USDA's Rural Broadband Boost—With More to Come
Friday, November 16, 2018
USDA's Rural Broadband Boost—With More to Come
You’re reading the Benton Foundation’s Weekly Round-up, a recap of the biggest (or most overlooked) telecommunications stories of the week. The round-up is delivered via e-mail each Friday.
Round-Up for the Week of November 12-16, 2018
Rural broadband got an upgrade this week. The U.S. Department of Agriculture (USDA) is investing $91 million in broadband infrastructure. As Benton readers know, broadband access in rural areas is a huge challenge: according to the Federal Communications Commission, 80 percent of the 24 million American households who lack reliable, affordable, high-speed internet access are in rural areas.
Yes, the USDA is a Rural Broadband Agency
The USDA has been investing in rural telecommunications infrastructure for decades. Current telecommunication programs offer more than $700 million per year for modern broadband e-Connectivity (or electronic connectivity) in rural communities.
This week, USDA Assistant Secretary for Rural Development Anne Hazlett identified how some of that money will be used: 19 projects in 12 states will receive $91 million in total to bring broadband to 27,000 rural businesses and households. [Yes, that's over $3,300 per potential connection, if you're scoring at home.] Over $58 million of the funding will come as loans while $33 million will be grants.
Projects receiving funding are located in Arkansas, Georgia, Iowa, Kentucky, Minnesota, North Carolina, North Dakota, New Mexico, Oklahoma, Tennessee, Utah, and Virginia. The loans and grants focus on upgrading fiber networks, expanding service areas, and building community centers to increase tech access.
In Kentucky, the Thacker-Grigsby Telephone Company will receive a loan of over $20 million to construct 427 miles of fiber-to-the-premises (FTTP) service in the Cody and Pippa Passes exchanges, which will complete the company’s migration to an all FTTP system and serve approximately 30,000 customers. Cody and Pippa Passes are located in Knott County, part of the Eastern Coal Field region of Kentucky. The $20 million is the biggest financial commitment the USDA made in this announcement.
Arkansas Rural Internet Services LLC is receiving a $19.9 million loan to construct a fiber-to-the-home broadband system within Dallas, Calhoun and Ouachita counties in rural southern Arkansas. The network will provide media and video services as well as telephone service with unlimited long distance. The broadband service will not have data limits. These services will provide enhanced educational and economic opportunities. Approximately 5,100 subscribers will be served.
The Tularosa Basin Telephone Company will get a nearly $12 million loan to make system improvements in the exchanges of Carrizozo, Cloudcroft, and Tularosa, New Mexico for 9,764 customers. Tularosa proposed to construct 176 miles of fiber-optic facilities, construct new FTTP facilities, and upgrade digital subscriber line (DSL) and FTTP electronics. The improvements will allow Tularosa the ability to enhance services and provide subscribers voice and higher broadband speeds. All subscribers in the system will have access to minimum broadband speeds of 10 megabits per second (Mbps) upload and 1Mbps download.
Oklahoma's Pine Telephone Company, an incumbent local exchange carrier, is receiving three grants totaling over $6 million. In and around Pushmataha County, Pine will construct:
- A fiber-to-the-home broadband system providing state-of-the-art services to 167 households and 6 businesses. A community center will also be established within the service area where residents can access computer terminals and WiFi, free of charge. The company will contribute $450,400 toward this $2.5+ million project.
- A fiber-to-the-home broadband system providing state-of-the-art services to 163 households and 16 businesses. Again, a community center will also be established within the service area where residents can access computer terminals and WiFi, free of charge. Pine will contribute $340,400 toward this $2.1+ million project.
- A fiber-to-the-home broadband system providing state-of-the-art services to 163 households and 16 businesses. A community center will also be established within the service area where residents can access computer terminals and WiFi, free of charge. Pine will contribute $265,400 toward this $1.3+ million project.
In adjacent Le Flore County, Oklahoma, the Choctaw Nation is receiving a $2.9 million grant to construct a hybrid fiber and fixed wireless system. This project will serve 300 households and 15 businesses, and will include a community center in the Hodgen School where the public can access computer terminals and Wi-Fi service free of charge. The Choctaw Nation of Oklahoma will contribute $450,000 to help complete this project. The Choctaw Nation owns seven casinos in eastern Oklahoma.
