Tag Archives: farm bill

Federal farm bills crank up broadband speed, options

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It’s farm bill time again in Washington, D.C. Every five years or so, congress reauthorises and rewrites rural development and (urban and rural) food stamp programs. The U.S. house of representatives and the senate passed their own bills, and each has good news for broadband infrastructure development. So far.

The version passed by the house specifically allows the federal agriculture department’s Rural Utilities Service, which runs the major rural broadband infrastructure programs, to fund middle mile projects. Those would be tied to “the future ability to link”. In other words, forward looking middle mile projects can be funded.

The U.S. senate’s version of the farm bill (taking into account the published amendments – but take nothing for granted) changes the minimum speed standard that RUS uses. It would read…

The minimum acceptable level of broadband service for a rural area shall be at least—
(A) a 25-Mbps downstream transmission capacity; and
(B) a 1-Mbps upstream transmission capacity.

That language only applies to projects funded by RUS via loans or, less commonly, grants.

There’s also wiggle room. Current law, which would not be changed, says that the federal agriculture secretary “may adjust…the minimum acceptable level of broadband service” and “may consider establishing different transmission rates for fixed broadband service and mobile broadband service”. As a matter of practice though, the agriculture department has only raised the minimum, not lowered it. The 25 Mbps down/3 Mbps up standard is already written into regulations issued by the department.

Even so, clear instructions from congress are very helpful in this case. It can be hoped that the Federal Communications Commission, which uses a minimum standard of 10 Mbps download and 1 Mbps upload speeds for its rural broadband subsidy program, will notice of it.

The California legislature, on the other hand, went in the opposite direction last year. After accepting bag loads of cash self serving arguments from lobbyists working for AT&T, Frontier Communications, Comcast, Charter Communications and other big, monopoly-model Internet service providers, lawmakers lowered California’s minimum broadband speed standard to 6 Mbps down/1 Mbps up and effectively banned middle mile projects.

It’s a fair bet big telcos and cable companies will apply the same kind of pressure on federal lawmakers as the two versions of the farm bill are reconciled. Their Washington, D.C. lobbyists are already claiming the senate’s bill will block “overbuilds” (it does include language that tightens the eligibility verification process – the devil will be in the details).

$50 million for rural gigabit projects included in farm bill

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Incumbents are still king.

The U.S. senate just joined the house in approving a new $50 million ($10 million a year for five years) “Rural Gigabit Network Pilot Program”. It’s in the farm bill just sent on for the president’s approval (or not). Unlike current rural broadband subsidy programs, it allows grants in addition to loans and doesn’t particularly favor incumbents.

An eligible applicant is one that does “not already provide ultra-high speed service to a rural area within any State in the proposed service territory”. Ultra-high speed service is defined in the bill as “1 gigabit per second downstream transmission capacity”. Only rural communities – 20,000 inhabitants or fewer – where there’s no existing gigabit service are eligible.

The program is actually more expansive than the original version in the bill passed by the senate but rejected by the house – there’s no longer a five project maximum and a limit of one per state.

Other than the gigabit program, though, federal rural broadband subsidies won’t change very much. Like the version passed by the house last summer, the compromise farm bill is heavily weighted towards the status quo: the core broadband subsidy program administered by the Rural Utilities Service (RUS) will continue at the $25 million a year level, only allow loans and will generally protect and fund incumbent service providers. It also lets incumbents challenge projects proposed by would-be competitors and sets a minimum service level of 4 Mbps down/1 Mbps up.

The rural gigabit community program will be worth watching. It’s not a lot of money – one fiber-to-the-home project can chew through $10 million in a hurry – but it’s more than nothing, which is what the federal government is doing now.

Text of compromise 2014 farm bill.

Current law governing federal rural broadband subsidies – the new language amends what’s already there.

Twelve days of Christmas might end with broadband in a farm bill

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Democrats and republicans are reportedly finding middle ground on a re-write of the U.S. agriculture, rural development and food subsidy law, otherwise known as the Farm Bill. The two competing bills passed earlier this year both include money for rural broadband projects, but the house of representative’s version has only about half as much money in it as the senate’s. In either case it’s barely noticeable in a trillion dollar-scale package.

There’s no word on how broadband programs are faring, in the fight over billions of dollars for crop subsidies and food stamps. According to Politico.com, negotiators are determined to keep the haggling out of the public eye until a final version is ready for vote, probably in January…

Few details have been released publicly by [house and senate ag committee chairs] Lucas and Stabenow to date, and both are leery of saying too much before January and risking attacks over the recess. “Your mother wouldn’t let you open your Christmas present before Christmas morning,” Lucas joked, fending off questions from reporters.

