stimulus webinar bingham feb 18 2009

8/14/2019 Stimulus Webinar Bingham feb 18 2009

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Grants and Other Funding Opportunities for Broadband and

Telecommunications Companies Underthe Economic Stimulus Act

A Bingham McCutchen Private WebinarPRESENTERS: Andrew D. Lipman, Senior Partner and Practice Group Leader

Frank G. Lamancusa, Of Counsel Telecommunications, Media and Technology Group

[email protected]@bingham.com

February 18, 2009



1

Highlights

• Legislation enacted on February 17

• Harmonizes Senate and House versions

• Bill actually increases money for broadband to$7.2 billion -- split between NTIA ($4.7 billion)and RUS( $2.5 billion) -- mostly grants

• More favorable than earlier versions, as toprocess, speeds, broadband standards,requirements, and eligibility



2

Highlights

• Encourages broad array of applicants

• Public-private partnerships no longer requiredfor NTIA grants

• Funding available until September 30, 2010

• Agencies already working on process



3

Highlights

• Must complete projects within 2 years of

award

• No rush to allocate 50% of funds this year, but

timing will be a factor for grant awards

• Broadband deployment investment tax creditsnot included in final bill



4

Overview of Funding

• NTIA -- $4.7 billion

• RUS -- $2.5 billion

• Health Information Technology -- $1.5 billion

• Electricity Delivery and Energy Reliability -- $4.5 billion

• Department of Labor -- $250 million

• Tax Investment Incentives



5

Broadband Technology Opportunities (BTO)Program

• NTIA to establish a national broadband service

development and expansion program

• NTIA to consult with FCC

• NTIA drafting grant guidelines and will seekpublic comment

• NTIA will hold public meetings, some outsideof DC



6

NTIA -- BTO Program Funding

• 4.7 billion appropriated

• $350 million for broadband inventory map• $250 million for programs to encourage adoption

of broadband services

• $200 million for expanding computer center capacity• $140 million for administration costs and FCC• $10 million for monitoring and auditing

• $3.75 billion left for NTIA grants



7

NTIA -- Grant Availability


• Broadband deployment project must becompleted within two years of award

• The Federal share limited to 80%

• NTIA may increase share above 80%• if the applicant petitions for a waiver; and• NTIA determines that the petition demonstrates

financial need



8

NTIA -- BTO Program Purpose

• Provide access in unserved areas

• Improve access in underserved areas

• Provide broadband education, awareness,training, access, equipment, and support

• Improve access for public safety agencies

• Stimulate demand for broadband, economicgrowth, and job creation



9

NTIA -- Uses of Funding

• Acquire equipment, instrumentation, net

working capability, hardware and software,digital network technology, and infrastructurefor broadband services

• Construct and deploy broadband servicerelated infrastructure

• Ensure access to broadband service bycommunity anchor institutions



10

NTIA -- Uses of Funding

• Facilitate access of broadband services to

vulnerable populations for educational andemployment opportunities

• Construct and deploy broadband facilities thatimprove public safety broadbandcommunications services

• Any other projects NTIA finds to be consistentwith the BTO program



11

NITA -- Eligibility

• State, political subdivision, District of

Columbia, a U.S. territory, an Indian tribe or native Hawaiian organization

• Nonprofit organizations

• Entities, including a broadband service or infrastructure providers, that NTIA finds to be

in the public interest

• NTIA grants to be awarded on technologically

neutral basis -- no minimum data speeds



12

NITA -- Eligibility

• Intent for as many entities as possible to be

eligible:

• wireless carriers• wireline carriers• backhaul providers• satellite carriers• public-private partnerships

• tower companies



13

NTIA -- Application

• Explain in detail how funds will be used to

carry out purposes

• Show that without grant the project would not

have been implemented• Demonstrate capability to perform project

• Disclose other funding sources• Assure that funds will be used and accounted

for in an appropriate manner



14

NTIA Award Considerations

• Award at least one grant in each State

• Applicant is a socially and economicallydisadvantaged small business concern

• Will infrastructure deployment for the greatestpopulation of users in the area:

• increase the affordability of service• provide the greatest broadband speed• enhance service for health care delivery,

education, or children



15

NTIA/State Interaction

• NTIA may consult with States to

• identify unserved and underserved areas• allocate grant funds affecting the State

• States encouraged to• coalesce stakeholders and partners• assess community needs• aggregate demand for services• evaluate demand for technical assistance

• NTIA sole authority to approve the awards



16

NTIA -- Reporting

• Grant recipients report to NTIA on use of

assistance and progress fulfilling theobjectives quarterly

• Reports are public and will be accessible viathe Internet

• Report on the status to Congress every 90days



17

NTIA -- Network Obligations

• Hot topic -- NTIA to coordinate with FCC, the

non-discrimination and networkinterconnection obligations that shall becontractual conditions of grants

• FCC’s broadband policy statement is theminimum requirement



18

FCC’s Broadband Policy Statement

• Consumers are entitled:

• to access the lawful Internet content of their choice

• to run applications and use services of their

choice, subject to the needs of law enforcement

• to connect their choice of legal devices that do notharm the network

• to competition among network providers,applications, and service providers, and content

providers



19

NTIA -- Broadband Inventory

• NTIA to develop and maintain a

comprehensive nationwide inventory map of existing broadband service capability andavailability

• Inventory map to become public within 2 years

• Opportunities for database providers



20

Rural Utilities Service (RUS)

• $2.5 billion in additional funding for broadband loans,loan guarantees, and grants

