Tag Archives: farm bill

Second round of RUS broadband subsidies opens, as California waits for something – anything – from the first round

by Steve Blum • , , , ,

Usda eligibility map 31jan2020

Correction: The yellow blobs on the map above are not pending ReConnect grants, they are pending rural telco applications, which are also administered by RUS. So California is still a great big zero for ReConnect grants and/or loans. Thank you to a Gentle Reader for gently pointing that out. The text below has been updated accordingly.

The federal agriculture department’s Rural Utilities Service began accepting applications on Friday for $600 million in broadband infrastructure subsidies, via its ReConnect program. The money is split three ways – $200 million each for grants, loans and grant/loan combinations. To be eligible, a community (or any geographic area, large or small) has to 1. lack broadband service at a minimum of 10 Mbps download and 1 Mbps upload speeds, and 2. be rural, as the term is defined by the federal government. Subsidised infrastructure has to be capable of delivering at least 25 Mbps down/3 Mbps up speeds.

Those speed benchmarks are below the ones adopted on Thursday by the Federal Communications Commission. The FCC’s Rural Digital Opportunity Fund program sets 25 down/3 up as the threshold for subsidy eligibility, and offers significant incentives for building infrastructure that supports service above that level, all the way up to gigabit class speeds.

Applications for the first round of ReConnect grants and loans, submitted last year, are still being evaluated. There are a couple of rural telephone companies with pending applications from another RUS program in California – Sierra Telephone, east of Merced and Ponderosa Telephone, north and east of Fresno, both in the Sierra. Ponderosa is also applying for an area in eastern San Bernardino County, along the Nevada border.

But so far, the ReConnect program hasn’t done anything for California. The federal agriculture department has been sending out press releases trumpeting broadband subsidies awarded in other states, but no mention of California. A spokesman for the department said that none are imminent.

Part of the reason is the way the federal government defines “rural”. The definition is largely based on proximity to population centers, of a size – 20,000 to 50,000 people – that would be a major city in, say, Kansas but a smallish town in rural California. That problem is compounded by the crude way the federal agriculture department cuts and maps eligibility data – both broadband availability and population clusters.

Half a gigabuck offered for federal rural broadband subsidies, but California faces challenges

by Steve Blum • , , , ,

Rus reconnect eligibility map yolo 12dec2019

Another round of broadband infrastructure subsidies is on the way from the federal agriculture department. A six week application window for the Rural Utilities Service’s (RUS) Reconnect program opens on 31 January 2020, with $512 million on the table.

It appears that the problems with the ReConnect program that shut California out of the first round of grants and loans earlier this year haven’t been fixed. On the face of it, the basic eligibility criteria are pretty simple…

90 percent of the proposed funded service area must not have sufficient access to broadband. Applicants must propose to build a network that is capable of providing service to every premise located in the proposed funded service area at the time the application is submitted at a speed of 25 Mbps downstream and 3 Mbps upstream.

So what is “sufficient”?

Sufficient access to broadband means any rural area in which household have fixed, terrestrial broadband service delivering at least 10 Mbps downstream and 1 Mbps upstream. Mobile and satellite services will not be considered in making the determination of sufficient access to broadband.

So far, so good. All you need to do is document a lack of broadband service at 10 Mbps download and 1 Mbps upload speeds and the money is yours, right?

Wrong.

Although it’s not required by the rules – new or old – RUS publishes data showing what’s eligible and what’s not, and that’s that. There’s no established process for making your own eligibility case, or to point out the demographic, geographic and economic differences between California and, say, Kansas or Alabama. In the past, RUS’s mapping has been crude. This time around, they’ve published a new data set. I haven’t crunched it yet, so I can’t say whether or not it’s an improvement, but a quick look at their map – an example is above – shows that big chunks of rural California are still considered off limits.

Even so, the devil will be in the details. Stay tuned.

Experience and expertise give ISPs an edge in hunt for federal rural broadband subsidies

by Steve Blum • , , , ,

Salinas ag tech summit 13jul2018

The federal agriculture department’s ReConnect program is new. It supplements an older program that wasn’t much use in California. We’re hopeful this new version will be better for us. But we won’t know until we see results. Grant money will be awarded on a competitive basis, with the first grant application deadline last month, and windows for grant/loan combinations and pure loans coming up.

On paper, it’s easier for Californian projects to qualify – e.g. projects submitted by private, for profit ISPs, which we have, as opposed to co-ops and similar, which we don’t so much. USDA grant applications are different from what we’re used to with California Advanced Services Fund (CASF) grants. The application requirements tend to be more technical, and the review more objective.

