Rural Development

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Rural Development Telecommunications Program
Update
Rural Development 1400 Independence
Ave. Washington, DC 20250 www.usda.gov/rus/telecom

Presenter
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Telecommunications Program

• Rural America will have access to
  affordable, reliable, advanced communications
  services to provide a healthy, safe and
  prosperous place to live and work.
• To improve health, safety, education,
  economic opportunity, and quality of life in
  rural America through leadership and investment
  in communications infrastructure and services.

Vision
Mission
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Rural Development Utilities ProgramsSupport for
Telecommunications Loan and Grant Applicants

• Strong Local Leadership in Rural Development
  State Offices
• State Directors and Office Staff work with local
  communities to identify potential projects and
  state needs.
• State Offices can be identified at
  http//www.rurdev.usda.gov/recd_map.html
• Telecom Program Staff provide Financial and
  Engineering support and guidance in all 50
  states.
• 28 General Field Representatives monitoring more
  than 1000 telecom and broadband loan and grant
  projects across the country.
• These same field representatives provide
  technical assistance to potential applicants and
  provide information to communities who are
  interested in broadband deployment.
• Identify your local field representative at
  http//www.usda.gov/rus/telecom/staff/gfr-state-li
  st.htm

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Rural Development Utilities Programs


The Rural Development Telecommunications Program
loan and grant programs

• Infrastructure Loan Program Loans to local
  telephone companies for improving
  telecommunications service in rural communities
• Broadband Access Loan Program and Community
  Connect Grant Program Loans and grants for
  local telephone companies and other service
  providers who offer Broadband (high-speed
  Internet) services in eligible communities
• Distance Learning/Telemedicine Loan and Grant
  Program Loans and grants for providing Distance
  Learning and Telemedicine services to rural
  residents

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Rural Development Telecommunications Program
More than 6 billion invested in rural telecom
infrastructure since 2001
Infrastructure Program
Distance Learning and Telemedicine

• 306 million in DLT grants and loans have been
  awarded.
• In FY 2007, 78 grants and 11 loan/grant
  combinations were awarded. 699 educational
  centers and 512 health centers have gained access
  to improved services.

• Assists the private sector in developing and
  financing the construction of telecom
  infrastructure in rural America.
• 3.7 billion in principal outstanding 550
  borrowers.
• 92 of borrowers are providing Broadband service.

Community Connect
Broadband Loan Program

• Since its inception, the program has provided
  148 grants and invested almost 70 million to
  provide service to local communities.
• Awarded 8.9 million in grants in FY 2007.

• 79 loans have been made, for 1.6 billion, for
  broadband deployment in more than 1900
  communities.
• More than 1.1 million households will receive
  broadband access under loans made.

• Weather Radio and Public TV Digital Grant
  Programs
• 51 Public TV Station Digital Transition grants
  awarded, for 38,837,400
• 93 Weather Radio Transmitter grants awarded,
  for 5,733,703

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Broadband Loans Purpose
To provide loans for the cost of construction,
improvement, and acquisition of facilities and
equipment for broadband services in eligible
rural communities.
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Broadband Loans FY 2007 Budget

• Treasury Rate Funding
• 998 Million
• (includes carryover funding from FY 2006)

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Broadband LoansStatistics

• 211 Applications Received
• Totaling 4,472,879,438
• Applications Processed as of Nov. 7, 2007
• 80 Approved 1,553,266,931
• 18 In Review 594,584,801
• 113 Returned
  2,266,010,168

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Broadband Loans Status and Results (as of
11/7/07)

• Established by the 2002 Farm Bill. 2007 Farm
  Bill reauthorization in process.
• Originally envisioned to fund 2 billion in rural
  broadband deployment by 2007.
• To date, 80 loans have been made for
  approximately 1.5 billion to finance facilities
  in 47 states.
• Projects proposing to serve more than 1.1 million
  subscribers
• 1,979 communities
• 10 projects completed in Kansas, Louisiana,
  Michigan, North Dakota, Nebraska, Oregon, South
  Dakota, Texas and Washington

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Broadband LoansTypes of Organizations Funded

• One Size Does Not Fit All
• Private/public partnerships
• Traditional telephone companies enhancing
  service offerings
• Local service providers serving one or a few
  local communities
• National service providers providing service to
  multiple communities, even multiple states
• Municipalities
• 33 of applications approved have been from
  startup companies

