RURAL DEVELOPMENTTelecommunications Programs

Schools, Health & Libraries Broadband Coalition Conference

May 2, 2013

Mary M. CampanolaSpecial Projects Coordinator

202-720-8822mary.campanola@wdc.usda.gov

The Telecommunications Program

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Telecommunications ProgramHistory

• In the 1930’s, the Rural Electrification Administration (REA) made financing available for electric cooperatives and other entities to bring electricity to rural communities that might otherwise not receive it• In 1949, the REA received authority to finance telephone

service in recognition of its importance to rural communities• Funding was provided for basic telephone service to ensure

that rural residents and businesses received the same type of services as urban areas• Starting in 1995, all telecommunications networks financed

were required to be broadband-capable.

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Seventy Seven Year History serving rural America

• RUS is a rural policy, planning and lending agency which provides loan and grant financing to electric, telecommunications, broadband, water and sewer utilities serving rural Americans.

• Celebrating 77 years since the creation of the Rural Electrification Administration and 78 years since the signing of the Rural Electrification Act.

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Telecommunications Program Loan and Grant Programs• Telecommunications Infrastructure Loan Program: Loans to

improve and build telecommunications service in rural communities (<5,000 population) Newly expanded funding for E911 Service

• Rural Broadband Loan Program (Farm Bill): Loans to build and upgrade broadband services in rural high cost areas (<20,000 population)

• Community Connect Grant Program: Grants for broadband service providers and others who offer broadband services in rural and remote areas (<20,000 population)

• Distance Learning/Telemedicine Loan and Grant Program: Loans and grants for providing Distance Learning and Telemedicine services to rural residents and anchor institutions

• Public TV Grants: grants for rural public TV stations for the digital TV transition

More than $22 billion invested in rural America since 1949

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Telecommunications ProgramOrganization

• Telecommunications Program Staff:– National Office staff:• Leadership• Loan and business specialists • Electronics engineers

– Field staff - General Field Representatives (GFRs)• Rural Development State Office Staff:– Broadband Coordinators in RD state offices

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USDA Rural Development Rural Utilities ServiceTelecommunications Program Organization

RUS Acting AdministratorJohn Padalino

Acting Assistant Administrator

Jonathan Claffey

Director, Broadband Division

Ken Kuchno

Broadband GFRs, BIP GFRs

Director, Northern Division

Peter Aimable

Northern GFRs

Director, Southern Division

Shawn Arner

Southern GFRs

Director, Advanced Services Division

Norberto Esteves (Acting)

Program AdvisorRichard Anderson (Acting)

Deputy Assistant Administrator

Jonathan Claffey

Deputy AdministratorJessica Zufolo

FY 2012 Results and FY 2013 CR

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RUS Telecommunications Program

*Available funding includes authorized budget and amounts carried over from previous fiscal year

Program level Funding ($ millions)

2012 Budget 2012 Available

Funding* 2012

Obligations 2013 Continuing

Resolution

Infrastructure Loans $690.0 $690.0 $79.7 $690.0

Broadband Loans $169.0 $736.0 $68.9 $39.0

Distance Learning and Telemedicine Grants $15.0 $16.1 $15.6 $17.6

Community Connect Grants $10.4 $14.2 $5.5 $9.6

Broadband Investment in Rural Areas

• Current Telecom Program Loan Portfolio: $4.6 billion (as of April 2013)• Approximately $4.1 billion principal outstanding for

Telecom Infrastructure Loan and Farm Bill Broadband Loan Program borrowers

• Approximately $.575 billion principal outstanding for loans under the Broadband Initiatives Program (American Recovery and Reinvestment Act of 2009)

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RUS Telecom Program FY 2013 Submission Dates

• Loan Programs - Telecom Infrastructure Loan Program and Farm Bill Broadband Loan Program:• RUS accepts applications for the loan programs on a continual basis;

there is no application deadline.

• Grant Programs - Distance Learning and Telemedicine Grant Program and Community Connect Grant Program:• Funding availability is usually announced in the Spring, with a 60-day

application window• Application windows for FY2013 have not yet been announced

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• A nationally competitive grant program to provide broadband service to the most rural and economically challenged communities

• Since inception, the program has provided 229 grants and invested $122 million

• Rural Areas and Communities of 20,000 population or less• RUS published a proposed rule in the Federal Register on November 16,

2012, which proposed a number of changes to the current regulation.• Final Rule is in the process of being published.• Grantees must provide 15% matching

• Information is available on the website at: http://www.rurdev.usda.gov/utp_commconnect.html

The Community Connect Grant Program

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The Community Connect Grant ProgramEligible Applicants

