ARRA BROADBAND FUNDING: The Latest Issues

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ARRA BROADBAND FUNDING The Latest Issues

• Nicholas P. Miller
• April 8, 2009
• PTI Webinar

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Program

• Introduction
• Purpose and Permitted Uses
• Eligibility and Priorities Attractiveness of
  your communitys project
• What you should be doing now
• Role of your state
• Other programs of interest
• Help Available

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Your Takeaway Message

• Time is of the essence.
• Initial money will be awarded QUICKLY
• 1/3 by September 30, 2010
• Many may not qualify
• Design your project to comply
• Be proactive at key federal agencies
• Commerce National Telecommunications and
  Information Agency (NTIA)
• Agriculture Rural Utilities Service (RUS)
• Federal Communications Commission (FCC)

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What is at Stake?

• 7.2 billion for broadband projects
• NTIA 4.7 billion
• NTIA is all grants80/20 match
• RUS 2.5 billion.
• RUS is loans, loan guarantees, plus grants
• assume 75 of project must be rural
• Other money elsewhere?
• 2B available in Health IT programs
• Electric Grid Upgrade
• Intelligent Highways
• DoD quality of life

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Other Specific Allocations

• at least 200M expanding public computer
  center capacity (community colleges and public
  libraries)
• at least 250M innovative programs to
  encourage sustainable broadband adoption.
• DTV conversion 90M public outreach and
  education to vulnerable populations
  one-to-one assistance for box installations.

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Key Federal Agencies

• NTIA Department of Commerce (National
  Telecommunications and Information Agency)
• RUS Department of Agriculture (Rural Utilities
  Service)
• FCC Federal Communications Commission
  rulemakings
• working with NTIA and RUS on policies and
  definitions
• will establish a national broadband plan
• Will develop Broadband map

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NTIA- Mandate

• NTIA Broadband Technology Opportunities Program
  (BTOPS) a national broadband service
  development and expansion program

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NTIA-Mandate (cont)

• Program shall complement (not conflict with)
  other Federal broadband initiatives.
• as expeditiously as practicable
• all awards before the end of fiscal year 2010 (3
  traunches?)
• Projects must be completed within 2 years
  following award
• Regular reports to Congress on progress.

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NTIA Purpose of BTOPS

• Broadband access in unserved and underserved
  areas.
• Training and equipment to facilitate greater
  use of broadband by
• Schools
• Libraries
• medical and healthcare providers
• higher education
• community support organizations
• Improve public safety access to and use of
  broadband

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BTOPS Grants

• Notice of Funds Availability--Request for
  Competitive Grant Proposals (NOFA)
• Broadband Infrastructure
• Must meet non-discrimination and network
  interconnection obligations
• At least FCCs broadband policy statement (FCC
  05-15, adopted August 5, 2005).
• Broadband Equipment, including
• Instrumentation,
• Networking capability, hardware and software,
• Digital network technology,
• Innovative programs to encourage sustainable
  broadband adoption
• Public computer center capacity

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BTOPS Grant Eligible Applicants

• State local governments
• Non-profits
• Public-private partnerships
• any other entity that meets a to-be-defined
  public interest test

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What Rules will Govern the Grants

• NTIA, in consultation with FCC must define
• unserved area
• underserved area
• Public Interest obligations for an eligible
  private entity to seek funding
• http//www.ntia.doc.gov/frnotices/2009/FR_BTOP_RFI
  _090312.html
• Comments due April 13, 2009
• At least one grant per state
• Project completion within 2 years of grant
• Project would not have been implemented during
  the grant period without Federal grant assistance

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What Rules will Govern the Grant?

• Buy American terms are favored but not
  mandatedsee OMB release
• http//www.whitehouse.gov/omb/assets/memoranda_fy2
  009/m09-15.pdf
• Davis-Bacon Act Labor rates apply, i.e.
  employment salaries must meet or exceed the
  prevailing local rates.
• Compliance with NTIA/FCC published
  "non-discrimination and interconnection
  obligations." (See FCC's 2005 Internet policy
  statement.)
• Extensive project reporting and auditing

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Is the Grant 100 funding?

• No, the NTIA grants require a 20 local match
• Waiver is possible if financial need
• NTIA current rules provide for in-kind matches.
  (15 C.F.R. 24.24)

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What Counts as a In-Kind?

• In past, NTIA has approved project related
  expenditures
• Wireless Site preparation in a mobile or fixed
  location.
• Site analysis and make-ready costs,
• Overhead costs as much as 20 of total project
  costs e.g., wages and salaries
• Indirect cost rate of up to 10.
• Assume could cost of in-kind be booked as
  initial capital cost of project?
• NTIA has discretion to tighten these past
  criteria

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Criteria for Judging Applications

• Competitive -- based on evaluation priorities.
• Priorities
• Construct and deploy broadband infrastructure to
• Unserved
• underserved
• Service to community anchor institutions
• vulnerable populations educational and
  employment opportunities
• improve public safety broadband communications
  services

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Tie-breakers

• benefit the greatest population of users in the
  area
• Increase service affordability and subscribership
• greatest broadband speed possible
• enhance service for
• health care delivery
• education
• children
• No unjust enrichment through another Federal
  program
• Applicant is disadvantaged small business
  concern

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Application Steps

• Applicant is eligible
• Application meets NTIA terms
• Explain
• how grant will be used
• to carry out the purposes of Act
• in an efficient and expeditious manner
• project would not have been implemented during
  the grant period without Federal grant
  assistance.
• Demonstrate
• ability to comply with federal, state and local
  laws
• ability to meet 20 match

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State Role

• NTIA has sole discretion to decide BUT
• NTIA may consult States
• NARUC and several Governors State priority
  should control
• RECOMMENDATION Talk to your State about making
  your project a priority.
• CAVEAT State is eligible to compete for funds.

