On December 14, 2018, the Department of Agriculture (“the Agency”) published in the Federal Register the Rural Utilities Service’s (“RUS”) notice of general policy and application procedures (“the Notice”) for funding under the broadband pilot program established under the Consolidated Appropriations Act 2018 (“the Act”), which provides loans, grants, and loan/grant combinations to facilitate broadband deployment in rural areas. The Agency has been appropriated approximately $560,000,000 for funding opportunities, and awards made under this program will bring high speed broadband to farms and increase productivity. Below, please find a description of the various funding opportunities and anticipated deadlines associated with this funding.

Funding Opportunities

Under the Act, Congress established the Rural eConnectivity Pilot Program (“ReConnect Program”), designed to expand broadband service to rural areas without sufficient access to broadband (defined as 10 Mbps/1 Mbps speed). To accomplish this, Congress provided RUS with $600 million and expanded its existing authority to make loans and grants. RUS will offer funding opportunities in three categories:

  • 100% Loan: The 100% loan interest rate will be set at a fixed 2% for areas where 90% of the households do not have sufficient access to broadband. Applicants must propose to build a network that is capable of providing service to every premise in the proposed funded service area at a speed of 25 Mbps/3 Mbps. Applications are anticipated to be accepted on a rolling basis ending June 28, 2019, on a first-come, first-served basis for applications received for the same area.
    • Up to $200,000,000 is available for loans, and the maximum amount that can be requested is $50,000,000.
  • 50% Loan/50% Grant Combination: The 50/50 interest rate will be set at the Treasury rate for the remaining amortization period at the time of each advance of funds for areas where 90% of households do not have sufficient access to broadband. Applicants must propose to build a network that is capable of providing service to every premise in the proposed funded service area at a speed of 25 Mbps/3 Mbps. Applicants may propose substituting cash for the loan component at the time of application, and applications are anticipated to be accepted ending May 29, 2019.
    • Up to $200,000,000 is available for loan/grant combinations. The maximum amount that can be requested in an application is $25,000,000 for the loan and $25,000,000 for the grant – these amounts will always be equal.
  • 100% Grant: Applicants for a 100% grant must be in a service area where 100% of the households do not have sufficient access to broadband, and must propose to build a network capable of providing service to every premise in the proposed area at a speed of 25 Mbps/3 Mbps. Applicants must also provide a matching contribution equal to 25% of the cost of the overall project, which can only be used for eligible purposes. Applications are anticipated to be accepted ending April 29, 2019. All eligible applications will be scored and overlapping applications with the highest score will receive an award offer until all funds are expended.
    • Up to $200,000,000 is available for grants, and the maximum amount that can be requested is $25,000,000.
  • Additional budget authority is available for a reserve, which may be used for these loans or grants, or may be included in additional loans or grants.

Funding Eligibility

To receive an award, applicants must submit and meet all of the following eligibility requirements:

  • Audited Financial Statement: Applicants must submit unqualified, audited financial statements for the two previous years from the date the application is submitted.
  • Fully Completed Application: An application must be complete with all required supporting documentation (as detailed in the Notice).
  • Timely Buildout Completion: A project is eligible only if the application demonstrates that the project can be completely built out within five years from the date funds are first made available.
  • Technical Feasibility: Only projects that RUS determines to be technically feasible will be eligible for an award – applicants will be required to submit a network design, network diagram, project costs, and a buildout timeline, all certified by an engineer.
  • Service Areas:
    • Eligible Service Areas – Applicants must propose to provide broadband service directly to the premises in the proposed funded service area that do not have sufficient access to broadband. RUS has discretion to request that applicants modify the application if part(s) of the application is ineligible, or to reject the application.
    • Ineligible Service Areas – RUS will not fund more than one project that services any one given geographic area. Certain areas already receiving RUS loans may be ineligible, as areas already receiving grants may be required to provide additional information or be subject to grant limitations. Additional information on ineligible service areas can be found in the Notice.
  • Applications also require showings of funding documentation; financial feasibility and sustainability; service requirements; and application transparency.

The Notice also outlines the evaluation criteria for each funding opportunity, awarding specific point measures to aspects of the proposed areas (i.e., rurality, farms served, businesses and healthcare centers, etc.). The Agency will subsequently publish a public notice for each application, evaluate the applications and send subsequent award notices.

The Agency will finalize the application window by notice in the Federal Register and on grants.gov on February 22, 2019. The three funding categories will each have a different application window and application deadline. Applications must be submitted through the RUS Online Application system at http://reconnect.usda.gov, which also contains detailed application information and guidelines.

Additionally, the Agency is seeking comments on this Notice and related information collection, specifically on whether the collection is necessary and practical, the accuracy of calculated burdens, ways to enhance the information collection, and ways to minimize associated burdens. The Agency estimates a total of 2000 respondents for this information collection, and further submits that each response will take an estimated average of 6.77 hours, with 34.96 responses being provided per respondent. Comments are due February 12, 2019.

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