007, 72 loans have been
made for approximately $1.25 billion to
finance facilities in 40 states.
3%
11%
26%
– Projects proposing to serve more than
582,000 households
– 1,263 communities
53%
Completed
In Progress
Not Started
Rescinded
Defaults
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Broadband Loans…
Statistics
203 Applications Received
Totaling $4,430,000,000
Applications Processed as of July13, 2007
72 Approved
21 In Review
110 Returned
$1,250,000,000
$ 963,000,000
$2,217,000,000
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Broadband Loan Program: Status and
Results
• Unserved and Underserved Communities
– Approximately 40% of the communities approved for
funding were unserved at the time of loan approval.
– An additional 15% had only one provider at the time of
loan approval
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Broadband Loan Program: Technology Neutral
TECHNOLOGIES APPROVED
1%
36%
20%
Broadband Over Power
Line (BPL)
DSL
Fixed Wireless
18%
25%
Hybrid/Fiber Coax
Fiber to the Home
As of 7/13/2007
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The Cost to Deploy Broadband
Least Expensive: Unlicensed Wireless
Most Expensive: FFTH
On average, when considering all the technologies
funded (community populations ranging from 200 –
19,000):


$2,150 per Household Served
$990,000 per Community Served
(based on estimates not actual costs)
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Broadband Loan Program: Technology Neutral
TECHNOLOGIES PENDING
Broadband Over Power
Line (BPL)
DSL
5%
0%
43%
38%
14%
Fixed Wireless (1/2
Licensed)
Hybrid/Fiber Coax
Fiber to the Home
As of 7/13/2007
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Broadband Loan Program: Types of Organizations
Funded
7%
One Size Does Not Fit All…
1% 3%
•Private/public partnerships
•Traditional telephone companies
enhancing service offerings
38%
Municpalies
51%
Corporations
LLC's
Cooperatives
Tribal Authority
•Local service providers serving
one or a few local communities
•National service providers
providing service to multiple
communities, even multiple states
•Municipalities
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Broadband…
Direct Cost-of-Money Rates
Amortization period from 5 – 20 years based on
useful economic life of facilities funded.
Interest Rate (%)
6%
4.98%
5.02%
5.09%
5.26%
5%
4%
3%
2%
As of July 12, 2007
1%
0%
5-yr
7-yr
10-yr
20-yr
Loan Term
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Definition of Broadband
Currently
In the Future
200 kilobits per second
both upstream and
downstream
1 Megabits???????
5 Megabits???????
50 Megabits??????
or even
100 Megabits?????
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Raising the Speed for Rural America:
• Overall cost of broadband system may
increase.
• Backbone requirements go up.
• Cost to consumer probably goes up.
• Certain technologies may no longer have
the capability to deliver broadband service.
• The outliers may not get this service.
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Broadband Service Offerings
• Wireless: 128K/128K: 512K/256K: 2M/1.5M 4M/2M
• HFC: 256K/256K: 3M/128K: 1.5M/384K: 2M/512K:
4.5M/640K
• FTTH: 512K/256K: 3M/768K: 2M/1M: 10M/10M
• BPL: 256K/256K: 1M/1M: 3M/3M (only 1 application)
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Rural Broadband Access Loan and
Loan Guarantee Program
• Proposed Rule published.
• Comment period has ended.
• 32 comments received.
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Who submitted Comments?
http://www.usda.gov/rus/telecom/1738-onlinefilings.htm
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American Cable Ass.
CTIA
NRECA
NRTC
NCTA
NTCA
USTA
Vermont Dept. of Public Service
Nextwave Wireless
Rural Telephone Service Co.
Suddenlink
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OPASTCO
QWEST
Mediacom
IA Telecom Service
US Chamber of Commerce
MidState Consultants
Nextwave Wireless
PCIA
WTA
North American Equipment
Dealers
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Broadband Success
Air Advantage, LLC:
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Community Connect Grants:
2003: Unionville, Michigan (Pop. 605) $214,532
2003: Port Hope, Michigan (Pop. 310) $219,176
Broadband Loans:
2004: 43 communities, $1,500,000
2005: 12 communities, $1,028,000
2007: Pending application to handle addition customers, $1,000,000
Exciting Fact: Today they are serving 55 mid-Michigan communities and
providing service to 3,500 rural Michigan customers with a wireless system
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Rural America
Let’s not forget the most Rural
Americans and let’s strive to get all
Americans Affordable, Dependable,
and Quality Broadband Service.
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Rural Development Utilities Programs
Kenneth Kuchno
Director, Broadband Division
Telecommunications Program
[email protected]
(202) 690-4673
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