• Corporations• Limited Liability Companies• Cooperative or Mutual Organizations• Indian Tribes• Public Body

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The Community Connect Grant ProgramDefinitions

The Community Connect regulation contains the definitions of the following terms, which will be included in the Notice of Funding Availability announcing the grant program:

• Broadband Service: minimum rate of data transmission described in the NOFA to determine eligibility of the Proposed Funded Service Area

• Broadband Grant Speed: the minimum bandwidth described in the NOFA that an applicant must propose to deliver

• Proposed Funded Service Area (PFSA): the geographic area within an eligible Rural Areas or eligible Rural Areas, in which the applicant proposes to provide service

• Rural Area: means any area, as confirmed by the latest decennial census of the Bureau of the Census, which is not located within:

• A city, town, or incorporate area that has a population of greater than 20,000 inhabitants; or

• An urbanized area contiguous and adjacent to a city or town that has a population of greater than 50,000 inhabitants. For purposes of the definition of rural area, an urbanized area means a densely populated territory as defined in the latest decennial census of the U.S. Census Bureau.

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The Community Connect Grant Program Eligible Community Connect Grant Project

To be eligible for a Community Connect competitive grant, the Project must:– Serve a PFSA in which Broadband Service does not currently exist;– Offer service at the Broadband Grant Speed to all residential and

business customers within the PFSA; – Offer free service at the Broadband Grant Speed to all Critical

Community Facilities located within the PFSA for at least 2 years starting from the time service becomes available to each Critical Community Facility;

– Provide a Community Center with at least 2 Computer Access Points and wireless access at the Broadband Grant Speed, free of all charges to all users for at least 2 years.

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The Community Connect Grant ProgramEligible Grant Purposes

Grant funds may be used to finance:• The construction, acquisition, or leasing of facilities, including

spectrum, land or buildings, used to deploy service at the Broadband Grant Speed to all residential and business customers located with the Proposed Funded Service Area and all participating Critical Community Facilities, including funding for up to ten Computer Access Points to be used in the Community Center.

• The improvement, expansion, construction, or acquisition of a Community Center and provision of Computer Access Points.

• The cost of providing the necessary bandwidth for service free of charge to the Critical Community Facilities for 2 years.

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The Community Connect Grant ProgramScoring

There are 100 possible points:• An analysis of the challenges of the following criteria, laid out on a community-wide basis, and how the Project

proposes to address these issues (up to 50 points)– The economic characteristics;– Educational challenges;– Health care needs; and– Public safety issues;

• The extent of the Project’s planning, development, and support by local residents, institutions, and Critical Community Facilities (up to 40 points);

• The level of experience and past success of operating broadband systems for the management team (up to 10 points).

• The RUS Administrator may take into consideration the characteristics of the PFSA, provided by the applicant in the application, such as:– Persistent poverty counties that will be served within the PFSA;– Out-migration Communities that will be served within the PFSA:– The rurality of the PFSA;– The speed of service provided by the Project;– Community members with disabilities that will be served within the PFSA; and– Any other additional factors that may be outlined in the NOFA. 16

The Distance Learning and Telemedicine (DLT) Grant Program

Definitions and Purpose

• DLT Grants are not just a way to obtain educational technology or medical equipment. The focus is on using the unique capabilities of telecommunications to connect rural areas to each other and to the world, thus overcoming the effects of remoteness and low population density.

Distance learning means a curriculum delivered via telecommunications and stresses the connection of students and teachers at remote sites.

Telemedicine means the delivery of health care from medical professionals at one site to patients at other sites via telecommunications. Telemedicine shows benefit to rural residents either in reduced travel or access to services.

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DLT Grant Program Eligible Applicants

• Corporation or a partnership; tribal nation or organization a state or local unit of government; a consortium; or other legal entity. For or not-for profit able to contract with the US Government.

• Operate a rural community facility or deliver DLT services to entities that operate a rural community facility or to residents of rural areas at rates calculated to ensure that the benefit of the financial assistance passes through to such entities or to residents of rural areas.

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The DLT Grant ProgramEligible Equipment

• This list is not exhaustive and does not convey automatic eligibility. To be eligible in full, items must be primarily for DLT eligible purposes.– Audio and video equipment– Computer hardware and software– Computer network components– Terminal equipment– Data terminal equipment– Interactive audio/video equipment– OEM or OEM-authorized warranties on eligible equipment up to

the 3-year life of the grant– Inside wiring

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The DLT Grant Program• Grant funds cannot be used to purchase:

• Salaries and benefits

• Administrative expenses (overhead)

• Telecommunications transmission equipment

• Recurring costs, including telecommunications

• Medical equipment

• Equipment owned by telecom provider (LECs, CLECs, etc.)

