Overview of the RUS Telecommunications Loan and

Grant Programs

SAMHSA Health IT Regional Forum, July 2011

Jessica Zufolo, Deputy Administrator

Rural Utilities Service, USDA

Seventy Six Year History infrastructure Seventy Six Year History infrastructure financingfinancing

• RUS is a rural policy, planning and lending agency which provides loan and grant financing to electric, telecommunications, broadband, water and sewer utilities serving rural Americans.

• Celebrating 76 years since the creation of the Rural Electrification Administration and 75 years since the signing of the Rural Electrification Act.

RUS Telecommunications Program Loan and Grant ProgramsRUS Telecommunications Program Loan and Grant Programs• Telecommunications Infrastructure Loan Program: Loans to improve and build telecommunications service in rural communities (<5,000)

• Rural Broadband Loan Program (Farm Bill): Loans to build and upgrade broadband services in rural high cost areas (<20,000)

• Community Connect Grant Program: Grants for broadband service providers and others who offer broadband services in rural and remote areas (<20,000)

• Distance Learning/Telemedicine Loan and Grant Program: Loans and grants for providing Distance Learning and Telemedicine services to rural residents and anchor institutions

• American Recovery and Reinvestment Act of 2009 Broadband Initiatives Program (BIP): Loans, grants and loan/grant combinations for broadband in rural communities [NOW CLOSED]

• Public TV Grants: grants for rural public TV stations for the digital TV transition

• Weather Radio Grants: grants for weather radio systems in rural communities

More than $22 billion invested in rural America since 1949

RUS Telecom Loan InvestmentsRUS Telecom Loan Investments• Current RUS Telecom Program Loan Portfolio: $4.3 billion

– Approximately $3.7 billion is principal outstanding for Telecommunications Infrastructure Loan Program borrowers (traditional program); approximately 487 borrowers

– The remainder consists primarily of $.5 billion principal outstanding for Farm Bill Broadband Loan Program borrowers (approximately 90 borrowers) and $37.9 million principal outstanding for BIP borrowers

Overview of RUS Telecom Loan Overview of RUS Telecom Loan InvestmentsInvestments

– The Telecom loan and grant programs help ensure that rural communities have access to the same or better quality telecom infrastructure and equipment as urban communities

– RUS engineering standards require all plant to be comparable with those in urban areas consistent with section 254 of the Act.

– Since 1996, all Telecom Infrastructure Loan Program-financed networks have been required to have a minimum broadband speed of 1 MB/sec

RUS Telecom Program RUS Telecom Program FY 2011 Program StatusFY 2011 Program Status

• Loan Programs: Telecom Infrastructure Program:

• RUS accepts applications for the Telecom Infrastructure Loan Program on a continual basis.

• All infrastructure financed must be broadband capable.

• Applications are accepted year-round; there is no application deadline

• Broadband Initiatives Program (BIP) Under the Recovery Act:

• $3.5 billion in loans and grants was awarded under this program.

• Broadband projects funded under this program are now being built, in 45 states and one US territory.

Loan Terms for the RUS Broadband Loan Terms for the RUS Broadband Loan program Loan program

• Treasury Rate of interest financing

• Maturity period based on life of facilities

• One year principal deferment

• $100 million maximum loan size

Substantially Underserved Trust Areas (SUTA) ProvisionSubstantially Underserved Trust Areas (SUTA) Provision

in the 2008 Farm Billin the 2008 Farm Bill

• The 2008 Farm Bill contained the SUTA provision that applies to the RUS water, electric and telecommunications infrastructure programs.

• In Telecom, the SUTA provision applies to the Telecom Infrastructure Loan Program, the Distance Learning and Telemedicine Program and the Farm Bill Broadband Loan Program.

• The provision enables the Secretary of Agriculture to make loans as low as 2% and extended repayment terms; grant waivers of non-duplication restrictions; matching fund or credit support requirements; and highest funding priority.

Distance Learning and Telemedicine Grants &Distance Learning and Telemedicine Grants &Community Connect GrantsCommunity Connect Grants

• RUS Grant Programs:

• Distance Learning and Telemedicine Program (DLT):• A Notice of Solicitation of Applications for the DLT Program was announced

on Feb. 24, 2011. Application window closed April 25, 2011.

• Community Connect Grant Program:• A Notice of Solicitation of Applications for the Community Connect Grant

Program was announced on March 4, 2011. Application window closed May 3, 2011.

• A Community Connect webinar was held on March 22, 2011.

