USDA Unveils $600M ReConnect Broadband Grant & Loan Program

As we informed clients in our August 6 and August 30 e-Lerts, U.S. Department of Agriculture’s (USDA) Rural Utilities Service (RUS) plans to distribute $600 million in grants and loans via a new pilot program for rural broadband in unserved areas lacking access to at least 10/1 Mbps. On December 13, 2018, the USDA announced the program details, including a fact sheet and mapping tool to help interested parties locate eligible areas. USDA has also renamed the program which is now called the Rural eConnectivity Pilot Program or ReConnect.

Below we outline some of the key program rules and, in the coming weeks, we will host a webinar to provide further details about the ReConnect Program. Additionally, JSI is prepared to assist in all phases of the application and funding processes. If you are considering applying for funds, please contact our Maryland office to be added to our ReConnect distribution list. We will provide you with updates about the program, deadline reminders, and other important information.

What Types of Entities Are Eligible:

All types of profit and not-for-profit entities, including rural telcos, WISPs, electric cooperatives, and community broadband providers, are eligible to apply. ReConnect is not restricted to those with experience in providing communications services, so we expect that the competition for funds could be intense. In addition to commercial enterprises, entities eligible to apply include states, local governments, and “any agency, subdivision, instrumentality, or political subdivision thereof.” Territories and tribal authorities can also apply.

What Options are Available for Funding:

The ReConnect Program will have three category options for funding: grant-only, combination 50% grant and 50% loan, and loan-only. Up to $200 million is allocated to each category, and applicants can only apply in one category. Grant-only awards will only be considered in areas where 100% of the households lack 10/1 Mbps. Areas where there is not availability of 10/1 Mbps broadband to 90-100% of households are eligible for grant/loan and loan-only combinations. All three categories require that a minimum of 25/3 Mbps broadband is deployed.

When Applications Are Due:

Applications for the grant-only awards are due by April 29, 2019. The grant/loan applications are due by May 29, 2019. The loan-only applications are due by June 28, 2019, but will be evaluated and awarded on a first-come-first-serve basis, beginning in March 2019.

What Areas Are Eligible:

Unless one of the following exceptions apply, all rural areas where there is less than 10/1 Mbps broadband are eligible for funding:

  • RUS cannot fund more than one project that serves any one geographic area. If RUS receives qualified applications that contain overlapping service areas, RUS will follow certain procedures to determine how those applications will be processed.
  • Entities that have RUS broadband loans (Telecom Infrastructure, Farm Bill Broadband, BIP loans) can apply for funding in areas where they are not currently delivering at least 10/1 Mbps if they have not defaulted on, and have materially complied with, in the sole discretion of RUS, their prior broadband loan requirements. No other entities can apply in these areas.
    • This means that in rate-of-return study areas where the provider is supported by a previous RUS broadband loan, the rate-of-return provider is the only entity that is eligible to apply for ReConnect funds.
  • Areas that should be served via a Community Connect grantee are eligible if they do not have sufficient broadband access, except for those areas where the grants are still listed as “pending.”
    • Many past Community Connect grants were only funded to 4/1 Mbps, so presumably these areas would be eligible for ReConnect funds. If you were a Community Connect grantee at a lower speed requirement, ReConnect might be a good opportunity.
  • Areas that received a 100% grant under the RUS BIP program are eligible if the BIP grantee is not already delivering at least 10/1 Mbps. However, if the applicant is the same BIP grantee, then the applicant may only request a 100% loan. Areas that have received state funding to deploy broadband at a speed of at least 10/1 Mbps are not eligible. As part of the application process, the applicant must provide a map of the proposed funded service area to the appropriate state government office, and the state government office must certify whether funds have or have not been allotted for the area.
  • In areas awarded to CAF Phase II Auction 903 winners, only the auction winner can apply for ReConnect funding, and the winner can only apply for funds from the loan-only funding category.

Stay tuned for more information from JSI about when we will host our webinar and other developments regarding the ReConnect program. For questions about the ReConnect program, eligibility, and the application process, please contact a member of our team by clicking the button below.

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