Think You Qualify for Broadband Stimulus Funds?

Lots of companies and organizations believe they might be eligible to apply for funds to support broadband access services. Some of them are right. But the rules might be far-more restrictive in practice than most believe. 

NTIA funds clearly favor non-profit and governmental agencies. RUS funds clearly favor firms that have received rural electrification funds in the past. So most actual firms that supply broadband access services will not be able to apply directly.  Perhaps they can do so if they are participants in bids submitted by government or non-project agencies. 

But it appears lots of firms will spend significant time, and some money, to learn that they don't actually have much of a chance to submit bids that meet the program guidelines very well. 

Section 6001 of the American Recovery and Reinvestment Act of 2009 requires the National Telecommunications and Information Administration (NTIA) to establish the Broadband Technology Opportunities Program, responsible for disbursing some $7 billion or so for broadband projects of various sorts. The Act further establishes authority for the Rural Utilities Service (RUS) to make grants and loans for the deployment and construction of broadband systems. 

NTIA will be disbursing about $4.7 billion while RUS will award some $2.5 billion. Applicants have been told they may apply for awards under both programs, but will receive awards from only one, should their proposals be accepted. But there is a dramatic difference between the two sets of programs. 

Despite the exhortations to craft applications that apply under either set of program rules--rules that remain maddeningly vague--the NTIA and RUS programs are quite different in intent. 

RUS is supposed to award grants, make loans and offer loan guarantees for broadband infrastructure in any area of the United States where at least 75 percent of the area to be served by a project is a rural area without sufficient access to high speed "broadband service to facilitate rural economic development." The emphasis for RUS funds clearly leans toward infrastructure deployment.

The NTIA program, in contrast, clearly is aimed at "new programs," not infrastructure, with a clear "non-profit" organization focus. In fact it remains unclear whether "for profit" entities will be allowed to submit applications, except for  "economically or socially disadvantaged small businesses as defined in section 8(a) of the Small Business Act."

NTIA has to give some preference to projects supported by local authorities, especially state agencies. But it also has to give preference to public safety applications; health care providers, clinics, and facilities; schools and libraries; colleges, universities, or other higher education and research institutions; job training and job-creating facilities and community support organizations. 

NTIA also is bound by statute to give preference to projects that increase broadband access to low-income, unemployed, aged, and other disadvantaged or "vulnerable" populations.

But NTIA also is directed to favor projects that provide educational or employment opportunities using broadband access/deployment/infrastructure; that stimulate demand for broadband and economic growth; and that are submitted by nonprofit organizations (for-profit firms can partner with such entities).

Projects must show that they would not be undertaken but for the grant. But such projects also should show how they increase affordability of, or subscribership to, broadband to the greatest populations.

Projects that offer high broadband speeds also will be favored, as well as projects that enhance healthcare, or serve education or children. The one area where commercial interests are allowed to bid, by statute, are "economically or socially disadvantaged small businesses as defined in section 8(a) of the Small Business Act."

Projects that feature the greatest "open access" to users might also be favored. 

That's an awful messy set of priorities, with an awful lot of constituencies to satisfy, with no immediate indication how a commercial service provider might apply, except as a partner of a non-proift. 

The RUS program rules give priority for awarding funds in ways "that will deliver end users a choice of more than one service

provider." So far, there is no language that clarifies what that means, but it might mean higher priority for projects that have a substantial "wholesale access" component. 

The RUS program also favors projects submitted by "borrowers or former borrowers under title II of the Rural Electrification Act of 1936 and for project applications that include such borrowers or former borrowers." In practice, that means the inside track is held by firms now receiving, or who have received in the past, funds. 

Much remains to be decided, so perhaps the finalized rules will open the doors a bit for most companies that actually sell broadband access to customers. Right now, that isn't the case.