As of 11/72007
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Broadband LoansExamples

• Air Advantage a for-profit company which has
  worked with local Michigan communities to obtain
  grants and then applied for and received loans
• Nex-Tech a subsidiary of a Kansas local
  telephone company formed to provide Broadband
• UTOPIA a Utah municipal partnership

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Broadband LoansTypes of Technologies Funded
As of 11/7/07
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Broadband LoansEligible Entities

• Who is eligible?
• Corporations
• Limited Liability Companies
• Cooperative or Mutual Organizations
• Indian Tribes
• Public Body

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Broadband LoansIneligible Entities

• Who is not eligible?
• Individuals
• Partnerships (including LLPs)
• Any entity serving more than 2 of the telephone
  subscriber lines installed in the United States

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Broadband LoansDirect Cost-of-Money Loans
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Broadband Loans Application Information
The regulation, application, application guide,
and all other relevant information is available
on our website at www.usda.gov/rus/telecom/broa
dband.htm
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Broadband LoansApplication Information

• New Broadband Loans Search Tool
• Listing of all approved and pending communities
• http//broadbandsearch.sc.egov.usda.gov/SearchTabs
  .aspx
• This new search tool is regularly updated.

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Broadband Loans Application Submission

• Prospective applicants should contact their
  respective General Field Representative (GFR)
  prior to submitting the application
• List of the GFRs and the contact information is
  included in Application Guide
• There is no deadline to submit applications
• Applications will be reviewed and processed on a
  first-come, first-served basis

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Broadband Loans Key Components of an Application

• Credit Support
• Business Plan
• Market Survey
• Financial Information
• System Design

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7 CFR Part 1738 Rural Broadband Access Loan and
Loan Guarantee Program

• Proposed Rule Published May 11, 2007 Public
  Comments Were Due July 10, 2007
• Rural Developments Goals
• Our Proposed Rules will
• Promote deployment to rural areas with little or
  no service
• Limit funding in urban areas and areas where a
  significant share of the market is served by
  incumbent providers
• Clarify and streamline the equity and marketing
  survey requirements
• Increase the transparency of the application
  process
• Promote a better understanding of all application
  requirements
• Ensure that projects funded are keeping pace with
  increasing demand for bandwidth
• 2007 Farm Bill Will Also Impact Broadband Program

Ensure that rural residents have access to
affordable and reliable quality broadband service
in rural communities
Make sound lending decisions and to ensure
positive investment of taxpayer dollars
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What is Community Connect?

• A nationally competitive grant program to provide
  broadband service on a community-oriented
  connectivity basis to the most rural and
  economically challenged communities.
• Since its inception, the Community Connect
  program has provided 148 grants and invested
  almost 70 million to provide service to local
  communities.

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Program Basics

• Serves one Community
• Community without Broadband
• Provides a Community Center
• Free service to Critical Facilities

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New for 2008

• Added Rand McNally as a community qualifier if
  the Census is not recognizing a community
• Using MHI based on the state average rather than
  PCI based on the national level
• Clarified allowable operating expenses

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Benefits

• Fosters economic growth
• Delivers enhanced
• Educational opportunities
• Health Care
• Public Safety Services

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Success Story

• Air Advantage, LLC
• Community Connect Grants
• 2003 Unionville, Michigan (Pop. 605) 214,532
• 2003 Port Hope, Michigan (Pop. 310) 219,176
• Broadband Loans
• 2004 43 communities, 1,500,000
• 2005 12 communities, 1,028,000
• Exciting Fact Today they are serving 55
  mid-Michigan communities and providing service to
  2,174 rural Michigan customers

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Success Story

• Lenowisco Inc. I
• Community Connect Grants
• 2005 Rose Hill, Lee County, Virginia (Pop. 714)
  506,048
• 2006 Ewing, Lee County, Virginia (Pop. 436)
  454,558.
• Exciting Fact Rolling out service at 5 Mb!!

