Broadband Stimulus Applications Due by Aug. 14, 2009

As part of the American Recovery and Reinvestment Act of 2009 (ARRA), Congress allocated $7.2 billion to provide broadband services to rural, underserved, and unserved areas. Under the ARRA, the National Telecommunications and Information Administration (NTIA) was allocated approximately $4.7 billion to its Broadband Technologies Opportunity Program (BTOP), which has several grant programs to support infrastructure deployment in underserved and unserved areas, public computer centers and other sustainable broadband initiatives.

The Rural Utilities Service (RUS) was allocated $2.5 billion under ARRA to foster deployment of broadband into rural areas through a combination of grants and loans.

On July 1, 2009, NTIA and RUS issued a joint Notice of Funds Availability (NOFA) and solicitation of applications pursuant to the ARRA.  Eligible entities for this funding include state and local governments, the District of Columbia, Indian tribes, non-profit entities, for-profit corporations, limited liability companies and cooperative or mutual organizations.  Further, the agencies have released the application forms for parties wishing to apply for funding.  Both programs allow applicants to set their own service areas based on contiguous census blocks.

BTOP is funded at $4.7 billion to provide grants to support the deployment of broadband infrastructure in unserved and underserved areas of the country, to enhance broadband capacity at public computer centers, and to encourage sustainable adoption of broadband service.

BTOP defines “unserved areas” as an area, composed of one or more contiguous census blocks where at least 90 percent of households in the proposed funded service area lack access to facilities based, terrestrial broadband service, either fixed or mobile, at the minimum broadband speed.

Under BTOP, “underserved areas” are defined in part by the type of project that an applicant is proposing for funding, either as Last Mile Projects, which provide service to end users directly, or Middle Mile Projects that provide services that does not predominantly provide broadband services to end users or end user devices such as interoffice transport, backhaul, Internet connectivity, or special access.

For Last Mile Projects, the term “underserved area” is an area composed of one or more contiguous census blocks where at least one of the following criteria is met: 1) no more than 50 percent of households in the proposed funded service area have access to facilities based, terrestrial broadband service at greater than the minimum broadband speed; 2) no fixed or mobile broadband service provider advertises broadband speeds of at least 3 Mbps downstream in the proposed funded service area; or 3) the rate of broadband subscribership for the proposed service area is 40 percent of households or less.

For Middle Mile Projects, an “underserved area” is composed of one or more contiguous census blocks where one interconnection point terminates in a census block area(s) that qualifies as unserved or underserved for Last Mile Projects.

The Sustainable Broadband Adoption category will fund innovative projects that promote broadband demand, including projects focused on broadband education, awareness, training, access, equipment or support, particularly among vulnerable populations.

Finally, the Public Computer Center category will fund projects that expand computer center capacity entities that permit the public to use these computer centers, such as community colleges and public libraries.

Under BTOP, applicants must provide at least 20 percent of the total funding of the project, through cash or in-kind contributions, subject to Office of Management and Budget guidelines.  Additionally, applicants must: (1) submit a complete application and all supporting documents; (2) demonstrate the project can be substantially completed within two years of the grant issuance date and fully completed within three years of the grant issuance date; (3) advance one or more of BTOP’s five statutory purposes; (4) document that the project would not be implemented during the grant period but for a federal grant; and (5) demonstrate that the budget is reasonable.

RUS is authorized to provide $2.5 billion in loans, grants and loan/grant combinations to expand broadband access in rural areas under BIP.  The ARRA requires that 75 percent of a BIP-funded area be in a rural area that “lacks sufficient access to high speed broadband service to facilitate rural economic development.”

Further, the ARRA mandates that priority be given to projects which: (1) give end users a choice of providers; (2) serve the highest proportion of rural residents that lack access to broadband service; (3) are projects of current or former RUS borrowers (Title II borrowers); and (4) are fully funded and ready to start once funding is received. BIP application scoring criteria awards projects that implement these priorities.

Applications that encompass these rural service areas are subject to review by RUS for BIP prior to consideration for BTOP funding.  If RUS rejects an application for BIP that would also fall into one of the allowable categories for BTOP funding, RUS will arrange for the application to be reviewed by NTIA in the same funding cycle. 

RUS plans to provide approximately $2 billion in grants and the remainder in loans.  However, RUS has said that it will give additional scoring to applicants that seek more loan monies in proportion to grant monies, in order to maximize the amount of funding that is available under BIP.  Applicants may seek funding for 100 percent loan funding of the project, and may apply for both BIP and BTOP funding for different aspects of the project in the same application.

NTIA and RUS have released joint application forms and grant guidelines to assist applicants in preparing their applications for funding.  The agencies are strongly encouraging partnerships and collaboration between companies on applications and projects for funding. 

As part of the NOFA, the agencies have provided the criteria for awarding the grants, including an objective scoring system for each application.  Further, NTIA and RUS are holding workshops between July 7 and 24, 2009 at various sites around the country.

At the first of these in Washington, DC on July 7, NTIA and RUS confirmed that there would be three rounds of funding, the first commencing on July 14, 2009.  Applications for the first round of funding must be filed by August 14, 2009 at 5 PM Eastern Time. 

An electronic filing portal will be available starting July 31.  It is expected that the approvals for funding in the first round will be completed in the first week of November.  The second round of applications will be due in late 2009, and the third round of applications will be due in the spring of 2010.

Applications will be reviewed in two phases.  Initial review of the applications will be made by three independent evaluators who will score the application against the objective criteria as outlined in the NOFA.  The scores by the evaluators will be averaged and the highest rated applications will proceed to the second phase, which consists of due diligence and is expected to commence approximately one month after the deadline for applications. 

The agencies will review and score the supplemental information provided in the second phase against the information provided in the first phase to ensure consistency between the application and the supplemental documentation.  State governmental entities will have the opportunity to comment on applications during the second phase.

As a prerequisite to filing an application, parties are required file a Central Contractor Registration (CCR).  The CCR is the primary database used by the federal government to store, collect, validate, and disseminate data in support of agency acquisition missions, including federal assistance awards, like those outlined in the NOFA.

Parties that are considering applying for these programs are strongly encouraged to carefully review the NOFA, the application and the grant guidelines.  This alert is meant as an overview of funding available, and does not include particular of the funding criteria.

For more information about these funding opportunities, please contact:
Ross A. Buntrock
canis.jonathan@arentfox.com
202.775.5738
Michael B. Hazzard
rummel.jeffrey@arentfox.com
202.715.8479
Katherine Barker Marshall