Negotiators seem to be focused on dollars and not on ideological differences, which takes a lot of heat out of the discussion. On that basis, I’d bet that any broadband goodies that might end up under your desiccated tree in January will be about the same dollar total as the status quo house version, but still could include some of the senate’s perks, like allowing grants in addition to loans or funding rural gigabit community pilot projects.

It isn’t going to happen by Christmas, but by the time we get to ten lords a leaping we might have some idea.

Rural broadband alternatives remain under the radar in farm bill negotiatons

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The cloaking device seems to be working.

Rural development subsidies, including broadband construction programs, do not seem to be among the hot button issues as the debate in Washington continues over the trillion-dollar farm and welfare package known as the farm bill.

There are major differences between the broadband subsidies approved earlier this year by the republican controlled house and the democrat controlled senate. The house version more or less continues the current program, maintaining the focus on loans and keeping it at $25 million per year. The senate version doubles the funding to $50 million a year, allows direct grants as well as loans and sets up a vaguely worded rural gigabit community pilot project.

The senate’s version makes it possible for more communities to apply, raising the population limit from 20,000 to 50,000. On the other hand, only areas with one incumbent service provider (or none) are eligible. The current program allows funding for areas with as many as two incumbents. Other provisions bake a 4 Mbps down/1 Mbps up acceptable service level into law and allow incumbents to directly challenge projects.

The house version also creates a protest process for incumbents, and requires the USDA to consider the cost of upgrading existing facilities rather than financing a new competitor. On the whole, cable and telco lobbyists should be pleased.

The real wrangling is over the two big ticket items – food stamps and crop price and insurance subsidies – but several side battles have emerged. Labelling requirements for imported food, California’s rules regarding the treatment of farm animals and requirements for adding ethanol to gasoline are among the smaller issues getting attention in the media and, it appears, from the senate and house staffers who are doing the grunt work.

Nothing yet, though, about rural development programs.

Prepared statements, but no prepared solutions for rural broadband development

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We’ll get back to you on that.

Wednesday’s meeting between senators and house members from both parties, to discuss what’s known as the farm bill, set the table for ongoing negotiations over what’ll be in it, but didn’t otherwise show progress toward agreement. The farm bill is a trillion dollar package of subsidies for farmers, rural development projects and groceries for the millions of people in the U.S. that rely on food stamps. The house and the senate have competing versions with significant differences – including how rural broadband projects are supported, if at all – and it’s up to the farm bill conference committee to negotiate a compromise.

The committee met on Wednesday for two and a half hours. Most of that time was taken up by committee members reading prepared statements. A couple of points quickly became clear: 1. the big tussle will be over the big ticket item, food stamps and 2. no matter what’s actually in the bill, most on both sides want to be able to claim they’re saving money. Somewhere, some how.

Rural broadband subsidies are small change by Washington standards (tens or hundreds of millions of dollars, depending on the version), but tiny cuts can be turned into big symbols, giving cover to the truly huge programs.

Given the way the process works, we might not know the fate of broadband spending until the farm bill is actually passed. The conference committee’s first meeting was public, but the real negotiations will take place behind closed doors. Once a compromise is reached, the result more or less goes directly to the floor of both houses, and the legislative details might not be publicly available until after the vote.

The timeframe for a decision is uncertain. Because the previous farm bill has largely expired, there’s a sense of urgency, and there’s an expectation of it taking a few weeks, not days or months. But like “small change”, “urgent” has a different meaning in Washington.

Rural broadband on the table as farm bill negotiations resume

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Talks resume in Washington this week.

The future of rural broadband subsidies in the U.S. could be decided at a meeting, currently scheduled for Wednesday, between senators and members of the house of representatives in Washington. The house and senate have passed two very different versions of a bill to reauthorise a trillion dollars worth of farm-related programs. Broadband spending amounts to a small fraction of the total, in either version, so the main attention will be on the big money issues, like food stamps, crop insurance and direct farm subsidies.

The senate’s bill expands rural broadband spending in a couple of interesting ways, allowing the USDA’s Rural Utilities Service to give out direct grants as well as loans and establishing pilot projects to build gigabit networks in rural areas. Broadband providers in rural California would likely benefit from those changes, which are more in tune with broadband business models here, even given the potential problems with implementation.

The house version of the bill makes more radical changes to farm and food stamp policy, but it’s relatively status quo when it comes to broadband. Funding for the loan program would continue at $25 million annually – not much when you consider that’s how much California puts aside for broadband programs every year – and eligibility rules would be tweaked, also similar to changes made here last month.

Cable and telco lobbyists are working as hard in Washington as they did in Sacramento to hamstring funding that might go to potential competitors, so nothing is safe. Another danger is that rural broadband subsidies are small change but often high profile, which could draw the attention of lawmakers looking for symbolic cuts.

