Broadband Pilot Grant Program

AGENCY:

Rural Utilities Service, USDA.

ACTION:

Notice of funds availability.

SUMMARY:

The Rural Utilities Service (RUS) announces a pilot grant program for the provision of broadband transmission service in rural America. For fiscal year 2002, $20 million in grants will be made available through a national competition to applicants proposing to provide broadband transmission service on a “community-oriented connectivity” basis. The “community-oriented connectivity” approach will target rural, economically-challenged communities and offer a means for the deployment of broadband transmission services to rural schools, libraries, education centers, health care providers, law enforcement agencies, public safety organizations as well as residents and businesses. This all-encompassing connectivity concept will give small, rural communities a chance to benefit from the advanced technologies that are necessary to foster economic growth, provide quality education and health care opportunities, and increase and enhance public safety efforts.

DATES:

Applications for grants will be accepted as of the date of this notice through November 5, 2002. All applications must be delivered to RUS or bear postmark no later than November 5, 2002. Comments regarding the information collection requirements under the Paperwork Reduction Act must be received on or before September 6, 2002, to be assured of consideration.

FOR FURTHER INFORMATION CONTACT:

Roberta D. Purcell, Assistant Administrator, Telecommunications Program, Rural Utilities Service, STOP 1590, 1400 Independence Avenue SW., Washington, DC 20250-1590, Telephone (202) 720-9554, Facsimile (202) 720-0810.

SUPPLEMENTARY INFORMATION:

Information Collection and Recordkeeping Requirements

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), RUS invites comments on this information collection for which RUS intends to request approval from the Office of Management and Budget (OMB). These requirements have been approved by emergency clearance under OMB Control Number 0572-0127.

Comments on this notice must be received by September 6, 2002.

Comments are invited on (a) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

Comments may be sent to F. Lamont Heppe, Jr., Director, Program Development and Regulatory Analysis, Rural Utilities Service, U.S. Department of Agriculture, 1400 Independence Ave. SW., Stop 1522, Room 4034 South Building, Washington, DC 20250-1522.

Title: Broadband Pilot Grant Program

Type of Request: New collection.

Estimate of Burden: Public reporting burden for this collection of information is estimated to average 152 hours per response.

Respondents: Public bodies, commercial companies, cooperatives, nonprofits, Indian tribes, and limited dividend or mutual associations and must be incorporated or a limited liability company.

Estimated Number of Respondents: 105.

Estimated Number of Responses per Respondent: 1.

Estimated Total Annual Burden on Respondents: 16,005 hours.

Copies of this information collection can be obtained from Michele Brooks, Program Development and Regulatory Analysis, at (202) 690-1078.

All responses to this information collection and recordkeeping notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.

General Information

The provision of broadband transmission service is vital to the economic development, education, health, and safety of rural Americans. To further this objective, RUS will provide financial assistance to eligible entities that propose, on a “community-oriented connectivity” basis, to provide broadband transmission service that fosters economic growth and delivers enhanced educational, health care, and public safety services. RUS will provide this assistance in the form of grants. RUS will give priority to rural areas that it believes have the greatest need for broadband transmission services.

Twenty million dollars in grant authority will be utilized to deploy broadband infrastructure to extremely rural, lower income communities on a “community-oriented connectivity” basis. The “community-oriented connectivity” concept integrates the deployment of broadband infrastructure with the practical, everyday uses and applications of the facilities. This broadband access is intended to promote economic development and provide enhanced educational and health care opportunities. RUS will provide financial assistance to eligible entities that are proposing to deploy broadband transmission service in rural communities where such service does not currently exist and who will connect the critical community facilities including the local schools, libraries, hospitals, police, fire and rescue services and who will operate a community center that provides free and open access to residents. Under this Notice, grants will be made available, on a competitive basis, for the deployment of broadband transmission services to critical community facilities, rural residents, and rural businesses and for the construction, acquisition, or expansion and operation of a community center that provides free access to broadband transmission services to community residents for at least two years. Funding is also available for end-user equipment, software, and installation costs. A state-of-the-art community center will not only provide improved access but will aid rural residents in developing on-line businesses and will allow them to reap the benefits of Internet-based advanced placement courses, and continuing adult education. An application is limited to including only one project, as defined in this notice. Applicants wishing to serve multiple projects must submit an application for each project. Applicants will be required to provide a minimum matching contribution that is equal to 15 percent of the grant amount awarded.

