BIP Quarterly Report 3 Issued 11-17-2009

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Quarterly Report to Congress released by the Rural Utilities Service (RUS) of the U.S. Department of Agriculture. It reports on quarterly program actions within the agency's Broadband Initiatives Program (BIP). RUS is the agency with the Department of Agriculture that manages Ag.'s component of the $7.2 billion broadband stimulus program within the Recovery Act, officially called the American Recovery and Reinvestment Act of 2009 (ARRA). Release date: 11-17-2009.
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  Broadband Initiatives Program (BIP)Quarterly Program Status ReportSubmitted toThe Committee on AppropriationsUnited States SenateThe Committee on AppropriationsUnited States House of RepresentativesNovember 17,2009 USDA Rural DevelopmentRural Utilities Service Executive Summary The RuralUtilities Service (RUS) is pleased to provide a quarterly statusreport to Congress on the BroadbandInitiatives Program (BIP) established under the AmericanRecoveryand Reinvestment Act of2009 (Recovery Act). The Recovery Act authorizes RUS to issue grantsand loan awards to fund the deployment and construction of new broadband systemsunder theBroadband Initiatives Program (BIP).This report focuses on key steps RUS has taken to advance the directives established byCongressintheRecoveryAct,includingtherelease of thefirstNotice of FundsAvailability(NOFA);public outreach to increase participation among all eligible entities;preparations to accept, evaluate,and advance applications; and improve organizational readiness toaccommodate the level of demand among applicants for the first round of funds.As requested by Congressand the White House, RUS is coordinating closelywith other Federal agencies to enhance the current level of broadband access available nationwide. Since theenactment of the Recovery Act inFebruary 2009,RUS has worked jointly with the National Telecommunications and Information Administration (NTIA)and the Federal CommunicationsCommission (FCC) to leverage core competencies and program resources to achieve theAdministration'sobjectives for economic recovery and job creation. RUS intends thatAmerica's rural residentswill be the ultimate beneficiaries of these efforts.Consistentwith this coordinated effort,RUS and NTIA streamlined their respective program requirements and provided applicants with one joint application This portal may be used by applicants and all interestedparties to apply for funds and obtaininformation about both programs.  RUS and NTIA have allocated approximately $4 billion of program level funding for the firstround. Upon the completion of first round funding, the remaining funds will be made availableunder subsequent Notices of Funds Availability (NOFA).Up to $2.4 billion in deliverable BIPprogram level funds of the estimated $7 to $9 billion total that will be available maybe awarded in the first funding round.The first NOF A established a window for BIP and Broadband Technology OpportunitiesProgram (BTOP) applications from July 14,2009, through August 14 ,2009. As a consequence of unanticipated demand and latency issues associated with the intake system,both NTIA andRUS chose to extend the deadline until August 20 for those entities that had begun theapplication process by the srcinal deadline of August 14, 2009.RUS has employed a two step application process that is designed to determine the eligibilityand feasibility of each project proposal under review.The information provided by theapplicants in step one will be evaluated for completeness and eligibility. Applicant proposalswill then be ranked based on the scoring criteria described in the NOF A. Those applicants withthe highest scores are invited to participate in the second step. The two-step process is intendedto reduce the cost and burden to applicants.Data provided by applicants that move to step two are submitted to a due diligence process thatrequire additional details on the application. On October 12,2009,RUS moved 18 applications into step two and expects to move additional qualified applications on a rolling basis in thecoming weeks. The goal is to reach our program potential and continue to make awards to meetthe level of funding RUS has been authorized to obligate on or before September 30,2010. To date,RUS has initiated and completed numerous milestones in the execution of the BIPprogram,including the development of the program itself,implementation guidelines, publication of theNOFA,development of outreachand guidance,conclusion of the initialphase of the application process, evaluating applications, and moving them to step two for furtherevaluation and awards. As a consequence of unanticipated demand and subsequent review of theapplications,RUS expects to issue awards in December.In October,RUS and NTIA concluded,following extensive review of the process and results of the first NOFA, that only one additional NOFA rather than two is necessary to achieve theprogrammatic goals and funding objectives outlined by Congress and the Administration.Recently,the Government AccountabilityOffice testified before the Senate Committee on Commerce,Science, and Transportation and similarly recommended that both RUS and NTIA issue only one additional NOF A. Our mutual goal is to allow applicants more time to developand submit viable applications.RUS and NTIA will publish a second Request for Information (RFI) in the coming weeks. TheRFI will solicit public comment on the results of the first NOF A, issues with the application andprocess,and suggestions for the next NOF A. We expect to conclude the period for publiccomment 21 days from the