Utah's Emery Telecommunications & Video has been awarded three grants totaling over $3.3 million. The funds will be used to provide fiber-to-the-premises service to:
- San Juan County, passing 111 households. These unserved households will gain access to state-of-the-art voice, video, and data services. A community center will also be located within the Mexican Hat-Halchita School where residents can access computer terminals and Wi-Fi, free of charge. Emery Telecom, headquartered in Emery County, Utah, is a "non-profit" cooperative that was formed to service the needs of the residents in East-Central Utah. It is part of the larger Emery Telecom corporate family which has been providing telecommunications service since 1950. Emery Telecom will contribute $367,777 toward this $2+ million project.
- San Juan County, passing 178 households. A community center will also be established where residents can access computer terminals and Wi-Fi, free of charge. Emery Telecom will contribute $112,474 to help construct the $449,894 project
- Grand County, passing 191 households. A community center will also be established where residents can access computer terminals and Wi-Fi, free of charge. Emery Telecom will contribute $209,880 toward this $839,520 project.
You can view all of the projects here.
Don't Forget About the e-Connectivity Pilot Program
The Consolidated Appropriations Act of 2018 (HR 1625), the omnibus spending bill for fiscal year 2018, appropriated $600 million for the USDA's e-Connectivity pilot, which is meant to expedite loans and grants for the costs of the construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural areas.
In July, USDA's Rural Utilities Service invited comment on implementation of the program. The deadline for public input was September 10 and the USDA received more than 250 comments from stakeholders.
In August, USDA Senior Advisor for Rural Infrastructure Jannine Miller offered a few hints about the e-Connectivity pilot. She noted, for example, that while the USDA traditionally was able to offer loans or grants, but not a combination of the two, that could change with the pilot program. Miller also said USDA hoped the pilot program would help uncover business cases to help make broadband more feasible, noting, for example, that the program would treat farms as revenue-generating businesses rather than households.
“Our hope is that this will be a drop in the bucket that catalyzes more investment,” she said. She pointed to technologies such as precision agriculture, smart forestry, telehealth, and distance learning as examples of how broadband can benefit rural areas, noting, “we hope the private sector will say ‘I didn’t realize there was a business case there.’”
In October, Agriculture Secretary Sonny Perdue said that a plan on how to divvy up the pilot's $600 million was nearing completion and likely would be in place by the end of 2018.
In addition to the grants and loans announced this week, we also saw a public notice of additional USDA support to be awarded by the department this year. In a Notice of Solicitation of Applications, the Rural Utilities Service announced it is accepting applications for fiscal year 2019 for the Rural Broadband Access Loans and Loan Guarantees Program to support construction, improvement, and acquisition of facilities and equipment that will provide service in eligible rural areas. Applications will be accepted immediately through September 30, 2019, with RUS processing loan applications as they are received. Loans will not be made for less than $100,000 or more than $25,000,000.
The Benton Foundation is dedicated to policies that bring open, affordable, high-capacity broadband to all people in the U.S.—and rural communities represent a particularly difficult challenge in working towards that goal. The investments announced this week by the USDA are a step in the right direction toward closing the rural digital divide. Obviously, much more work is needed at the local, state, and federal levels to make closing the digital divide a reality.
- DOJ Requires Sinclair and 5 Other Broadcast TV Companies to Terminate and Refrain from Unlawful Sharing of Competitively Sensitive Information (DOJ)
- CNN sues President Trump, requesting that Jim Acosta's White House press pass be restored (Los Angeles Times)
- FCC Commissioner Carr, San Jose Mayor Spar Over 5G (Politico)
Weekend Reads (resist tl;dr)
- FCC's Top Lawyer Lays Out Net Neutrality Argument (Politico)
- The Supreme Court and House Democrats breathe new life into net neutrality (Tom Wheeler)
- Delay, Deny and Deflect: How Facebook’s Leaders Fought Through Crisis (New York Times)
ICYMI from Benton
- Antitrust Law: Look Back to the Future, Jonathan Sallet
- From Midterms to What?, Michael Copps
- Cities (and States) are Doing it for Themselves, Gigi Sohn
- The Trump Midterm: Looking at the 116th Congress, Robbie McBeath
November 2018 Events
Nov 19 -- Advisory Committee on Diversity and Digital Empowerment, FCC
Nov 27 -- New Debates and Tensions in Antitrust: What Does the Future Hold?, Georgetown Center for Business and Public Policy
Nov 27 -- How Encryption Saves Lives and Fuels our Economy, New America
Nov 30 -- Forum on AI and Machine Learning, FCC
Benton, a non-profit, operating foundation, believes that communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities to bridge our divides. Our goal is to bring open, affordable, high-capacity broadband to all people in the U.S. to ensure a thriving democracy.
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