The Community Connect Grant Program

The Community Connect Grant ProgramThe Community Connect Grant Program

• A nationally competitive grant program to provide broadband service to the most rural and economically challenged communities

• Since inception, the program has provided 197 grants and invested $98 million

• 20,000 population or less

Community Connect Grant ProgramCommunity Connect Grant Program

• Minimum and Maximum Grant Amounts:– $50,000 minimum

– $1,500,000 maximum

• Applicant’s Minimum Matching Contribution– 15% of grant amount requested

Eligibility for Community Connect Eligibility for Community Connect GrantsGrants

• An incorporated organization,

• An Indian Tribe or tribal organization, as defined in 25 U.S.C. 450b(b) and (c),

• A state or local unit of government, or

• A cooperative, private corporation or limited liability

• A company organized on a for-profit or not-for-profit basis.

• Individuals and Partnerships are not Eligible.

• Applicants must have the legal capacity and authority to apply for funding and enter into a contract with RUS.

2011 Demand for Community Connect 2011 Demand for Community Connect GrantsGrants

• $13.4 million is available for this fiscal year. 

• 140 grant applications were received, requesting $117 million in funding. 

• Field staff are validating the absence of broadband service in the proposed service areas.

• Awards will be made late August.

Eligible ProjectEligible Project

• 1. Offer broadband service to both residential and business customers within the proposed service area;

• 2. Serve one and only one Community (one community per grant);

• 3. Provide free broadband service to the Critical Community Facilities in the community (e.g., hospitals, schools) for at least two years; and

• 4. Provide a Community Center with at least 10 Computer Access points within the proposed Service Area and make broadband service available therein, free of all charges, for at least two years.

Distance Learning/Telemedicine Grant Distance Learning/Telemedicine Grant ProgramProgram

The DLT Grant and Loan Programs provide rural communities with opportunities to obtain educational and medical services

from distant locations utilizing communications technologies.

•$403 million in DLT grants and loans have been awarded total.

•Last year, USDA awarded $35 million in DLT projects across 39 states.

•Maximum award was $500k per application.

2011 Applicant Demand for DLT 2011 Applicant Demand for DLT GrantsGrants

• $24.9 million is available for FY 2011.  • 209 applications were received from 44 states and one

territory, with $61.5 million in grant funds requested.  • Program staff are reviewing apps and field staff are

validating application information.  • Awards will be made in late September

Distance Learning/Telemedicine GrantsDistance Learning/Telemedicine Grants

Program Requirements

• Serving rural communities of 20,000 or less

• Min grant $50,000, Max grant $500,000

• 15% required matching contribution

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DLT Grant Program WebpageDLT Grant Program Webpagewww.rurdev.usda.gov/UTP_DLTResources.html

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DLT Grant Program – Eligibility and PurposeDLT Grant Program – Eligibility and Purpose

•Deliver or propose to deliver distance learning or telemedicine services for the term of the grant.

•The purposes must meet the grant definition of distance learning and telemedicine. Focus on sustainability.

•No planning studies, research projects, or short-term demonstration projects.

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Applicant Eligibility Con’tApplicant Eligibility Con’t

• Corporation or a partnership; tribal nation or organization a state or local unit of government; a consortium; or other legal entity. For or not-for profit able to contract with the US Government. No individuals or sole-proprietorships.

• Operate a rural community facility or deliver DLT services to entities that operate a rural community facility or to residents of rural areas at rates calculated to ensure that the benefit of the financial assistance passes through to such entities or to residents of rural areas.

DLT Grant Program – Definitions and PurposeDLT Grant Program – Definitions and Purpose

DLT Grants are not just a way to obtain educational technology or medical equipment.

The focus is on using the unique capabilities of telecommunications to connect rural areas to each other and to the world, thus overcoming the effects of

remoteness and low population density.

Distance learning means a curriculum delivered via telecommunications and stresses the connection of students and teachers at remote sites.

Telemedicine means the delivery of health care from medical professionals at one site to patients at other sites via telecommunications. Telemedicine shows benefit to rural residents either in reduced travel or access to services.

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DLT Grant Program - Project and Budget DLT Grant Program - Project and Budget EligibilityEligibility

1. Eligible Equipment - This list is not exhaustive and does not convey automatic eligibility. To be eligible in full, items must be primarily for DLT eligible purposes. Audio and video equipment

Computer Hardware and SoftwareComputer network componentsTerminal equipmentData terminal equipment Interactive audio/video equipment OEM or OEM authorized warranties on eligible equipment up to the 3 year life of the grantInside wiring

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Jessica Zufolo, Deputy AdministratorRural Utilities Service,

USDA Rural DevelopmentJessica.Zufolo@wdc.usda.gov

http://www.usda.gov/rus/telecom