Rural Broadband Access Loans and Loan Guarantees Program

AGENCY:

Rural Utilities Service, USDA.

ACTION:

Notice of funds availability.

SUMMARY:

The Rural Utilities Service (RUS) announces funding available for the Rural Broadband Access Loan and Loan Guarantee program. For FY 2004, no less than $2.211 billion in loans is available, $2.051 billion for direct cost-of-money loans, $80 million for direct 4 percent loans, and $80 million for loan guarantees.

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:

General Information

During FY 2004, no less than $2.211 billion will be made available for loans and loan guarantees for the construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities. Of the total loan funds available, $2.051 billion will be available for direct cost-of-money loans, $80 million for 4 percent direct loans, and $80 million for loan guarantees. The funding levels for the 4 percent direct loans and the loan guarantees is derived from the budget authority carried over from prior years' mandatory funding. The Rural Broadband Access Loan and Loan Guarantee Program is authorized by the Rural Electrification Act (7 U.S.C. 601) (the Act), as added by the Farm Security and Rural Investment Act of 2002 (Farm Bill), Public Law 101-171.

Applications must be submitted in accordance with 7 CFR part 1738. This part and an application guide to assist in the preparation of applications are available in the Internet at: http://www.usda.gov/rus/telecom/broadband.htm. Application guides may also be requested from RUS by contacting the agency contact.

Agency Contacts

For application information, contact the following individual: Kenneth Kuchno, Program Manager “ Broadband Program, Telecommunications Program, RUS/USDA, Room 2846, Stop 1599, 1400 Independence Avenue, SW., Washington, DC 20250-1599, (202) 690-4673.

Eligible Rural Community

The definition of eligible rural community in Section 601(b)(2) of the Rural Electrification Act (7 U.S.C. 950bb)(b)(2), qualifying for financial assistance under the Rural Broadband Access Loan and Loan Guaranty Program, has been amended by provisions in the Consolidated Appropriations Act, 2004, to mean any area of the United States that is not contained in an incorporated city or town with a population in excess of 20,000 inhabitants. Therefore, an applicant no longer must demonstrate that it is not located in an area designated as a standard metropolitan statistical area. This change supersedes and nullifies contrary provisions in regulations implementing the broadband program found at 7 CFR part 1738.

Minimum and Maximum Loan Amounts

Loans and loan guarantees under this authority will not be made for less than $100,000. Maximum loan amounts apply only to the direct 4 percent loan program. The maximum amount available for any one applicant for a direct 4 percent loan is $7,500,000.

Minimum Rate of Data Transmission Criteria

The Secretary of Agriculture determines what qualifies as broadband service for the purpose of determining eligibility for financial assistance under the Rural Broadband Access Loan and Loan Guarantee Program. During fiscal year 2004, to qualify as broadband service, the minimum rate-of-data transmission shall be 200 kilobits/second in the customer's connection to the network, both from the provider to the customer (downstream) and from the customer to the provider (upstream).

State Allocations

The annual state allocation will not be made for Fiscal Year 2004. To ensure the obligation of funds by April 1, as required by the Farm Bill, an annual application submission deadline of January 31 for funding from the state allocation reserves was adopted and published in the enacting regulations. With the enactment of the Consolidated Appropriations Act on January 23, 2004, insufficient time remained for the submission of applications by the regulatory deadline.

4 Percent Direct Loans:

An applicant will be eligible for a direct 4 percent loan if: (1) the community being served has a population of less than 2,500, and is not currently receiving broadband service as defined at § 1738.11(b)(1); (2) the per capita income in the county being served as a percent of national per capita income, is not more than 65 percent of the national per capita income, as determined by the Bureau of Economic Analysis, U.S. Department of Commerce, at www.bea.doc.gov/bea/regional/reis,, and using the data for the most recent year published as of the date of application; and (3) the population density, calculated as the total number of persons in the service area divided by the square miles of the service area is not more than 20 persons per square mile.