date of publication in order to allow us sufficient time to design,publish, and implement the second NOF A. 2  I. Introduction and Background Section 6001 of the Recovery Act authorizes NTIA to establish the Broadband TechnologyOpportunities Program (BTOP) and RUS, under the Broadband Initiatives Program (BIP), tomake grants and loans for the deployment and construction of broadband systems.BIP establishes a loan,grant, and loan/grant combination program designed to increasebroadband penetration and adoption primarily in rural areas to foster rural economicdevelopment. In addition to providing greater availability of broadband services, the $2.5 billionin budget authority provided under the Act is also intended to create jobs and stimulate economicgrowth in the short and long term.This status report reviews developments since RUS's second quarterly report. Informal briefingsto Congress, as well as appearances at Congressional hearings, will complement these quarterlyreports. II. Summary Since the passage of the Recovery Act, RUS has implemented a plan to ensure that BIP funds aredistributed quickly, efficiently, and in accordance with the provisions of the Act. In the secondquarterly report, RUS outlined the initial procedural and administrative steps taken to launchBIP.This report focuses on additional key steps RUS has taken to effectively advance the directivesestablished by Congress in the Recovery Act, including: 1) accept and perform preliminaryapplication screening for eligibility; 2) post all applications for public review and incumbentcomment; 3) post all proposed coverage area maps for public review and comment; 4) determinethat 18 applications qualify to move to step two, the verification phase; 5) inform Step twoapplicants selected to respond within the 30-day mandatory response period; and 6) develop aRFI to assist in writing the second Notice of Funds Availability (NOFA). III. Notice of Funds Availability On July 1, 2009, Vice President Joseph Biden, Secretary of Agriculture Thomas Vilsack, andSecretary of Commerce Gary Locke announced the release of the first NOFA describing theavailability of funds and application requirements for BIP and the NTIA's BTOP programs. TheNOFA, published in the Federal Register on July 9, 2009, provides detailed informationregarding eligibility, definitions, award terms, application submission, evaluation and selection,and award administration that will guide the disbursement of BIP funding in the first round.RUS and NTIA also unveiled a shared Web -to provide all of therelevant information regarding BIP and BTOP funds to the public and to accept applications. 3  Approximately $4 billion of program level funding was allocated to the initial round of fundingby RUS and NTIA. The requirements for a subsequent NOF A may differ from the current noticeto address public and industry comments received as part of the Recovery Act assessmentprocess and to focus the funding opportunities in areas where the needs are the greatest. Up to$2.4 billion of the estimated $7 to $9 billion that will be available in BIP program level fundswill be awarded through the first funding round.The size of the grant portion of any loan/grant combination award is determined by review of information provided by the applicant but cannot exceed the amount of the loan portion, exceptfor awards that fund remote unserved areas. In general, RUS favors applications that request ahigher percentage of loan-to-grant funds in order to expand service to the largest number of ruralcommunities; however, RUS also believes that in some cases to reach the most unserved areas,grant-only awards are necessary.Throughout the implementation of BIP, RUS will strive tobalance these two compelling challenges.The Recovery Act establishes the rapid disbursement ofthe funds as a priority for BIP.However, the program also must be properly administered to ensure responsible use of publicfunds. To balance these objectives, RUS staff will favor the funding of projects that can startpromptly and demonstrate technical and financial feasibility, organizational capacity, andalignment with other Administration priorities. A commitment to transparency in the awardprocess and rigorous reporting requirements will help ensure accountability. Of the approximately $2.4 billion in RUS program level funding made available for the firstround, the July NOFA subdivided the funding as follows:(a) Up to $1.2 billion was available for Last Mile projects, of which up to $400 millionwas made available for grants for remote area projects and up to $800 million was madeavailable for loans or loan and grant combinations for non-remote projects.(b) Up to $800 million was available for loans or loan and grant combinations for MiddleMile projects.(c) Up to $325 million was allocated to a national reserve which could be applied to anyother category of funding if, after evaluating the applications, RUS believes appropriateand consistent with the intent of the Recovery Act.Any funds not used in the first round will be rolled into the next NOF A. RUS anticipatesreleasing another Request for Information (RFI), in collaboration with NTIA, in which we willsolicit public comments before the next NOFA. Some of the most common areas RUSanticipates comments are: I) the definition of remote rural areas; 2) further streamlining theapplication and mapping processes; 3) ways to encourage applications from Indian Country andother unserved applicants;4) non-discrimination and interconnect requirements; and 5) thedefinitions of underserved and unserved areas. We anticipate that this process will begin inthe near future.4
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