Agency Contacts

For application information, contact the following individuals:

Applications from: Alabama, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, Virgin Islands, West Virginia, Wisconsin: Mr. Kenneth Kuchno, Director, Eastern Area, Telecommunications, Rural Utilities Service, USDA, STOP 1599, 1400 Independence Avenue SW., Washington, DC 20250-1599, Telephone (202) 690-4673.

Applications from: Alaska, Idaho, Iowa, Minnesota, Missouri, Montana, North Dakota, Oregon, South Dakota, Washington, Wyoming: Mr. Jerry Brent, Director, Northwest Area, Telecommunications, Rural Utilities Service, USDA, STOP 1595, 1400 Independence Avenue SW., Washington, DC 20250-1595, Telephone (202) 720-1025.

Applications from: Arizona, Arkansas, California, Colorado, Hawaii, Kansas, Louisiana, Nebraska, Nevada, New Mexico, Oklahoma, Texas, Utah, American Samoa, Federated States of Micronesia, Guam, Republic of Marshall Islands, Republic of Palau, Commonwealth of the Northern Marianas Islands: Mr. Ken Chandler, Director, Southwest Area, Telecommunications, Rural Utilities Service, USDA, STOP 1597, 1400 Independence Avenue SW., Washington, DC 20250-1597, Telephone (202) 720-0800.

Definitions

As used in this notice:

Bandwidth means the capacity of the radio frequency band or physical facility needed to carry the broadband transmission services.

Basic broadband transmission service means the broadband transmission service level provided by the applicant at the lowest rate or service package level for residential or business customers, as appropriate, providing such service meets the requirements of this notice.

Broadband transmission service means providing an information rate equivalent to at least 200 kilobits/second in the consumer's connection to the network, both from the provider to the consumer (downstream) and from the consumer to the provider (upstream).

Community means any incorporated or unincorporated city, town, village, or borough.

Community center means a public building, or a section of a public building, that is used solely for the purposes of providing free access to and/or instruction in the use of broadband Internet service, and is of the appropriate size to accommodate this sole purpose. The community center must be open and accessible to area residents before and after normal working hours and on Saturday or Sunday. Examples of facilities that may be partially used for the described purposes include school, library, or city hall.

Computer access points means a new computer terminal with access to basic broadband transmission service.

Critical community facility means a public school, public library, public medical clinic, public hospital, community college, public university, or law enforcement, fire and ambulance stations.

Eligible applicant shall have the meaning set forth in that paragraph entitled “Eligible Applicant.”

Eligible grant purposes shall have the meaning set forth in that paragraph entitled “Eligible Grant Purposes.”

End-user equipment means computer hardware and software, audio or video equipment, computer network components, telecommunications terminal equipment, inside wiring, interactive video equipment, or other facilities required for the provision and use of broadband transmission services.

Matching contribution means the applicant's qualified contribution to the project.

Project means the approved purposes financed by the grant and the applicant's matching contribution to serve one community and the contiguous, unincorporated areas located outside the community's boundaries.

Rural area means any area of the United States not included within the boundaries of any incorporated or unincorporated city, town, village, or borough having a population of more than 20,000 inhabitants.

Service area means a single community and the contiguous, unincorporated areas located outside the community's boundaries.

Spectrum means a defined band of frequencies that will accommodate the broadband transmission services.

Telecommunications terminal equipment means the assembly of telecommunications equipment at the end of a circuit or path of a signal, including but not limited to facilities that receive or transmit over the air broadcast, satellite, and microwave, normally located on the premises of the end user, that interfaces with telecommunications transmission facilities, and that is used to modify, convert, encode, or otherwise prepare signals to be transmitted via such telecommunications facilities, or that is used to modify, reconvert, or carry signals received from such facilities, the purpose of which is to accomplish the goal for which the circuit or signal was established.

Eligible Applicant

To be eligible for a grant, the applicant must:

(a) Be a public body; an Indian tribe; a cooperative, nonprofit, limited dividend or mutual association; municipality; an incorporated or limited liability company; or other legally organized entity. The applicant may not be an individual or a partnership; and

(b) Have the legal authority to own and operate the broadband facilities as proposed in its application, to enter into contracts and to otherwise comply with applicable Federal statutes and regulations.

