Friday, October 8, 2010

USDA Works to Open New Broadband Funding Effort as Stimulus Round Ends

Adelstein Gives Final Stimulus Count at 320 Awards for $3.529 billion, Pitches $1 Billion for Telecom in Farm Bill 10/08/2010 San Francisco - Last Thursday Round 2 broadband stimulus applicants not yet receiving word of their possible funding awards waited in their offices across the nation, each with some level of anxiety. They wanted to know if the U.S. Department of Agriculture would smile on their applications for grants and loans - the very last to be issued under the federal program. In Atlanta on the same day at a USDA seminar, the proverbial smart money had no such anxiety. 

Administrator Jonathan S. Adelstein,
Rural Utilities Service, USDA
Service providers to rural America that had successfully navigated stimulus funding challenges attended the invitation-only event in Atlanta, award documents in-hand. These providers, while busy with the details of award compliance, disbursement, and reporting,  were looking for hints on how and when USDA will launch new rural telecom loans from Farm Bill appropriations.

Thursday September 30 marked the last day under federal law which the 2 agencies administering the Obama Administration's $7.2 billion broadband stimulus program had to award grants and loans to applicants planning to bring broadband infrastructure and adoption programs to under- and unserved areas of the nation. USDA's Rural Utilities Service (RUS) announced 4 final awards totaling $18.280 million Thursday, bringing the award cycle of the program to a close.

Attendees at the Atlanta workshop for Round 2 recipients reported that the sessions were far better organized than previous efforts held for Round 1 awards. "The RUS presentation how to run the loan/grant program was much more detailed, clear and concise this week in Atlanta, than the workshop for Round 1 award winners held in Dallas," said Liz Zucco of MarketSys USA based in Canton, GA.

"The agency gave easy to understand instructions about how to manage award winners' loans and grants. In addition, having attended a number of one-on-one sessions with RUS General Field Representatives, I can assure you that the program will be well articulated and well-managed with as little stress on winners as possible," concluded Zucco, who supports federal grant winners.

RUS Chief Gives Final Numbers, Points to $1 Billion in Rural Telecom Support
The following day in a speech to city telecom regulators, Jonathan S. Adelstein, Administrator of the USDA's Rural Utilities Service (RUS), officially declared the broadband stimulus award rounds over, and corrected the final tally of RUS stimulus grants issued the previous day. As if in response to the most prescient questions from the stimulus awardees gathered in Atlanta earlier in the week, he outlined the new federal funding opportunities his agency is now working to launch.

As he addressed the National Association of Telecommunications Officers and Advisors (NATOA), the group representing mostly city based local telecom regulators and municipal broadband advocates, Adelstein gave a final figure for the total funds awarded by his agency in the program. "To be exact," he stated "I'm pleased to report that RUS has made 320 awards for $3.529 billion." That figure was a slight "true up" accounting for all awards made, given that USDA had issued a statement that the previous day that 307 projects at $3.6 billion had been awarded.

Key to the understanding the impact of the broadband stimulus program to the telecom sector is an issue we have reported on repeatedly in the past: loan leverage. "And by leveraging our funding," said Adelstein to the NATOA audience, "to provide loans as well as grants, we've been able to stretch our $2.5 billion appropriation from Congress to over $3.5 billion dollars."

With stimulus funds now awarded, and disbursements slowly rolling into the field, attention now turns to Farm Bill appropriations for continued capital investment assistance for rural telecom. "We at RUS will continue to use our existing telecommunications and broadband loan programs - over $ 1 billion a year in loans and grants - to finance more broadband projects." 

As we reported last Thursday, telecom executives like Bill Wallace of Digital Bridge Corporation, a RUS stimulus winner in both funding rounds, are already tracking moves in Congress and USDA which will continue and expand rural broadband funding. 

At the Atlanta workshop, Ms. Zucco, the federal grant consultant specialized in rural telecom, spoke with one of Adelstein's key deputies who will mange the programs going forward. "This is going to be an important program and according to Program Director Ken Kuchno at RUS, the new application guide for the traditional Broadband Loan program should be available towards the end of the year." 
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