• Duplication of facilities

• Costs incurred before the application deadline

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The DLT Grant Program Scoring

• Scoring: 220 Points possible in 8 scoring categories:

1. Rurality (population density) – 45 points

2. National School Lunch Program (economic need) – 35 points

3. Leveraging (matching funds) – 35 points

4. USDA-designated Empowerment Zones – 10 points

5. Additional National School Lunch Program – 10 points

6. Need for Services and Project Benefits – 45 points

7. Innovativeness – 15 points

8. Cost Effectiveness – 35 points

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The DLT Grant ProgramTypical Projects

• Video-conferencing is the most common for distance learning

• Telemedicine:

• Visiting nurse links from patient homes to health professionals elsewhere

• Tele-radiology

• Tele-dentistry

• Tele-pharmacy

• Virtual ICU

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The Telecommunications Infrastructure Loan Program

• Since 1949, the Telecommunications Infrastructure Loan Program has provided financing for new and improved telecommunications infrastructure in rural communities of 5,000 or less.

• Applications are accepted year-round.• Interest rates are set at current U.S. Treasury rates, depending on loan

maturity at the time of each advance.• Term of loan is based on life of facilities financed.• Guaranteed loans from the Federal Financing Bank (FFB) and

Hardship loans at a fixed 5% rate of interest may also be available.• All infrastructure financed must be broadband capable.

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• Rural utilities

• Municipalities

• Commercial corporations

• Limited Liability Companies

• Public Utility Districts

• Indian tribes

• Cooperative, nonprofit, limited-dividend or mutual associations

The Telecommunications InfrastructureLoan Program

Eligible Applicants

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The Telecommunications Infrastructure Loan Program

Eligible Loan Purposes

• Loan funds may be used to finance telecommunications services in rural areas for: • new construction; • improvements; • expansions; • acquisitions (with restrictions); and • refinancing (with restrictions)

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The Farm Bill Broadband Loan Program

• This program is designed to provide loans for funding, on a technology neutral basis, for the costs of construction, improvement and acquisition of facilities and equipment to provide broadband service to eligible rural communities.

• The program’s goal is to ensure that rural consumers benefit from the same quality and range of telecommunications services that are available in urban and suburban communities.

• Created under the 2002 Farm Bill and reauthorized under the 2008 Farm Bill.

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The Broadband Loan ProgramEligible Applicants

• Corporations• Limited Liability Companies• Cooperative or Mutual Organizations• Indian Tribes• Public Body

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The Broadband Loan ProgramDefinitions

Rural Area• Rural area means any area, as confirmed by the latest decennial

census by the U.S. Census Bureau, which is not located within: – A city, town, or incorporated area that has a population of

more than 20,000 people; or – An urbanized area contiguous and adjacent to a city or town

with a population of more than 50,000 people. An urbanized area means a densely populated territory as defined in the latest decennial census

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• Facilities required to provide service at the broadband lending speed

• Capital lease for facilities to provide service at the broadband lending speed (up to 3 years)

• Pre-loan expenses (up to 5% of loan amount)

The Broadband Loan Program Eligible Loan Purposes

The Broadband Loan ProgramEligible Service Area

• Service area is completely rural• 25% of household are underserved households• Less than 3 incumbent service providers• Does not overlap current RUS borrowers or

grantees• Does not overlap a pending RUS application

Substantially Underserved Trust Areas (SUTA) Provision in the 2008 Farm Bill

• The 2008 Farm Bill contained the SUTA provision that applies to the Rural Development Utilities Programs’ water, electric and telecommunications infrastructure programs.

• In Telecom, the SUTA provision applies to the Telecom Infrastructure Loan Program, the Distance Learning and Telemedicine Program and the Farm Bill Broadband Loan Program.

• The provision enables the Secretary of Agriculture to make loans as low as 2% and extended repayment terms; grant waivers of non-duplication restrictions; matching fund or credit support requirements; and highest funding priority.

Broadband Initiatives Program

• RUS received funding under the American Recovery and Reinvestment Act of 2009 (ARRA) for broadband infrastructure in rural communities (this was a one-time program). This program is the Broadband Initiatives Program (BIP).

• RUS provided loans and grants for broadband infrastructure projects as well as Technical Assistance grants.

• RUS is managing the rollout of 257 active infrastructure projects, $3.2 billion in loan/grant funds.

• The majority of BIP projects are on track with comprehensive financial and operational oversight from RUS.