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RUS Program

• 2.5 billion in funding
• Funds are available for grants, loans and loan
  guarantees
• Unlike BTOPS, no new authorization language
• Funds can be used
• in any area
• if at least 75 percent is a rural area without
  sufficient broadband access to facilitate rural
  economic development, as determined by the
  Secretary of Agriculture.
• No NTIA BTOPS funds in the same area.

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RUS Priorities

• Priority will be given to
• broadband systems that will deliver end users a
  choice of more than one service provider
• presence of another provider does not appear to
  disqualify your project.
• projects that provide service to the highest
  proportion of rural residents that do not have
  access to broadband service.

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RUS Priorities (continued)

• Applicant is existing or former RUS borrower
• Demonstrate all project elements will be fully
  funded
• Project will be completed if requested funds are
  provided.
• Can commence promptly following approval.

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RUS Process

• RUS/NTIA held joint hearings
• RUS has stated it will cooperate with NTIA
• Both agencies have stated they will consider
  parallel grants for complimentary proposals
• RUS has indicated it will consider being guided
  by same rules as NTIA re
• Eligibility
• Priorities
• Timing of funding decisions

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Current Predicted Timing for NOFAs and Funding
Decisions

• 4/13/09 Public Comment due on Request for
  Comments
• Mid-late May NTIA and RUS issue separate NOFAs,
  resolving questions asked during public comment
  period
• Late June-late July Expect initial applications
  to be due
• Late August-Sept Grant Awards for 1st of 3
  traunches of grants
• 2d Traunche NOFA in December 2009
• 3d Traunche NOFA in June 2010

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Big IssuesStill Unresolved

• How much money in each trauche?
• Small 1st traunche to learn lessons?
• Large 1st trauche to accelerate ARRA goals
• Role of Incumbent Providers
• Overbuilding encouraged or discouraged?
• What is underserved?
• Wireless qualified as broadband?
• Fiber vs DSL as broadband?
• States control or submit pre-emptive proposals?

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What Should I be doing now?

• Make local elected officials aware.
• Define the project, including scope and cost as
  soon as possible.
• a project cost-study for the geographic area
• a build-out schedule (completed in two years!)
• Address every possible priority

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What Should I be doing now?

• Enlist allies
• Who will the project serve? (Local schools,
  public safety agencies, low-income, unemployed,
  aged, and otherwise vulnerable populations)
• Consider partnering with private sector providers
• Share your plans with your state and federal
  elected officials.
• File comments before April 13 Help define the
  terms of the program
• Communicate with NTIA, FCC and RUS

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Additional Programs of Interest

• National Broadband Plan
• DTV Education funds

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National Broadband Plan

• FCC must provide plan
• seek to ensure that all people in the U.S. have
  access to broadband
• set benchmarks for achieving that goal.
• include an analysis of the most efficient
  mechanism
• a detailed strategy
• the status of deployment
• projects funded by this bill.
• Controversy re cart before horse

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DTV Transition Education Program

• 90M public outreach and education to vulnerable
  populations.
• This money may be used by NTIA or the FCC.
• Consider applying for local out-reach and
  one-to-one assistance for converter-box
  installation. 
• ESL population
• Home-bound elderly
• Rural unserved by CATV

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Online Resources

• Recovery.gov Tracks federal agency expenditures
  of American Recovery and Reinvestment Act monies
  http//www.recovery.gov
• Office of Management and Budget implementation
  guidance on stimulus spending http//www.whitehou
  se.gov/omb/assets/memoranda_fy2009/m09-10.pdf
• National Telecommunications and Information
  Administration programs http//www.ntia.doc.gov/
  otiahome/otiahome.html
• Rural Utilities Service programs
  http//www.usda.gov/rus/telecom/index.htm
• Federal Communications Commission on rural
  broadband http//wireless.fcc.gov/outreach/index.
  htm?jobbroadband_home
• Full text of American Recovery and Reinvestment
  Act of 2009 http//frwebgate.access.gpo.gov/cgi-
  bin/getdoc.cgi?dbname111_cong_billsdocidfh1enr
  .pdf

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Professional Assistance

• As you assemble your project, identify project
  professionals who can work quickly to assist in
  the technical aspects of a project.
• Engineers
• Financial analysts
• Legal/Contract Assistance
• Educate federal agencies as they define an
  unserved area, underserved area, Open
  Access, and wireless open access

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Questions

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Nicholas P. Miller nmiller_at_millervaneaton.com Mill
er Van Eaton, P.L.L.C. 1155 Connecticut Avenue,
N.W. Suite 1000 Washington, D.C.
20036-4301 Phone [phone] Fax [phone] W
ebsite www.millervaneaton.com