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NTIA, RUS Create Application Process, Define Terms for Allocating Broadband Funds

The government will allow private companies to bid for BTOP money and has defined broadband as 768 kbps downstream, 200kbps upstream, according to just-released guidelines for broadband stimulus funds.

The open access conditions will mirror the FCC's four Internet openness principles, and will be enforced, said senior government officials by both the grant-makers and the FCC, where applicable.

The government will give applicants extra points for exceeding what it is defining as baseline broadband speed, and for exceeding minimum requirements for nondiscrimination and interconnection, including prominently displaying those nondiscrimination policies.

Senior government officials also said they considered that speed a baseline and expected and would encourage applications with higher speeds.

Public Knowledge liked the sound of the openness conditions. "We are pleased that the requirements for the broadband grant program include strong non-discrimination and interconnection conditions so that some lawful Internet content and applications are not favored over others," said Public Knowledge President Gigi Sohn. These conditions will help consumers and create vitality in the services created by the program.

That was some of the big news Wednesday from the release by the National Telecommunications & Information Administration (NTIA) and the Ag Department's Rural Utilities Service (RUS) of the long-awaited Notice of Funds Availability (NOFA) and attendant guidelines for doling out $7.2 billion in broadband economic stimulus money.

NTIA and RUS have created a two-step application process and will start out by handing out $4 billion collectively, according to a copy of the NOFA supplied to B&C/Mult. RUS money will go to un-served areas, while NTIA money will go to both un-served and underserved areas.

Un-served area is defined as "one or more contiguous census blocks where at least 90 percent of households in the proposed funded service area lack access to facilities-based, terrestrial broadband service, either fixed or mobile, at the minimum broadband transmission speed (set forth in the definition of broadband above). A household has access to broadband service if the household can readily subscribe to that service upon request."

Underserved is a little more complicated, but it includes not only people who can't get the service, but those who don't take the service they have access to.

It is defined as: "one or more contiguous census blocks meeting certain criteria that measure the availability of broadband service and the level of advertised broadband speeds."

Those criteria differ depending on whether the service is a so-called middle mile backbone project or the last mile project that reaches individual homes. Underserved last-mile projects, said the NOFA,
are defined as areas that meet at least one of the following criteria: "[N]o more than 50 percent of the households in the proposed funded service area have access to facilities-based, terrestrial broadband service at greater than the minimum broadband transmission speed; [N]o fixed or mobile broadband service provider advertises broadband transmission speeds of at least three megabits per second ("mbps") downstream in the proposed funded service area; or 3. [T]he rate of broadband subscribership for the proposed funded service area is 40 percent of households or less."

For middle-mile projects, underserved is defined as having "only one interconnection point that terminates in a proposed funded service area that qualifies as unserved or underserved for Last Mile projects."

There will be a separate NOFA for states to apply for money for broadband mapping.

Bids can be submitted starting July 14 and the window closes Aug. 14.  Finalists will be selected by Sept. 15, at which time input from states would be solicited on those finalists. That suited those state officials at the Natoinal Association of Regulatory Utility Commissioners (NARUC) just fine.

"NTIA and RUS are to be commended for recognizing the important role States can play in efficiently disbursing the ARRA broadband funds," NARUC said in a statement. "The Notice of Funding Availability gives States the opportunity to provide a recommendation that ranks pre-screened applications with the goal of prioritizing specific projects with individual States' needs. This will allow States, who have the local knowledge and geographic expertise, the opportunity to help target and expedite release of these important funds."

NTIA got $4.7 billion in grant money, while the RUS got $2.5 billion in grant and loan money, both as part of the economic stimulus package's Broadband Technology Opportunities Program (BTOP).

NTIA is putting up $1.6 billion to start with, while RUS says its combination of grants and loans will total $2.4 billion in buying power.
The government must disburse all the funds the money out by the end of the year and must be finished disbursing it by September 30, 2010. It plans to hand out initial grants by the end of this year, dividing up the process into three tranches of funds.

All the projects are to be "substantially complete" by Sept. 30, 2012. The goal is both to get Internet to all citizens and generate jobs and economic growth in the process.

The funds have not been sufficient to draw a lot of attention from large cable or telco companies,
though government officials have increasingly begun referring to it as a down-payment on the future.

Cable and telcos have been concerned that the government will use that down payment to underwrite competition to incumbents rather than focusing on the 8% of the country without access or on encouraging adoption by the 40% or so of people who could get broadband but don't for a variety of reasons, including economics, lack of computer skills or access to computers, and concerns about content and privacy.

While the sum may be small in stimulus terms, the broadband issue is high on the list of Obama
Administration priorities given its implications for virtually every sector of the economy, from
health and energy to education and government services.

Separately, the FCC, which consulted with NTIA and RUS on the guidelines, has to present a national broadband rollout plan to Congress by Feb. 17 of next year.

The unveiling of the guidelines coincided with a rural broadband event at a school in Erie, PA,
attended by Vice President Biden and top cabinet and agency officials including Commerce Secretary Gary Locke and FCC Chairman Julius Genachowski.

At the Erie event, Vice President Biden called the funding "a first step toward realizing President Obama's vision of a nationwide 21st-century communications infrastructure - one that encourages economic growth, enhances America's global competitiveness and helps address many of America's most pressing challenges."

He also announced that Commerce and USDA would be hosting workshops on the grant programs this month in Boston; Los Angeles; Memphis; Minneapolis; Albuquerque; Charleston, W.Va.; Lonoke, Ark.; Birmingham, Ala.; and Billings, Mont.