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Guide to Broadband Provisions in the American Recovery and Reinvestment Act

The recently passed American Recovery and Reinvestment Act of 2009 appropriates an unprecedented amount of money to initiatives aimed at increasing access and adoption of affordable broadband technology. This recognition of broadband’s rapidly expanding role in all aspects of our lives, underscores why it’s imperative for states to think strategically about how to integrate broadband into their long-term goals. For example, broadband can be used to increase government transparency, improve access to healthcare, improve energy management, assist in workforce redevelopment and increase educational opportunities. By effectively leveraging broadband, a state can create efficiencies, implement cost saving programs, increase transparency, and provide better services and increased opportunities to its citizens.

The stimulus plan allocates $7.2 billion to promote high-speed Internet programs. The majority of the funding will be used to increase broadband access in rural, unserved, and underserved areas. Additionally, funding is provided to support community programs that encourage broadband adoption in low-income communities, for initiatives that expand public community centers capacity and to fund the development of a national broadband map. The National Telecommunication and Information Administration (NTIA) and the Rural Utility Service (RUS) will be charged with distributing the grants and loans. However, NTIA and RUS appropriated funds will operate independently and are mutually exclusive ofone another. For example, if an area is receiving funds with a grant from RUS that same area cannot be covered under a project funded through NTIA’s, Broadband Technology Opportunities Program.

National Telecommunications and Information Administration:

The NTIA was allocated $4.7 billion in total. The majority of the NTIA funds, $4.35 billion, will be distributed as grants, which may go to states, political subdivisions of states, municipalities, non-profits or private companies through the Broadband Technology Opportunities Program. In addition to grants aimed at increasing access to broadband, at least $250 million of the NTIA funds are set aside for competitive grants for programs that encourage sustainable broadband adoption, while an additional $200 million in grants are set aside for expanding public computer center capacity. Additionally, another $350 million will fund the Broadband Data Improvement Act to develop broadband inventory mapping and support community initiatives.

Specifically, the NTIA may provide eligible entities with grants to accomplish the following

  • Acquire equipment, instrumentation, networking capability, hardware and software, digital network technology, and infrastructure for broadband services;
  • Construct and deploy broadband service related infrastructure;
  • Facilitate access to broadband service by low-income, unemployed, aged, and otherwise vulnerable populations in order to provide educational and employment opportunities to members of such populations;
  • Ensure access to broadband service by community anchor institutions;
  • Construct and deploy broadband facilities that improve public safety broadband communications services; and
  • Undertake other projects and activities that the grantor finds consistent with the purposes for which the program is established.

While many of the grant application requirements have yet to be released, the following details were included in the stimulus bill:

  • Under the legislation the NTIA was directed to:

    • Award at least one NTIA grant to each state;
    • Dispense grants by the end of the 2010 fiscal year;
    • Fund only projects that adhere to the Federal Communications Commission's Internet nondiscrimination and openness principles;
    • Promote projects that will "provide the greatest broadband speed possible;”
    • Consult with state governments to determine which areas are "unserved" and “underserved;”
    • Consult with states when determining how to allocate grants within that state;
    • Consider whether an application to deploy infrastructure in an area will increase the affordability of and subscribership to the greatest population of users in the area; provide the greatest broadband speed possible to the greatest population of users in the area; enhance service for health care delivery, education, or children to the greatest population of users in the area; and will not result in unjust enrichment as a result of support for non-recurring costs through another Federal program for service in the area.
    • In order to receive funding from the NTIA, eligible entities must submit an application, at such time, in such form, and containing such information as maybe required. 
  • Grant applications must include, among other things, the following information:

    • A demonstration that projects receiving money will be substantially completed in two years;
    • A demonstration that an entity can meet the grant’s 20% matching requirement (the federal government will pay up to 80% of the cost) or is eligible for an economic hardship waiver;
    • An explanation of how any amount received under the program will carry out the objectives of the legislation and be used to an efficient and expeditious manner, including a demonstration that the project would not have been implemented during the grant period without federal grant assistance;
    • Demonstrate, to the satisfaction of the grantors, that it is capable of carrying out the project or function to which the application relates in a competent manner in compliance with all applicable federal, state, and local laws.

Rural Utility Service Grants and Loans:

The Rural Utility Service (RUS) will administer $2.5 billion in grants and loans. In order to receive a grant from the RUS, 75% of the area being served must be rural and without sufficient access to high-speed broadband to facilitate rural economic development. Priority will be given to applications for broadband systems that will allow end users to have a choice of more than one service provider, to projects servicing the highest proportion of rural residents, and to borrowers or former borrowers under Title II of the Rural Electrification Act of 1936.