USDA Launches New Rural Broadband Pilot “ReConnect” Program, Will Award $600M in Broadband Loans and Grants

The U.S. Department of Agriculture’s (USDA) Rural Utilities Service (RUS) announced new rules for how it will award up to $600 million in broadband loans, grants and loan/grant combinations through its “ReConnect Program” to help build broadband infrastructure throughout rural America. Projects eligible to receive funds from the program must serve rural communities with a population of less than 20,000 residents and have insufficient access to broadband with speeds of 10 Mbps downstream and 1 Mbps upstream.  The ReConnect Program is open to a wide range of applicants, including rural telephone and broadband service providers, cooperatives, state and local governments, non-profit organizations, for-profit companies, and Tribal entities. Applicants who are awarded loans or grants must be capable of deploying broadband at speeds of at least 25 Mbps downstream and 3 Mbps upstream to every “premise” in its proposed service area.

In establishing the program, the USDA set out three different types of awards, each with its own set of rules, available to applicants: (1) 100 percent grant, (2) 50 percent loan and 50 percent grant, or (3) 100 percent loan.  A total of $200 million is available for each type of award.  The maximum funding that an applicant can request is $25 million for a grant, $50 million for a loan and grant combination, and $50 million for a loan.  To be eligible for a 100 percent grant, the proposed service area must be rural and 100 percent of the households must lack sufficient broadband access.  To be eligible for a 100 percent loan or a loan and grant combination, the service area must be rural and 90 percent of the households must lack sufficient broadband access.

USDA is expected to announce the opening of the application portal by a notice in the Federal Register in late February 2019.  Application deadlines are April 29, 2019 for grants, May 29, 2019 for grant and loan combinations, and June 28, 2019 for loans.  Awards are anticipated to be disbursed in mid to late 2019.  Although the program is not accepting applications yet, USDA advises interested parties to begin developing the details of their projects and provided the following information that will be needed for applications:

  • Geographic boundaries of the proposed service area that currently lacks 10/1 mbps Internet speeds.
  • Type of technologies that will be used to provide new rural broadband service of 25/3 mbps or above (could be fiber, fixed wi-fi, and certain terrestrial components of satellite service).
  • Number of rural premises applicant will be connecting, such as homes, schools, libraries, healthcare facilities, farms, ranches, and businesses.
  • Business plan for how the service will be constructed and on what timeframe services will be available to customers.
  • Information about the structure and financial well-being of the community, cooperative, or company that is submitting the application.
  • System design for delivering 25/3 service including cost estimates of proposed facilities.
  • How the project will satisfy NEPA, Section 106, and other environmental requirements.

Additional information regarding the ReConnect Project can be found at https://reconnect.usda.gov/. If you have any questions or would like assistance in this process, please contact Dee Herman at dee@hermanwhiteaker.com, Clare Liedquist at cliedquist@hermanwhiteaker.com, or Molly O’Conor at moconor@hermanwhiteaker.com.