Broadband faces another urban-rural divide in Washington

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Is that a city pork or a country pork?

The fate of federal broadband subsidies in rural areas might hinge on a debate going on in Washington over food stamps. Every few years (five or whenever they happen to get around to it…) congress has to reauthorise the massive and complex system for managing and supporting U.S. agribusiness.

The farm bill, as it’s commonly called, has exploded far beyond crop insurance and commodity price supports. With a price tag approaching a trillion dollars, it’s become a vehicle to, among other things, direct federal funds toward rural development and urban social programs. Particularly food stamps, notwithstanding the fact that the program is well used in farm country too.

That urban-rural straddle has kept the dollars flowing for more than fifty years. But there are hints the end is in sight.

The senate passed its version of the farm bill last month, including a hefty helping of cash that, among other things, establishes a pilot program for rural fiber-to-the-home projects. And reauthorises the food stamp program.

That bill bounced back to the house of representatives where it hit a brick wall . Democrats who thought it trimmed too much out of food stamps and republicans who wanted the cuts to go deeper voted defeated it. This stand off could last long enough to let current programs expire and default back to a law passed in 1949.

An alternative that’s been floated this week, though, would split off food stamps and similar programs into separate legislation. Rural broadband subsidies would, in all likelihood, stay with the farm bit of the bill. But losing what amounts to automatic support from urban interests would lead to aggressive horse trading. The end of the grand bargain could mean the end of an easy ride through congress for rural development programs.

Eligibility for broadband subsidies harder to prove under Senate farm bill requirements

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Trail of tiers.

The version of the federal farm bill passed by the senate has problematic requirements for documenting eligibility for the broadband infrastructure grants and loans it authorises. It sets 4 Mbps download and 1 Mbps upload speeds as a minimum. If an area does not have at least one service provider offering that level of service or better, then it’s eligible for construction subsidies, assuming all the other requirements are met.

To prove an area is eligible, though, the lack of service has to be…

(I) certified by the affected community, city, county, or designee; or (II) demonstrated on (aa) the broadband map of the affected State if the map contains address-level data; or ‘‘(bb) the National Broadband Map if address-level data is unavailable.

Certification by local agencies would be the only option in many cases. The California broadband availability map does not have “address-level data”. It reports broadband speeds by census block. I don’t know of any states that get more granular than that. State data collection formats and requirements generally follow the standards the National Telecommunications and Information Agency uses for its national broadband map.

The national map tracks broadband speeds by tiers, e.g. 768 Kbps to 1.5 Mbps, 1.5 to 3 Mbps and 3 to 6 Mbps. Unless the tier definitions are changed and all the data is re-collected – a process that would take years – there’s no way to tell if an area has 4 Mbps down or 1 Mbps up. The map will tell you if speeds are less than 3 Mbps down and 768 Kbps up, but you couldn’t document eligibility if service was a little faster but still less than the 4 Mbps down/1 Mbps up mark.

The bill doesn’t outline a procedure for local certification of broadband speeds. Presumably, those details would be worked out by the Rural Utilities Service, which would administer the program. The national broadband map and state-level mapping programs allow rapid analysis leading to reasonably certain conclusions about eligibility. Not being able to use those tools will add cost and delays to broadband project proposals.

Federal broadband grants would help level the playing field for California projects

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Big state, big farms.

The version of the federal omnibus farm bill that was approved by the U.S. Senate last week improves the chances of actually building broadband infrastructure in areas of California where no service currently exists. That’s assuming the lack of service can be documented and withstand challenges from competing providers who might claim otherwise, which is a separate can of worms.

The legislation, which still has to be approved by the House, allows the Rural Utilities Service (RUS) to give outright grants to pay for broadband projects, in addition to its existing loan program. Adding grants to the mix eliminates a problem faced by rural broadband start-ups: creating a credible business plan that can repay the total cost of construction out of operating revenues.

On a per household basis, it’s expensive to build facilities – particularly the fiber infrastructure that’s needed for the gigabit-class service referenced in the bill – in sparsely populated areas. The challenge is compounded by lower rural income levels that keeps revenue down and operating profits harder to achieve. Reducing the capital overhang – the bill allows up to 50% grant funding for a project – makes a sustainable business case much more achievable.

RUS loans largely go to rural utility cooperatives that have existing customers, capital assets and operational resources to build upon. Those kinds of co-ops, though, are vanishingly rare in California, where agribusiness is not generally based on multitudes of small farms, as in the midwest and south. Deploying rural broadband infrastructure here often requires starting a business from scratch, which usually makes it impossible to meet current RUS loan requirements.

One can argue that the federal government shouldn’t be paying for broadband projects at all. Fair enough. But if congress does decide to subsidise rural infrastructure, it should be in a way that recognises the differences in rural economies across the country.