Eligible Project

To be eligible for a grant, the project must:

(a) Propose to serve a rural area where broadband transmission service does not currently exist;

(b) Propose to serve one community;

(c) Deploy basic broadband transmission service, free of all charges for at least 2 years, to all critical community facilities located within the proposed service area;

(d) Deploy basic broadband transmission service, free of all charges for at least 2 years, to the community center;

(e) Offer basic broadband transmission service to all residential and business customers within the proposed service area; and

(f) Provide a community center within the proposed service area and make broadband transmission service available, free of all charges to users within the center for at least 2 years. The community center must have, as a minimum, 10 computer access points or computer access points equal to 1 percent of the service area's population, whichever is greater.

Eligible Grant Purposes

Grant funds may be used to finance:

(a) The construction, acquisition, or lease of facilities, including spectrum, to deploy broadband transmission services to all critical community facilities and to offer such service to all residential and business customers located within the proposed service area;

(b) The improvement, expansion, construction, or acquisition of a community center that furnishes free access to broadband Internet service, provided that the community center is open and accessible to area residents before and after normal working hours and on Saturday or Sunday. Grant funds provided for such costs shall not exceed the greater of 5 percent of the grant amount requested or $100,000;

(c) End-user equipment needed to carry out the project;

(d) Operating expenses incurred in providing broadband transmission service to critical community facilities for the first 2 years of operations and to provide training and instruction. Salary and administrative expenses will be subject to review, and may be limited, by RUS for reasonableness in relation to the scope of the project; and

(e) The purchase of land, buildings, or building construction needed to carry out the project.

Grant funds may not be used to finance the duplication of any existing broadband transmission services provided by other entities.

Facilities financed with grant funds cannot be utilized, in any way, to provide local exchange telecommunications service to any person or entity already receiving such services.

Matching Contributions

The grant applicant's minimum matching contribution must equal 15 percent of the grant amount requested and shall be in the form of:

(a) Cash for eligible grant purposes; and

(b) In-kind contributions of purposes that could have been financed with grant funds under this notice. In-kind contributions must be new or non-depreciated assets with established monetary values. Manufacturers' or service providers' discounts are not matching contributions.

(c) The rental value of space provided within an existing community center, provided that the space is provided free of charge to the applicant;

(d) Salary expenses incurred for the individual(s) operating the community center.

(e) Expenses incurred in operating the community center.

Cost incurred by the applicant, or others on behalf of the applicant, for facilities or equipment installed, or other services rendered prior to submission of a completed application, shall not be considered as an eligible grant purpose or matching contribution.

Rental values of space provided must be substantiated by rental agreements documenting the cost of space of a similar size in a similar location.

Rental values, salaries, and other expenses incurred in operating the community center will be subject to review by RUS for reasonableness in relation to the scope of the project.

Any financial assistance from Federal sources will not be considered as matching contributions unless there is a Federal statutory exception specifically authorizing the Federal financial assistance to be considered as a matching contribution.

Completed Application

A completed application must include the following documentation, studies, reports and information in a form satisfactory to RUS. Applications should be prepared in conformance with the provisions of this notice and applicable USDA regulations including 7 CFR parts 3015, 3016, and 3019. Completed applications must include the following:

(a) An application for Federal Assistance. A completed Standard Form 424.

(b) An executive summary of the project. The applicant must provide RUS with a general project overview that addresses the following categories:

(1) A description of why the project is needed;

(2) A description of the applicant;

(3) An explanation of the total project cost;

(4) A general overview of the broadband telecommunications system to be developed, including the types of equipment, technologies, and facilities used;

(5) Documentation describing the procedures used to determine the unavailability of existing broadband transmission service; and

(6) A description of the participating community organizations (such as schools, health care providers, police and fire departments, etc.).

(c) Scoring criteria documentation. Each grant applicant must address and provide documentation on how it meets each of the scoring criteria detailed in the “Scoring of Applications” section hereafter.

(d) System Design. The applicant must submit a system design that contains the following, satisfactory to RUS:

(1) A narrative discussing the proposed community center and all costs of the project, all existing and proposed facilities that are a part of the project, the services to be provided by the project, and the proposed service area;

(2) Engineering design studies providing an economical and practical engineering design of the project, including a detailed description of the facilities to be funded, technical specifications, data rates, and costs; and

(3) A map of the proposed service area reflecting the proposed location of the community center and critical community facilities; and

(e) A scope of work. The scope of work must include, at a minimum:

(1) The specific activities and services to be performed under the project;

(2) Who will carry out the activities and services;

(3) The time-frames for accomplishing the project objectives and activities; and

(4) A budget for all capital and administrative expenditures reflecting the line item costs for eligible purposes for the grant funds, the matching contributions, and other sources of funds necessary to complete the project.

