On Friday, Feb. 13, the U.S. Senate and House of Representatives passed the final version of a $787 billion economic stimulus package, the “American Recovery and Reinvestment Act of 2009.” The president signed the Act into law today, Feb. 17.
Among myriad other provisions, the new Act provides $7.2 billion for the expansion of broadband facilities and services: $4.7 billion to be dispensed by the Commerce Department's National Telecommunications and Information Administration (NTIA), mostly for broadband construction grants (and up to $350 million for development of nationwide mapping of broadband facilities); and $2.5 billion to be dispensed by the Department of Agriculture's Rural Utilities Service (RUS) in grants, loans and loan guarantees.
To prevent duplication and overlap in disbursements, no part of any such RUS-funded project may also receive funding under the NTIA program. Grants will be conditioned on adherence to NTIA “non-discrimination and network interconnection requirements” which will include “at a minimum” adherence to the four principles of Internet openness adopted by the FCC in 2005.
Among significant changes in the final Act from previously reported versions, there is far less emphasis on broadband facilities targeted to “unserved” or “underserved” areas; there are no requirements of specific high-speed thresholds for services; federal funding is limited to 80 percent of a project, unless a specific waiver is granted; and there are no broadband tax credit provisions.
Highlights of NTIA "Broadband Technology Opportunities Program" (BTOP)
- Purposes. The program is intended to:
- provide improved broadband access to consumers in unserved and underserved areas (but the final House-Senate Conference Report clarifies congressional intent that “NTIA award grants serving all parts of the country, including rural, suburban and urban areas”);
- "provide broadband education, awareness, training, access, equipment and support" to, among others, "schools, libraries, medical and healthcare providers, community colleges and other institutions of higher education, and other … entities to facilitate greater use of broadband service by or through these organizations";
- improve broadband access to low-income, unemployed, aged and other “vulnerable” populations, and to public safety agencies; and
- "stimulate the demand for broadband, economic growth, and job creation."
- State role. NTIA is to "consult a State ... with respect to ... the allocation of grant funds within that state for projects in or affecting the State." (The Conference Report makes clear that states will play a major role, especially given the states' access to resources and familiarity with local economic, demographic and market conditions that could contribute to the success of the program).
- Eligible applicants. These include states and municipalities; nonprofit foundations, corporations, institutions and associations; and "any other entity, including a broadband service or infrastructure provider" that NTIA "finds by rule to be in the public interest." To the extent practicable, NTIA shall establish eligibility rules that are “technologically neutral.”
- Open access. NTIA (with FCC coordination) will establish “non-discrimination and network interconnection requirements” as conditions of grants, including “at a minimum” adherence to the four principles of Internet openness adopted by the FCC in 2005. These will be published with NTIA's request for grant proposals.
- Other criteria. NTIA shall "to the extent practical" award at least one project in each state, and "consider" whether an application will "increase affordability and subscribership" of service, "provide the greatest broadband speed possible" and "enhance service for health care delivery, education, or children" to "the greatest population of users in the area"; and whether the applicant is a “socially and economically disadvantaged small business" under the Small Business Act.
- Process deadlines. NTIA must implement the program as quickly as possible, and award all grants by Sept. 30, 2010. Applicants must submit detailed applications per specifications of a request for proposals to be issued by NTIA, demonstrating competence and capabilities, and showing that "the project would not have been implemented during the grant period without Federal grant assistance"; and disclosing any other federal or state funding sources. Grantees must ensure that their projects will be "substantially complete" within two years after award.
- Federal share. The federal share of any project may not exceed 80 percent, unless NTIA grants a waiver based on the applicant's financial need.
- Types of grants. NTIA is authorized to make grants to:
- acquire equipment, instrumentation, networking capability, hardware and software, digital network technology, and infrastructure for broadband services;
- construct and deploy broadband service related infrastructure;
- ensure access to broadband by “community anchor institutions";
- facilitate broadband access by low income, unemployed, aged and other “vulnerable” groups;
- construct and deploy broadband to improve public safety broadband communications; and
- "such other projects and activities" as NTIA finds consistent with the purposes of the program.
- Transparency. Grantees will have to report quarterly to NTIA, and such reports will be publicly available online; NTIA may establish other reporting/compliance requirements; and it may rescind grants for "insufficient performance."
- “National Broadband Plan.” The FCC is to develop and submit to Congress a “National Broadband Plan” within one year, with benchmarks for providing broadband access to all and utilization plans.
- Broadband mapping. NTIA must develop broadband mapping for public availability within two years.
Highlights of Department of Agriculture Rural Utilities Service (RUS) grants and loans
- Seventy-five percent of the area to be served by each RUS-funded project must be "in a rural area without sufficient access to high speed broadband service to facilitate rural economic development" (as determined by the secretary of agriculture).
- Priority for awards will be given to applications from borrowers or former borrowers under Title II of the Rural Electrification Act (a traditional telephone loan program for small and mid-sized rural local exchange carriers (RLECs)).
- Priority will be given to projects for “broadband systems that will deliver end users a choice of more than one service provider.”
- Priority will also be given to “projects that provide service to the highest proportion of rural residents that do not have access to broadband service.”
- As noted above, no part of any RUS-funded project may also receive funding under the NTIA program.
It is certain that the NTIA, RUS and the states will immediately begin to implement these programs, and that prospective applicants will be called upon to submit their detailed proposals within a very short period of time. For further information or assistance in applying and grant-writing with respect to these programs, please contact one of the related DWT attorneys.