RURAL DEVELOPMENT Telecommunications Programs

Senator Mark R. Warner Broadband Strategy Session: Maximizing Broadband Deployment in the Commonwealth of Virginia May 21, 2012

David J. Villano Assistant Administrator Telecommunications Program Rural Utilities Service David.Villano@wdc.usda.gov 202-720-9554

The Telecommunications Program

Telecommunications Program History

In the 1930s, the Rural Electrification Administration (REA) made financing available for electric cooperatives and other entities to bring electricity to rural communities that might otherwise not receive it In 1949, the REA received authority to finance telephone service in recognition of its importance to rural communities Funding was provided for basic telephone service to ensure that rural residents and businesses received the same type of services as urban areas Starting in 1995, all telecommunications networks financed were required to be broadband-capable.

Telecommunications Program Organization

Telecommunications Program Staff: National Office staff: Leadership Loan and business specialists Electronics engineers Field staff - General Field Representatives (GFRs) Rural Development State Office Staff: Broadband Coordinators in RD state offices
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RD Telecommunications Program Loan and Grant Programs

Telecommunications Infrastructure Loan Program: Loans to improve and build telecommunications service in rural communities (<5,000 population) Newly expanded funding for E911 Service Rural Broadband Loan Program (Farm Bill): Loans to build and upgrade broadband services in rural high cost areas (<20,000 population) Community Connect Grant Program: Grants for broadband service providers and others who offer broadband services in rural and remote areas (<20,000 population) Distance Learning/Telemedicine Loan and Grant Program: Loans and grants for providing Distance Learning and Telemedicine services to rural residents and anchor institutions 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

Telecommunications Program
FY 2012 Available Funding
2012 Available Funding $690 million $736 million $16.1 million $14.2 million

Program Telecom Infrastructure Loans Broadband Loans Distance Learning and Telemedicine Grants Community Connect Grants

Investment for Broadband in Rural Areas

Current RD Telecom Program Loan Portfolio: $4.5 billion
Approximately $3.8 billion is principal outstanding for Telecom Infrastructure Loan Program borrowers (traditional program) with 487 borrowers $513 million is principal outstanding for Farm Bill Broadband Loan Program borrowers with approximately 73 borrowers The remainder is principal outstanding for broadband funding under the American Recovery and Reinvestment Act of 2009

The 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 215 grants and invested $112 million Communities of 20,000 population or less Application window opened on May 3, 2012 and closes June 18, 2012 Information is available on the website at: http://www.rurdev.usda.gov/utp_commconnect.html How to Apply webinar scheduled for May 24, 2012 8

FY 2011 Demand for Community Connect Grants

$13.4 million was available. 140 grant applications were received, requesting $117 million in funding. $13.5 million in funding was awarded (18 grants).

The Community Connect Grant Program Eligible Applicants

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.

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The Community Connect Grant Program Program Requirements

Can serve only one community that is currently unserved by broadband

20,000 population or less

Minimum grant of $50,000, maximum grant of $1,500,000 15% minimum required matching contribution Project must include a Community Center with 10 computers for public use (at no charge for two years) Free service to Critical Facilities (such as fire station, city hall, police station, etc.) must be provided for two years Must offer basic broadband service to residential and business customers within the proposed service area

Annual competitive grant application process announced through a Notice of Funds Availability published in the Federal Register

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The Distance Learning and Telemedicine (DLT) Grant Program

The DLT Grant and Loan Programs provide rural communities with opportunities to obtain educational and medical services from distant locations utilizing communications technologies. Notice published May 8, 2012; no application window for FY 2012; eligible applications submitted in FY 2011 that were not funded are being considered for FY 2012 funding

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The Distance Learning and Telemedicine (DLT) Grant Program

$465 million in DLT grants and loans have been awarded total.
Serving rural communities of 20,000 or less Minimum grant $50,000; maximum grant $500,000

15% required matching contribution

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The Telecommunications Infrastructure Loan Program

Since 1949, the Telecommunications Infrastructure Loan Program has provided financing for new and improved telecommunications infrastructure in rural communities of 5,000 or less Loan funds may be used to finance telecommunications services in rural areas for: new construction; improvements; expansions; acquisitions (with restrictions); and refinancing (with restrictions) Interest rates are set at current U.S. Treasury rates, depending on loan maturity at the time of each advance. RUS accepts applications for the Telecom Infrastructure Loan Program on a continual basis. All infrastructure financed must be broadband capable.

