House Farm Bill Would Require New RUS Broadband Standards
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Thursday, April 12, 2018

House Farm Bill Would Require New RUS Broadband Standards

The House Agriculture Committee today proposed requirements for new broadband speed requirements in projects funding by the Rural Utilities Service.

The proposal was part of the triennial “farm bill,” or Agriculture and Nutrition Act (HR 2) unveiled by committee Chairman K. Michael Conaway (R., Texas).Along with reauthorizing agricultural price supports and the Supplemental Nutrition Assistance Program (SNAP), the bill would address rural development programs such as the various telecom and broadband loan and grant programs administered by the U.S. Department of Agriculture’s Rural Utilities Service.

“Rural areas of the U.S. should have the same access to broadband and infrastructure that urban areas do. The bill authorizes substantial annual appropriations for rural broadband and requires USDA to establish forward-looking broadband standards,” the committee said in a “policy highlights” sheet.

Section 6101 of the proposed bill would require the Agriculture Department to “promulgate a current minimum acceptable standard of broadband service, as well as projections of minimum acceptable standards of service for 5, 10, 15, 20, and 30 years into the future. The section further prohibits the Secretary from making any loan to finance a project that cannot meet the projected minimum acceptable standard of service equal to the length of the loan. This section also allows the Secretary and the applicant to agree to substitute standards if the standards are cost-prohibitive to meet. Finally, it requires the Secretary to require, for the lifetime of the loan, that the project is capable of meeting either the minimum standard currently in effect or the projected standard in place at the time the loan was agreed to,” according to an 86-page “section by section” summary of the bill.

It would add language to the 1936 Rural Electrification Act “that creates a grant program for borrowers under Title I, II, or VI of the Rural Electrification Act who are financing rural broadband projects that provide retail service. The section establishes a density formula used to qualify for certain grant amounts. The section provides that applicants which meet certain maximum density thresholds are eligible for a grant to be an increasing percentage of the total award.”

It would also amend the Rural Electrification Act to require the Agriculture Department to “provide both a direct lending program and a guaranteed lending program to finance rural broadband projects.”

It would also amend the Consolidated Farm and Rural Development Act “to allow a recipient of certain grants, loans, or loan guarantees to use not more than 10 percent of the amount for rural broadband infrastructure projects, including both retail and nonretail activities.”

And it would amend the Rural Electrification Act “to allow a recipient of certain grants, loans or loan guarantees to set aside not more than 10 percent of the amount for retail broadband service. This subsection requires that any funds used for retail broadband service must meet the minimum acceptable level of broadband service.”

It would amend the Rural Electrification Act to “authorize the Innovative Broadband Advancement Program, in place of the Rural Gigabit Network Pilot Program, from 2019 through 2023, [which would provide] grants, loans or both to eligible entities for the purpose of demonstrating innovative broadband technologies or methods of broadband deployment that significantly reduce the cost of broadband deployment. Finally, this section provides for eligibility requirements and prioritization of awarding assistance.”

It would require the department to submit a single report to Congress on all of its broadband financing activities.

It would “permit the Secretary to obligate funds to approved applications while conditioning the disbursement of funds on the successful completion of environmental, historic, or other reviews of the project. Further, it [would permit] the Secretary to deobligate funds if the reviews cannot be completed in a reasonable amount of time.”

It would require the establishment of a single application period per year for the broadband loan program.

It would increase appropriation authorizations for loans and loan guarantees under section 601 of the Rural Electrification Act to $150 million annually from 2019 through 2023.

In a statement, NTCA Chief Executive Officer Shirley Bloomfield said that her association “looks forward to working with the House Agriculture Committee on the recently released Farm Bill. We appreciate the Committee’s focus on ensuring U.S. Department of Agriculture broadband programs are helping meet the needs of rural Americans. In the weeks and months leading up to the release of this Farm Bill, NTCA members welcomed the opportunity to testify before the Committee to share the importance of streamlining the USDA RUS program application process, accounting for ongoing federal broadband efforts, investing for the long-term, and looking to providers with a proven track record of success deploying and maintaining services in rural communities.”

Ms. Bloomfield added, “We thank the Committee for its work and recognition that broadband is critically important to the future of rural America.” —Lynn Stanton, lynn.stanton@wolterskluwer.com

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