Sometimes that’s good, sometimes not.

When an Internet service provider asks me if they should apply, I have three gating questions:

  • Do you have GAAP compliant financial statements? Not can you put them together if you had to, but could you give those to me right now if I asked?
  • Do you have someone in your organisation with a four-year engineering degree?
  • Have you applied for a federal telecoms grant in the past?

If the answer to all three questions is no, then you’re going to have a harder time meeting the application requirements. The USDA isn’t big on do-overs. They run applications through an initial screening – which is partly automated – and kick out the ones that aren’t up to spec in their judgement.

So the companies and other organisations that have been successful in the past have been the ones that submit financial and technical detail that complies with USDA’s standards. Qualified accountants and engineers have a significant edge. Some organisations have people who perform at that level without the qualifications, but that’s not the way to bet.

Experience also matters. The ones who win grants tend to be the ones who have learned to play the game. The odds of success on your first go-round are lower, but once you climb the learning curve, your chances increase. If you’re looking at this as a one-off opportunity, I wouldn’t be optimistic. But if you look at it as something that you’ll develop as part of your business model for the long term, then I think it’s worth the effort.

Eligibility, application details for $600 million rural broadband subsidy program released

by Steve Blum • , , , ,

Salinas valley field

Rural broadband grant money will go to areas where 100% of homes do not have access to sufficiently fast service, which is defined as 10 Mbps download and 1 Mbps upload speeds from a wireline or fixed wireless provider. Mobile and satellite service don’t count. If a mix of grant and loan is applied for, then only 90% of the homes have to be unserved at that level.

The federal agriculture department rolled out its new ReConnect program in a webinar yesterday, and filled in a lot of the details about what sort of areas are eligible, which will score higher than others, and who can apply for the $300 million in grants and $300 million in loan money approved by congress earlier this year.

Grants will go to applicants who score the most points on the program’s grading scale. The fewer people per square mile and the more farms served, the more points a project gets. The points max out at 6 people or fewer per square mile and 20 farms served. Serving businesses, schools, health care and other critical facilities, and tribal lands also rate higher.

Faster speeds are better. The minimum service speed for subsidised projects is 25 Mbps download/3 Mbps upload, but proposals that promise a symmetrical 100 Mbps to every home and business in the project area will score the best.

For the most part, the program will avoid spending money in areas that received broadband subsidies from either state or federal sources.

One question left unanswered – and I asked it – is whether communities where the Federal Communications Commission’s Connect America Fund (CAF–2) is paying incumbent telephone companies to upgrade service to the 10 Mbps down/1 Mbps level (areas where CAF–2 subsidies were auctioned off are explicitly ineligible, though). Those build outs are not yet complete, and not all homes and businesses in a given community are subsidised, so it’s possible that some areas earmarked for CAF–2 money would lack sufficiently fast service and, presumably, be eligible.

Pretty much any organisation other than a sole proprietorship or simple partnership can apply, including local governments, cooperatives and non-profit corporations. There is one catch: either the applicant, or the applicant’s parent company, has to have been in business for at least two years. Start-ups need not apply.

States with better broadband programs will get a boost, too. Extra points go to projects in states that have a broadband development plan, that don’t keep utilities out of the broadband business and streamline permit and environmental clearances.

One intriguing hint was dropped during the webinar. The program managers are anticipating a second round of funding after the initial money is spent. It’s possible that another deal could be cut as part of a federal budget package – that’s where the $600 million came from. But it seems likelier that the new money will come from the $1.7 billion earmarked for broadband grants and loans in the recently passed farm bill.

The fun is only beginning.

Rural Utilities Service, funding opportunity announcement and solicitation of applications, ReConnect broadband grant and loan program, 14 December 2018.

I’m collecting documents regarding this program here.

$600 million federal rural broadband subsidy program launches, grant applications due in April

by Steve Blum • , , , ,

Salinas ag tech summit 13jul2018

The federal agriculture department will be handing out $300 million in broadband upgrade grants, and making another $300 million in loans next spring. It’s the result of a new rural broadband subsidy program that was included in a massive federal budget bill earlier this year. The (sparse) details were announced on Thursday, the day after the federal farm bill was passed by congress.

The ReConnect program, as it’s called, has a lot in common with the 5 year, $350 million per year broadband subsidy funding in the farm bill. Including one important new feature: grants are available, in addition to loans. In the past, most of the broadband development money managed by the agriculture department’s Rural Utilities Service (RUS) was given out as loans. It’s a funding model that works well for established rural service providers, such as electric or telephone cooperatives, but it’s not so useful for new market entrants.

