Politics and Technology

While visiting Denver’s Museum of Nature and Science this week, President Obama signed the truly historic “American Recovery and Reinvestment Act.” For the telecom industry, as well as other sectors of the economy, the Recovery Act presents the opportunity for obtaining billions of dollars of grants and loans and delivering jobs and hope to the economy. For the telecom industry, $7.2 billion in grants, loans, and loan guarantees are targeted for broadband projects in the next 22 months. The opportunities are open to all sectors of the industry, not just service providers: equipment vendors, systems integrators, education entities, and wireless and wireline carriers. To complicate matters, governmental entities — towns, municipalities, public safety agencies, and state governments are permitted by the law to compete with private industry for the grant money.

 

The broadband recovery funds will be distributed in main part by two agencies: the Department of Commerce’s National Telecommunications Industry Agency (NTIA) will handle $4.7 billion and the Department of Agriculture’s Rural Utility Service (RUS) will distribute $2.5 billion. There are a few guiding principles for obtaining the winning bids:

 

 

Another key aspect of the Recovery Act is that NTIA has an obligation to “consult” with the states regarding the broadband projects. State input will frame NTIA’s requests for proposals.

 

Following President Obama’s commitment for increased transparency in government, the administration appears committed to providing the same information to all applicants large and small by using Web sites. For example, the Obama administration created a Web site for the bill itself located at Recovery.gov. NTIA and RUS will maintain Web sites with current information for all participants. The Recovery Act requires Assistant Secretary of Commerce for Communications and Information to create a “Broadband Technology Opportunities Program.” It is assumed that the program will use the processes established by the existing NTIA “Technical Opportunities Program” (TOP). NTIA has not yet updated the NTIA TOP Web site regarding the awarding the grants immediately after the signing of Recovery Act.

 

The Recovery Act delegates broadband-related spending in three sections. Title II, entitled the “Broadband Technology Opportunities Program,” authorizes the expenditure of $4.7 billion in grants funding to be awarded by Commerce’s NTIA. The purpose of the competitively awarded NTIA grants is to:

 

 

Thus, proposing grants a) in tandem with the needs of the state and “strategic institutions” such as hospitals, schools, or public safety and b) which will “create jobs,” will be the key to winning grant proposals.

 

The Recovery Act’s Title IV (Sec. 6001) sets forth the requirements for the NTIA BTOP grants, specifying eligible entities and suggesting “timing” or “Requests for Proposals” to be presented to by NTIA to the public. These RFPs will clearly require input from each state and “one” grant is mandated to be provided in each state. While eligible entities include non-governmental and non-profit entities, these companies must be found by “rule” to be “in the public interest.”

 

In addition, net neutrality obligations are contained in the Recovery Act. Grants provided must be subject to NTIA-determined “non-discrimination and network interconnection obligations” which “at a minimum” must follow the FCC’s (News - Alert) non-discrimination policy. Grants may be provided for a wide range of equipment and services including education of broadband subscribers. The Act specifically mandates four categories of expenditures:

 

 

Title I, of the Recovery Act, “Agriculture, Rural Development, Food and Drug Administration and Related Agencies,” authorizes $2.5 billion in loans and loan guarantees for the “Distance Learning, Telemedicine, and Broadband Program” which is less than the $2.85 billion requested by the House and more than the $1 billion proposed by the Senate. The loans will be granted and delivered through the RUS loan program. Applicants are required to be “shovel ready” and to use the funds in such a way that 75% “of the area” served includes rural areas without sufficient access to broadband service that could “facilitate rural economic development.” Current and prior RUS borrowers will be given priority. It is clear that the agency has broad interpretive authority to determine the identification of these “rural areas.”

 

Finally, an added plus for broadband deployment, Title VII, authorizes the Department of Labor’s Employment Training and Administration, to deliver $250 million in grants for training employees for “high growth and emerging industry sectors.” The Conference Report (H 1422) expressly included “training for wireless and broadband deployment” as an eligible activity for high growth training grants. The training grant funds will be provided under the Training and Employment Services’’ for activities under the Workforce Investment Act of 1998.

 

It is clear that there is a huge amount of funds available for anything related to “broadband.” The next steps for NTIA and RUS are to set up processes for consulting with state governments to determine the scope of the RFPs, and to establish deadlines for responding to the RFPs and loan applications. Stay tuned.