(f) Community-oriented connectivity plan. The applicant must provide a community-oriented connectivity plan consisting of the following:

(1) A listing of all critical community facilities to be connected, including public schools, public libraries, public medical clinics, public hospitals, community colleges, public universities, and law enforcement, fire and ambulance stations. The applicant must provide documentation of consultation with these groups, including commitments to participate in the proposed project;

(2) A description of the services available to local residents through the use of the community center;

(3) A listing of the proposed telecommunications terminal equipment, telecommunications transmission facilities, data terminal equipment, interactive video equipment, computer hardware and software systems, and components that process data for transmission via telecommunications, computer network components, communication satellite ground station equipment, or any other elements of the broadband telecommunications system designed to further the deployment and use of broadband transmission services, that the applicant intends to build or fund using RUS grant funds and matching contribution; and

(4) A description of the consultations with the appropriate telecommun-ications carriers (including interexchange carriers, cable television operators, enhanced service providers, providers of satellite services and telecommunications equipment manufacturers and distributors) and the anticipated role of such providers in the proposed broadband telecommunications system.

(g) Financial information and sustainability. The applicant must provide a narrative description demonstrating sustainability of the project, including having sufficient resources and expertise necessary to undertake and complete the project and how the project will be sustained following completion. The following financial information is required:

(1) Certified financial statements, if available; and

(2) 5 years of pro-forma financial information, evidencing the sustainability of the project.

(h) A statement of experience. Information on the owners and principal employees' relevant work experience that would ensure the success of the project. The applicant must provide a written narrative describing its demonstrated capability and experience, if any, in operating a broadband telecommunications system.

(i) Evidence of legal authority and existence. The applicant must provide evidence of its legal existence and authority to enter into a grant agreement with RUS and perform the activities proposed under the grant application.

(j) Funding commitment from other sources. If the project requires additional funding from other sources in addition to the RUS grant, the applicant must provide evidence that funding agreements have been obtained to ensure completion of the project.

(k) Compliance with other Federal statutes. The applicant must provide evidence of compliance with other Federal statutes and regulations, including, but not limited to the following:

(1) 7 CFR part 15, subpart A—Nondiscrimination in Federally Assisted Programs of the Department of Agriculture—Effectuation of Title VI of the Civil Rights Act of 1964.

(2) 7 CFR part 3015—Uniform Federal Assistance Regulations.

(3) 7 CFR part 3017—Government wide Debarment and Suspension (Nonprocurement).

(4) Government wide Requirements for Drug-Free Workplace.

(5) 7 CFR part 3018—New Restrictions on Lobbying.

(6) Certification regarding Architectural Barriers.

(7) Certification regarding Flood Hazard Precautions.

(8) An environmental report, in accordance with 7 CFR 1794.

(9) Certification that grant funds will not be used to duplicate lines, facilities, or systems providing broadband transmission services.

(10) Federal Obligation Certification on Delinquent Debt.

Review of Grant Applications

(a) All applications for grants must be delivered to RUS at the address listed above or postmarked no later than November 5, 2002 to be considered eligible for FY 2002 grant funding. RUS will review each application for conformance with the provisions of this Notice. RUS may contact the applicant for additional information or clarification.

(b) Incomplete applications as of the deadline for submission will not be considered. If an application is determined to be incomplete, the applicant will be notified in writing and the application will be returned with no further action.

(c) Applications conforming with this Notice will then be evaluated competitively by a panel of RUS employees selected by the Administrator, RUS, and be awarded points as described in the scoring criteria section below. The applications will be ranked and grants awarded in rank order until all grant funds are expended.

(d) Regardless of the score an application receives, if RUS determines that the project is technically or financially infeasible, RUS will notify the applicant, in writing, and the application will be returned with no further action.

Scoring of Applications

(a) All eligible applications will receive points for the following scoring criteria:

(1) The rurality of the project;

(2) The economic need of the project's service area (up to 20 points); and

(3) The benefits derived from the proposed service (up to 30 points).