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The Broadband Loan Program

This program is designed to provide loans for funding, on a technology neutral basis, for the costs of construction, improvement and acquisition of facilities and equipment to provide broadband service to eligible rural communities. The programs goal is to ensure that rural consumers benefit from the same quality and range of telecommunications services that are available in urban and suburban communities. Created under the 2002 Farm Bill and reauthorized under the 2008 Farm Bill. Applications are accepted year-round.

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The Telecommunications Program

Virginia Investment
More than $105 million has been invested in recent years in Virginia Inter Mountain Cable received funding under a Community Connect grant to provide broadband services to Hurley, VA Northern Neck Middle Peninsula Telehealth Consortium received a 2010 Distance Learning and Telemedicine grant to link five rural health clinics on the Peninsula with physicians at the Riverside Tappahanac Hospital and other hospitals in Newport News A 2009 Distance Learning and Telemedicine grant will provide a link between a local community and five schools in Accomack and Northampton counties for distance learning services NTELOS Telephone received funding under the American Recovery and Reinvestment Act (the stimulus bill) to provide broadband services to rural Alleghany County.

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Rural Development RBEG and RBOG

Two programs from USDA Rural Development may also be of interest These are:
Regional Business Enterprise Grant (RBEG) and Regional Business Opportunity Grant (RBOG)

Both grant programs are managed by the Rural Development state offices For more information:
RBEG: http://www.rurdev.usda.gov/BCP_rbeg.html RBOG: http://www.rurdev.usda.gov/BCP_rbog.html

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Rural Development Rural Business Enterprise Grant (RBEG)

The RBEG grant program supports the development of small and emerging private business enterprises in rural areas
Small and emerging business = any private business which will employ 50 or fewer new employees and has less than $1 million in projected gross revenues (can have a business plan to grow larger later)

Eligible applicants include public bodies; private nonprofit corporations; and Federally recognized Native American Indian tribes The end result of the project must finance or develop a small and emerging private business enterprise Eligible rural area definition: any area other than a city or town that has a population of greater than 50,000 inhabitants and the urbanized area contiguous and adjacent to such a city or town according to the latest decennial census Examples of typical grants: incubator centers, facilities and equipment; technical assistance; revolving loan funds; distance learning networks and career training

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Rural Development RBEG continued

Eligible grant purposes:
acquisition and development of land, easements and rights-of-way; construction, conversion, enlargement, repairs or modernization of buildings, etc.; loans for startup operating costs and working capital; technical assistance for private business enterprises; reasonable fees and charges for professional services for the planning and development of the project training, when necessary, in connection with technical assistance rural distance learning program create, expand and operate rural distance learning networks for rural learning programs related to potential employment or job advancement for adult students passenger transportation applicant must be a private nonprofit entity and a nationally qualified organization

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Rural Development RBEG continued

Scoring is based on:
Sustainability of the project Quality of the proposed economic development Amount of leveraged funds Work in priority communities (e.g. areas experiencing natural disaster, closer of major employer, long-term poverty, long-term population decline, and long-term job deterioration)

FY 2012 Funding: $24,318,000 Allocations to state offices Each grant is generally less than $100,000 National Office Reserve Funds generally awarded after June 30 No application window To apply, contact Rural Development state office, the Community Programs director

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Rural Development Rural Business Opportunity Grant (RBOG)