• $2.6 billion of projects is completed or actively being worked. More than $1.7 billion in funds have been advanced. Only 3 projects have not drawn funds.

• 116 projects are partially operational or complete.• Field staff are monitoring progress and compliance.

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The Telecommunications ProgramSuccess Stories

• Coconino Community College in Arizona received a grant in 2011 to fund distance learning services between the college and rural locations so that students don’t have to travel from remote locations to the Flagstaff campus.

• The Warm Springs Tribe of Oregon received a Community Connect grant in 2002 to bring broadband service to parts of the reservation. In 2010, the tribe received a BIP award that will finance broadband service to other parts of the reservation and increase economic opportunity for the tribe.

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The Telecommunications ProgramSuccess Stories

• Dakota Central Communications Cooperative (Daktel) has used RUS funding to cover a 4,000 square mile region with a fiber-to-the-home broadband network that is providing the following benefits:– Several hospitals and schools are providing distance learning and telemedicine services.– The staff at Arrowwood National Wildlife Refuge use Daktel’s fiber network to track species,

report data and preserve natural resources.– The Anne Carlsen Center in Jamestown, ND are now offering services for children with

disabilities virtually over a fiber connection.– J&M Printing in Fargo, ND has expanded as a result of higher bandwidth availability.– Express Tech is a computer sales and repair business in James, ND, uses fiber to run multiple

diagnostic reports on several computers at once.– Bobcat Company, in Gwinner, ND, North Dakota’s largest manufacturer, uses Daktel’s fiber

network to link to other company locations around the world.

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http://www.rurdev.usda.gov/RUSTelecomPrograms.html

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FOR MORE INFORMATION

Stay Connected with USDA:

 

 

 

 

 

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Rural Economic Development Loan/Grant (REDL&G)

The Rural Economic Development Loan and Grant (REDLG) program provides loan and grant funds to rural projects through eligible utilities, such as rural electric cooperatives, rural telephone cooperatives and municipal utilities.

• REDLoan Program - provides loans to eligible rural utilities which they, in turn, pass through to local projects that will create or retain jobs in rural areas. The ultimate recipient repays the lending utility directly at zero percent for up to ten years.

• REDGrant Program - provides grant funds to eligible utilities to establish Revolving Loan Funds (RLF). Loans are then made from the RLF for projects that will create or retain rural jobs.

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REDL is a loan from USDA to a utility intermediary to promote rural economic development and job creation projects, including• Business expansions and start-ups• Community development projects• Business incubator projects• Project feasibility studies• Advanced telecommunications and computer networks for medical and

educational services

Maximum loan amount is $1 million, minimum is $10,000Payments may be deferred for up to two years.A 20% match is required from the utility intermediary.

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Rural Economic Development Loan and Grant ProgramR

Who is eligible for REDLG? • A current Rural Development Electric or Telecommunication Programs

Borrower serving a population of 50,000 or less.

• A utility that has borrowed and repaid or pre-paid an insured, direct, or guaranteed loan received under the Rural Electrification Act

• A utility that has been deemed eligible to receive assistance from the Rural Development Electric or Telecommunication Program

FY 2013 Funding Available• $89 million loan available

• $10 million grant available

Important People to Know

• State Directors of Rural Development• 47 State Offices and field staff ready to assist• RUS General Field Representatives• RUS Borrowers and grantees• Stakeholders and others active in the rural investment

arena (electric coops, rural water, farm bureau leaders, rural health education organizations)

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40http://www.rurdev.usda.gov/recd_map.html

Rural De

Telecommunications Program1400 Independence Ave.Washington, DC 20250

http://www.rurdev.usda.gov/RUSTelecomPrograms.html

Contact Information

Telecommunications Program Headquarters Staff:Jonathan Claffey, jon.claffey@wdc.usda.gov; Acting Assistant Administrator, 202-720-9556

Mary Campanola, mary.campanola@wdc.usda.gov; Special Projects Coordinator, 202-720-8822

Kathie Klass, kathie.klass@wdc.usda.gov; Senior Outreach Coordinator, 202-720-2284

Peter Aimable, peter.aimable@wdc.usda.gov; Director, Northern Division, 202-720-0806

Norberto Esteves, norberto.esteves@wdc.usda.gov; Acting Director, Advanced Services Division, 202-720-0699

Shawn Arner, shawn.arner@wdc.usda.gov; Director, Southern Division, 202-720-0711

Ken Kuchno, kenneth.kuchno@usda.gov; Director, Broadband Division, 202-690-4673

General Field Representatives: http://www.rurdev.usda.gov/UTP_GFRContact.html

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