(b) Scoring criteria:

(1) The rurality of the project—up to 40 points.

(i) This criterion will be used to evaluate the rurality of the community served by the project, in accordance with the following method of scoring. Rurality shall be determined by the 2000 population data contained in the U.S. Bureau of the Census at http://factfinder.census.gov/servlet/BasicFactsServlet. The following categories are used in the evaluation of rurality:

(A) Level 1 means any community having a population of less than 500 inhabitants.

(B) Level 2 means any community having a population of at least 500 and not in excess of 1,000 inhabitants.

(C) Level 3 means any community having a population over 1,000 and not in excess of 2,000 inhabitants.

(D) Level 4 means any community having a population over 2,000 and not in excess of 3,000 inhabitants.

(E) Level 5 means any community having a population over 3,000 and not in excess of 4,000 inhabitants.

(F) Level 6 means any community having a population over 4,000 and not in excess of 5,000 inhabitants.

(G) Level 7 means any community having a population over 5,000 and not in excess of 10,000 inhabitants.

(H) Level 8 means any community having a population over 10,000 and not in excess of 20,000 inhabitants.

(ii) Each application will receive points based on the location of the facilities financed using the definitions above.

(A) For a service area that includes a Level 1 community, it will receive 40 points.

(B) For a service area that includes a Level 2 community, it will receive 35 points.

(C) For a service area that includes a Level 3 community, it will receive 30 points.

(D) For a service area that includes a Level 4 community, it will receive 25 points.

(E) For a service area that includes a Level 5 community, it will receive 20 points.

(F) For a service area that includes a Level 6 community, it will receive 15 points.

(G) For a service area that includes a Level 7 community, it will receive 10 points.

(H) For a service area that includes a Level 8 community, it will receive 5 points.

(2) The economic need of the project service area—up to 30 points.

(i) This criterion will be used to evaluate the economic need of the service area. Applicants must utilize the per capita personal income by County, as determined by the Bureau of Economic Analysis, U.S. Department of Commerce, at www.bea.doc.gov/bea/regional/reis/ . Applicants will be awarded points as outlined below for service provided in each county where the per capita personal income (PCI) is less than 70 percent of the national average per capita personal income (NAPCI):

(A) PCI is 75 percent or greater of NAPCI; 0 points;

(B) PCI is less than 75 percent and greater than or equal to 70 percent of NAPCI; 5 points;

(C) PCI is less than 70 percent and greater than or equal to 65 percent of NAPCI; 10 points;

(D) PCI is less than 65 percent and greater than or equal to 60 percent of NAPCI; 15 points;

(E) PCI is less than 60 percent and greater than or equal to 55 percent of NAPCI; 20 points;

(F) PCI is less than 55 percent and greater than or equal to 50 percent of NAPCI; 25 points;

(G) PCPI is less than 50 percent of NAPCPI; 30 points;

(ii) If an applicant proposes service in more than one county, an average score will be calculated based on each county's individual scores.

(3) The benefits derived from the proposed service—up to 30 points.

(i) This criterion will be used to score applications based on the documentation in support of the need for services, benefits derived from the services proposed by the project, and local community involvement in planning and implementation of the project. Applicants may receive up to 30 points for documenting the need for services and benefits derived from service as explained in this section.

(ii) RUS will consider:

(A) The extent of the applicant's documentation explaining the economic, education, health care, and public safety issues facing the community and the applicant's proposed plan to address these challenges on a community-wide basis;

(B) The extent of the project's planning, development, and support by local residents, institutions, and community facilities will be considered. This includes evidence of community-wide involvement, as exemplified in community meetings, public forums, and surveys. In addition, applicants should provide evidence of local residents' participation in the project planning and development;

(C) The extent to which the community center will be used for instructional purposes including Internet usage, Web-based curricula, and Web page development; and

(D) Web-based community resources enabled or provided by the applicant, such as community bulletin boards, directories, public web-hosting, notices, etc.

Grant Documents

The terms and conditions of grants shall be set forth in grant documents prepared by RUS. The documents shall require the applicant to own all equipment and facilities financed by the grant. Among other matters, RUS may prescribe conditions to the advance of funds that address concerns regarding the project feasibility and sustainability. RUS may also prescribe terms and conditions applicable to the construction and operation of the project and the delivery of broadband transmission services to rural areas.