Promotes sustainable economic development that uses local resources Assist rural communities with identifying their needs and taking advantage of available resources and opportunities Focus assistance on priority communities Sponsor best practice economic development activities that are transferable Eligible applicants: public bodies (e.g. state and local governments); nonprofit corporations; Indian tribes; cooperatives with members that are primarily rural residents; institutions of higher education Eligible rural area definition: any area other than a city or town that has a population of greater than 50,000 inhabitants and the urbanized area contiguous and adjacent to such a city or town according to the latest decennial census

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Rural Development RBOG continued

Eligible Use of Funds:
To provide economic development in rural communities by:
Identifying and analyzing business opportunities that will use local resources Providing training to entrepreneurs and managers Establishing business support centers Conducting leadership training

Note: grant funds may not be used to buy or develop real estate or for construction

Scoring is based on:

Sustainability of the project Quality of the proposed economic development Amount of leveraged funds Work in priority communities (e.g. areas experiencing natural disaster, closer of major employer, long-term poverty, long-term population decline, and long-term job deterioration) State Director priority

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Rural Development RBOG continued

Grant application window opens when a Notice of Funds Availability (NOFA) is published in the Federal Register; FY 2012 NOFA is expected to be published soon FY 2012 funding available: $2.25 million Maximum grant size is $50,000 Application period is 60 days Includes a set-aside for American Indian tribes Applications are submitted to the Rural Development state offices; follow instructions in the NOFA

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Telecommunications Program Next Steps

If you are interested in learning more about the Telecommunications programs or other Rural Development programs:
More details on how to apply for individual programs will be presented next by Richard Jenkins, General Field Representative For more information on how to apply to Telecommunications programs, contact Richard and/or visit our website For more information on Rural Development programs, contact the Virginia state office or visit their website Contact information is provided at the end of the presentation

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Top 10 List
10. Do your homework. 9. Know what assistance the State Regulatory commission and the Governors office has available. 8. Surf the Rural Development website/look at success stories/call previous awardees. 7. Talk to the General Field Representative (GFR). 6. Read the Notice of Funding Availability (NOFA) and the program regulation. 5. Read the application guide. 4. Know the deadline and dont miss it! 3. Give us everything we ask for, even if you dont think its applicable. 2. Write the application as if the reader knows nothing about you and the agency. 1. Look at all parts of the application individually and as a whole.

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Contact Information
Telecommunications Program 1400 Independence Ave. Washington, DC 20250 http://www.rurdev.usda.gov/RUSTelecomPrograms.html Telecommunications Program Headquarters Staff:
David J. Villano, david.villano@wdc.usda.gov; Assistant Administrator, 202-720-9554 Jonathan Claffey, jon.claffey@wdc.usda.gov; Deputy Assistant Administrator, 202-720-9556 Mary Campanola, mary.campanola@wdc.usda.gov; Special Projects Coordinator, 202-720-8822 Kathie Klass, kathie.klass@wdc.usda.gov; Senior Outreach Coordinator, 202-720-2284 Peter Aimable, peter.aimable@wdc.usda.gov; Director, Northern Division, 202-720-0806 Norberto Esteves, norberto.esteves@wdc.usda.gov; Acting Director, Advanced Services Division, 202-720-0699 Shawn Arner, shawn.arner@wdc.usda.gov; Director, Southern Division, 202-720-0711 Ken Kuchno, kenneth.kuchno@usda.gov; Director, Broadband Division, 202-690-4673 Craig Wulf, craig.wulf@wdc.usda.gov; Program Advisor, 202-720-8427

General Field Representatives:

http://www.rurdev.usda.gov/UTP_GFRContact.html

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Contact Information Virginia Contacts

Richard E. Jenkins richard.jenkins@wdc.usda.gov PMB 52 3272 Jefferson Street North Lewisburg, WV 24901 (304) 645-1947 (304) 445-5369 (Cell) States Covered: Virginia, West Virginia USDA Rural Development Ellen Matthews Davis, State Director Culpeper Building, Suite 238 1606 Santa Rosa Road Richmond, VA 23229 Voice: (804) 287-1550 Fax: (804) 287-1718

www.rurdev.usda.gov/va/