On February 17, 2009, President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009. The final version of this economic stimulus legislation includes $7.2 billion for broadband infrastructure improvements. That money has been allocated for two programs.

The "Broadband Technology Opportunities Program" has been designated at $4.7 billion.  The purposes of the program are to:

  • provide new and improved access to broadband service to consumers residing in unserved and underserved areas of the United States;

  • provide broadband education, awareness, training, access, equipment, and support to schools, libraries, healthcare providers, institutions of higher education, community support organizations, and agencies that provide support services to low-income, unemployed, aged, and otherwise vulnerable populations, to facilitate greater use of broadband service;

  • improve access to, and use of, broadband service by public safety agencies; and

  • stimulate the demand for broadband, economic growth, and job creation.

This program will be administered by the U.S. Department of Commerce's National Telecommunications and Information Administration (NTIA), in consultation with the Federal Communications Commission (FCC). The FCC will be required to develop a national broadband plan within one year and present it to Congress. NTIA may consult with any state with respect to identifying unserved or underserved areas and allocating grant funds. Since the federal share can only cover 80% of any project, an applicant must come up with 20% of the funding. The NTIA program is not limited to rural areas and applicants may include entities offering to construct long haul, middle-mile, or last-mile facilities. Among the stipulations of the program are that:

  • eligibility to receive a competitive grant is defined broadly to include states or political subdivisions, Indian tribes or native Hawaiian organizations, nonprofit corporations, institutions or associations, or any other entities, including broadband service providers or infrastructure providers, such as wireless carriers, wireline carriers, backhaul providers, satellite carriers, public-private partnerships, and tower companies;

  • an applicant must submit an application, provide a detailed explanation of how it will use the grant in an efficient and expeditious manner, demonstrate that it is capable of completing the project in a competent manner in compliance with applicable laws, disclose the source and amount of other funding to meet the requirement that the applicant come up with 20% of the project funds, and provide procedures for ensuring proper use of the grant funds;

  • NTIA, in awarding the grants, is required to consider whether a grant applicant is a socially and economically disadvantaged small business, and whether an application to deploy infrastructure will increase the affordability of service to the greatest population of users, will result in the greatest possible broadband speeds being delivered to users, and will enhance service for health care delivery, education, or children;

  • NTIA may impose conditions on grant recipients that include "nondiscrimination and network interconnection obligations," and adherence to the FCC's principles that consumers are entitled to access the lawful Internet content of their choice, run applications and use services of their choice, connect their legal devices that do not harm the network, and benefit from competition among providers; and

  • NTIA may expend funds to develop and maintain a nationwide inventory map of existing broadband services capability and availability from a commercial provider or public provider throughout each state, and shall make the inventory map accessible by the public.

The other portion designated for broadband is $2.5 billion, allocated for grants, loans and loan guarantees for rural broadband infrastructure projects. This program will be administered by the U.S. Department of Agriculture’s Rural Utilities Service (RUS). In awarding such funds, priority will be given to certain projects, such as applications that provide broadband service to the highest proportion of rural residents that do not have access to broadband service, applications that can demonstrate that, if approved, all project elements will be fully funded and deployed, and applications for projects that can commence promptly following approval. No area of a project funded through RUS under this program may receive funding from NTIA under the Broadband Technology Opportunities Program.

For more information on this legislation, please contact Jerold G. Oldroyd, 801.517.6801, oldroydj@ballardspahr.com, Partner-in-Charge of Ballard's Practice Group, or Sharon M. Bertelsen, 801.517.6833, bertelsens@ballardspahr.com.

Copyright © 2009 by Ballard Spahr LLP.
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