RUS Could Leverage $600 Million Pilot Into $1 Billion for Broadband, Acting Chief Says
A $600 million e-connectivity pilot program could be leveraged into $1 billion in broadband support, said Rural Utilities Service acting Administrator Chris McLean at a Schools, Health & Libraries Broadband Coalition conference Friday. He said RUS is looking at providing…
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a mix of grants and loans, and while the former are scored dollar-for-dollar for budgetary purposes, loans aren't, allowing funding to be stretched. RUS hopes it can accept applications "early next year," he said, amid contracting and IT "contingencies." Electric co-ops are eager to participate, seeing broadband as enhancing their grids and economic opportunities in their rural communities, said Brian O'Hara, National Rural Electric Cooperative Association senior director-regulatory issues. "Interest is only growing." One complication is co-ops must get at least 85 percent of revenue from members to retain tax-exempt status, with last year's tax overhaul broadening the definition of revenue, he said. The RUS mandate is to target funding on rural areas where at least 90 percent of households lack "sufficient access" to 10/1 Mbps service, but O'Hara called for efforts to deploy 25/3 Mbps service. He said grants could be a "game changer," particularly in sparsely populated areas, because loans often "don't move the needle" making a business case. McLean quipped grants are "like dating," as "you hope it goes well," but loans are "like marriage," as RUS and recipients "have to live with each other." RUS wants project participants to have "skin in the game" and make serious commitments, and believes community partnerships are vital, he said. Program challenges include determining actual, not advertised, data speeds and figuring out how to measure service quality, he said. O'Hara credited the FCC Connect America Fund Phase II subsidy auction with expanding broadband support beyond incumbent telcos, including to electric co-ops, which he said will get about $225 million cumulatively over 10 years. He voiced interest in the Remote Areas Fund auction, but said the bigger deal will be what happens after 2021 to about $1.5 billion in annual CAF II funding currently going to large telcos. Public schools in Kent County, Maryland, provide students -- 62 percent of whom qualify for free meals -- with laptops and other devices, said Laura Jacob, the system's technology supervisor. The county government played a key role by building a 110-mile fiber network with 70 hot spots to expand home internet access, she said.