• Triples total 2008 RUS funding

• Available until September 30, 2010

• Projects receiving RUS funding cannot get funding from NTIA• Funding is available in any area of the U.S. but at least 75%

must go to rural areas without sufficient access to high speedbroadband

• Loans will leverage the amount of investment



21

RUS - Funding

• Funding priorities include:

• Projects that will deliver a choice to end users of more thanone service provider - underserved areas

• Projects that provide service to the highest proportion of rural residents without access to broadband -

unserved areas

• Applicants who are borrowers or former borrowers

• Projects that will be fully funded by award

• Projects that can be completed by award

• Projects that can commence promptly upon approval



22

RUS - Broadband Programs

• Community Connect Grant Program

• Provide broadband service on a “community-orientedconnectivity basis” to the most rural and economicallychallenged communities

•

Rural Broadband Access Loan and Loan Guarantee• Provide loans for the cost of construction, improvement, and

acquisition of facilities and equipment for broadband servicesin eligible rural communities



23

RUS - Broadband Programs

• Eligible Entities: incorporated organization, Indian tribe or

tribal organization, state or local unit of government,cooperative, private corporation, limited liability company

• Ineligible Entities: individuals, partnerships

• Any entity that serves more than 2% of telephone subscriber lines in U.S is ineligible for Loan and Loan Guarantee program

• Required Broadband Transmission Speed: currently 200

kbps down/up

• No network neutrality requirements



24

RUS - Community Connect Grant Program

• Annual Notice of Funding Availability announces:

• Application deadline (e.g., March 28 for FY2008)

• Minimum and maximum funding amounts (e.g., $50,000and $1 million for FY2008)

•

Scoring Criteria used to rank and award grants:• Rurality - population of community

• Rural area: any area not located within the boundaries of any incorporated or unincorporated city, village or borough

having a population in excess of 20,000

• Economic Need - median household income of communityas percentage of state average MHI

• “Community-oriented connectivity benefits” - includeslocal community involvement in plan and implementation



25


• Eligibility Requirements

• Serve a rural areas throughout which broadband transmissionservices does not currently exist

• Serve one and only one Community recognized in the latestBureau of Census or Rand McNally Atlas

• Provide a Community Center with at least 10 Computer AccessPoints free of charge to users for at least 2 years

• Deploy basic broadband transmission service free of charge

for at least 2 years to Critical Community Facilities

• Offer Basic Broadband transmission service to residential andbusiness customers

• Demonstrate at least 15% matching contributions (e.g., cash,in-kind contributions)



26


• Eligible Purposes

• Construction, acquisition or leasing of facilities needed to

offer broadband service to residential & business customers• Improvement, expansion, construction or acquisition of a

Community Center - cannot exceed 5% of requested amountor $100,000

• End-user equipment needed to carry out project

• Operating Expenses incurred to provide broadband toCommunity Center for first 2 years of operation and to provide

training - cannot exceed $250,000

• Purchase of land, buildings, or building construction neededto carry out project

• Ineligible Purpose: Finance duplication of existingbroadband service provided by another



27

RUS - Rural Broadband Loan & Loan Guarantee

• Types of Loans

• Direct cost-of-money loans: interest rate equal to Treasurycost of borrowing

• Direct 4% loan: available for community with a population of less than 2,500 inhabitants and no broadband services, and

located in county with per capita income less than or equal topercent of national average to be published annually by RUS

• Private Loan Guarantees: interest rate set by lender; RUSguarantees no more than 80% of principal

• Applications are accepted year-round and processedon a first-come, first-serve basis

• Average processing time is 6-7 months



28

RUS - Rural Broadband Loan & Loan Guarantee

• Minimum funding amount is $100,000

• Loan and Loan Guarantee Program reauthorized byCongress in 2008 with changes

• RUS has issued proposed rules which could alter eligibility and application requirements for the loan

and loan guarantee program



29

Health Information Technology

• Health Resources and Services:

• $1.5 billion for grants for construction, renovation and

equipment and for the acquisition of health informationtechnology for health centers

• “Health Information Technology” includes hardware,software, intellectual property, packaged solutions sold asservices for the electronic creation, maintenance or exchangeof health information

• Legislation allows award of competitive grants to States or

Indian tribes to establish a loan program• To be used for loans and loan guarantees to health care

providers to purchase electronic health record technologyamong other things



30

Electricity Delivery and Energy Reliability

• Department of Energy -- $4.5 billion

• Purpose:• Modernization of electric grid

• Inclusion of demand responsive equipment• Enhance security of infrastructure• Facilitate recovery from disruptions• Energy storage research and development

• Funding up to 50% of costs



31

Electricity Delivery and Energy Reliability

• Funding to support “smart-grid” projects in

urban, suburban, tribal, and rural areas

• Department of Energy to establish application

procedures within 60 days


• Goal of using at least 50% of funds for activities initiated by June 15, 2010



32

Department of Labor

• $250 million allocated for training

• Training for wireless and broadbanddeployment is an activity eligible for grants as

a high growth and emerging industry sector

• No firm application process yet developed



33

Tax Investment Incentives

• No broadband infrastructure deployment tax

credits in legislation

• Extension of Bonus Depreciation

• Businesses allowed to recover costs of capitalexpenditures made in 2009 under accelerateddepreciation schedule

• Businesses permitted to write-off 50% of depreciable property acquired in 2009 for use inthe United States



34

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stimulus webinar bingham feb 18 2009

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