Another similarity is speed standards. The money is targeted at communities that lack “sufficient access to broadband service”, which is defined as 10 Mbps download and 1 Mbps upload speeds. That’s disappointing – although it’s better than what cable and telco lobbyists bought sold at the California capitol, it’s significantly slower than the 25 Mbps down/3 Mbps up that the agriculture department uses as the minimum necessary residential broadband service level for other purposes, and nowhere near the 100 Mbps down/20 Mbps up speeds that rural homes and business actually need.

The good news is that any broadband infrastructure built with money from the ReConnect program has to be capable of delivering service at speeds of 25 Mbps down/3 Mbps up. The farm bill goes one step further by requiring subsidised infrastructure to be future proof, at least to a degree.

A proposed project area is eligible if 90% of the homes don’t have access to that level of service. The project area also has to be in a rural area, but that’s generously defined: any city with 20,000 people or fewer, or any urbanised area next to a city with 50,000 or fewer people is eligible.

That limit could change. The farm bill raises the population limit for cities to 50,000 people, and that language might end up applying to the ReConnect program as well. It’s just one of the many details that still have to be worked out. The general outline of the program was published on Thursday, but the application and other detailed requirements won’t be available until February.

The deadline for grant applications is 29 April 2018, with grant + loan and loan-only proposals due later, on 29 May and 28 June 2018, respectively.

Lots of fiber in federal farm bill, and it’s not just hemp

by Steve Blum • , , , ,

Hemp

A five year farm bill with billions of dollars set aside for improving broadband infrastructure in rural areas is heading for president Donald Trump’s desk. Negotiators from the federal senate and house of representatives cobbled together a compromise bill earlier this week, and the house gave it a final blessing yesterday. It keeps most of the pro-broadband development provisions in earlier drafts.

The bill also legalises hemp production – the roping, not the doping kind.

The conference report is more than 800 pages long, and until I get through it all in detail I’m not going to try to figure how much broadband money is actually in it. One provision sets aside $350 million a year for five years for just a couple of programs. And there are several more that deal with broadband, directly or indirectly.

What’s clear from a quick read, though, is that rural representatives aren’t buying the nonsense pushed by AT&T and other monopoly telcos (and swallowed hook, line and sinker by the Federal Communications Commission) that 10 Mbps download and 1 Mbps upload speeds are adequate. Although that’s the level that at least some of the new rural grants and loan programs will use to determine eligibility – i.e. if a community has that level of service, it wouldn’t be eligible for subsidies – any infrastructure built with that money will have to do better. The bill sets the minimum speeds for new service at 25 Mbps down/3 Mbps up, and the agriculture department will have to look ahead and raise the bar as necessary to meet “projections of minimum acceptable standards of service for 5, 10, 15, 20, and 30 years into the future”.

That’s true even if it means a do-over in some places…

The [congressional negotiators] are acutely aware of the challenges created by the ever-increasing bandwidth needs of applications running over the Internet. These bandwidth needs mean that the expectation for “broadband-quality service” in urban, suburban, and rural communities increases over time. While protecting project areas provided assistance from a competing USDA-assisted project is essential for program integrity, such protections can result in a lack of further investment in rural broadband systems and rural residents receiving levels of service which degrade relative to expectations over time.

In establishing the broadband buildout speeds, the [congressional negotiators] intend the [federal agriculture secretary] establish requirements for applicants to build systems capable of providing higher quality broadband service as the term of assistance lengthens, to help to ensure that USDA-financed broadband systems are able to meet the connectivity needs of rural residents for the entirety of the length of time such system is protected from overbuilding under USDA’s broadband programs.

The bill allows spending on middle mile projects, which are particularly needed in rural areas where wholesale connections to major Internet hubs, like Silicon Valley, are at best prohibitively expensive but often unavailable at any price.

It’s welcome relief for rural Californians. The forward looking standards and the wholistic view of necessary broadband infrastructure is a stark contrast to the California legislature’s decision last year to lower the minimum acceptable broadband standard to 6 Mbps down/1 Mbps up and tightly restrict middle mile funding. The millions of dollars – $1.3 million in the past legislative session alone – that AT&T, Comcast, Charter, Frontier and other incumbents have paid to California legislators produced results in Sacramento. They hand out even bigger bags of cash in Washington, D.C., but fortunately rural interests count for a lot more there.

Federal farm bills crank up broadband speed, options

by Steve Blum • , , , ,

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

by Steve Blum • , , , , ,

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

by Steve Blum • , , , ,

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

by Steve Blum • , , , ,

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.