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Success Story

• Nixs Medical Supply
• Dba CSWeb.net
• 2006 Gans, Sequoya County, Oklahoma (Pop. 208)
  531,750
• Exciting Fact They already have 50 subscribers

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Keys to Success

• Good management of the project
• High local involvement especially local
  leadership
• Good service at reasonable rates

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Distance Learning/ Telemedicine Programs
The DLT Grant and Loan Programs provide
rural communities with opportunities to obtain
educational and medical services from distant
locations utilizing communications
technologies.
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DLT FY 2007 Budget

• Combination Loan/Grant 50,000,000
• 45,000,000 Loan/5,000,000 Grant
• 91 Ratio
• Maximum Amount 20,000,000
• Minimum Amount 50,000

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DLT FY 2007 Budget

• ELECTRONIC MEDICAL RECORDS
• Combination Loan/Grant 25,000,000
• 20,000,000 Loan/5,000,000 Grant
• 41 Ratio
• Maximum Amount 1,000,0000
• Minimum Amount 50,000

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DLT FY 2007 Budget

• 100 DLT LOANS
• 62,900,000
• Maximum Amount 20,000,000
• Minimum Amount 50,000

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DLT GrantsEligibility

• What Kind of Projects are Eligible for Grants?
• Just about every type of organization is eligible
  to apply except individuals
• Benefits must flow to rural areas (not urban
  clusters over 20,000 or urbanized areas)
• Distance Learning and Telemedicine are defined
  for the grant program to exclude on campus
  benefit
• Telecommunications service (the transport
  mechanism itself) is not eligible for grants
• Every year the emphasis from applicants changes
  in recent years electronic medical technologies,
  such as Picture Archival and Communications
  Systems (PACS), have become dominant

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Distance Learning Project Examples

• Enabling small rural schools to remain accredited
  
• and viable by sharing teaching skills and
  variety
• of curriculum from larger schools
• Bringing specialized nonrecurring programs to
  rural areas
• NASA space missions
• Virtual field trips
• Offering continuing adult education and GED
  courses
• Delivering advanced placement college courses to
  high schools
• Sharing teaching resources between colleges
• Bringing accredited professional continuing
  education courses to hospitals

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Distance Learning
University Resources
Local Schools
Web Resources
Adult Ed/GED Resources
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Telemedicine Examples

• Providing teleradiology equipment to small
  hospitals and clinics to bring imaging capability
  to rural patients
• Creating remote treatment/consultation capability
  with videoconferencing
• Equipping visiting nurses associations with
  remote monitoring capability for home patients
• Establishing remote diagnostic and monitoring
  capability in ambulances
• Creating mobile or remote access capability to
  existing Electronic Medical Records Systems
• Establishing Picture Archival and Communications
  Systems for rural hospitals with no radiologist
  coverage

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Telemedicine
Schools
Local Hospital Mobile Computing
University Resources
Local Clinics
Regional Hospital
Local Hospital (Hub)
Electronic Med Records
Home Health Monitoring Mobile Health Units
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DLT Program Eligible Organizations

• Must operate a rural community facility and be
  qualified to deliver Distance Learning or
  Telemedicine services.
• Must be legally organized with capability to
  contract with USDA Rural Development.

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DLT Grant Program Eligible Purposes

• Purchase Installation of
• Inside Wiring
• Telecom and Data Terminals
• Audio and Video Equipment
• Interactive Video Equipment
• Computer Hardware Software
• Medical Equipment for Telemedicine Use
• Off-the-shelf Instructional Programming

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DLT

• For additional information
• http//www.usda.gov/rus/telecom/dlt/dlt.htm

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A Broadband Success Story

• Camellia Communications
• City of Greenville, Alabama
• Population 7,166

The situation In 2002, a state-of-the art
Hyundai auto plant was established in nearby
Montgomery this led to the growth of local
businesses supplying the plant broadband
infrastructure was required but not widely
available...
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A Broadband Success Story

• Camellia Communications
• City of Greenville, Alabama

The Rural Development Broadband Loan to Camellia
Communications provided financing for the
development of a city-wide broadband network,
connecting all municipal and fire/safety offices
and the ability to offer broadband services to
residents and businesses in Greenville and other
nearby communities
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A Broadband Success Story

Broadband service is also being deployed in rural
Butler County.
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A Broadband Success Story

Economic Impact an example Priesters Pecans,
a local company created in 1935, has modernized
operations and greatly increased Internet sales.
In 2006, Priesters received over 9,000 Internet
orders and shipped out over 71,000 packages.