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Round-Up for the Week of February 20-23, 2024

This week, the U.S. Department of Agriculture's Rural Utilities Service (RUS) announced the latest window to receive applications for Rural eConnectivity (ReConnect) Program support to extend broadband networks in rural areas. RUS will accept ReConnect applications starting March through April 22, 2024 May 21, 2024. These loan and grant funds will be awarded to qualified applicants to fund the costs of construction, improvement, or acquisition of facilities and equipment needed to provide broadband service. RUS is seeking applications that advance the following priorities:

• Assisting rural communities recover economically through more and better market opportunities and through improved infrastructure;
• Ensuring all rural residents have equitable access to Rural Development (RD) programs and benefits from RD-funded projects; and
• Reducing climate pollution and increasing resilience to the impacts of climate change through economic support to rural communities.

History of the ReConnect Program

On March 23, 2018, Congress passed the Consolidated Appropriations Act, 2018, which established a new broadband loan and grant pilot program, now called the Rural eConnectivity Pilot Program and known simply as the ReConnect Program. Congress aimed to help close the digital divide by expanding broadband deployment in rural areas. For context, the Federal Communications Commission found in 2019 that approximately 14.5 million Americans lacked access to broadband, and more than 11 million
of them lived in rural areas. 

Congress has provided funding for the ReConnect Program through annual appropriations acts; the Coronavirus Aid, Relief, and Economic Security (CARES) Act; and the Infrastructure Investment and Jobs Act (IIJA). Congress appropriated $600 million for the program in fiscal year (FY) 2018, $550 million in FY2019, $655 million in FY2020, and $635 million in FY2021 through appropriations acts. Congress appropriated $1.926 billion for the ReConnect Program through the Infrastructure Investment and Jobs Act for FY2022.

Since the beginning of the Biden-Harris Administration, USDA has invested $3.7 billion in 338 ReConnect projects that will bring high-speed internet access to more than 485,000 people in the hardest-to-reach communities of rural America.

ReConnect Round 5

In this latest round of ReConnect funding (round 5), RUS is making $200 million available for loans, $150 million for grants, and $100 million for applicants seeking support which is 50 percent loan and 50 percent grant. RUS has also set aside $150 million for grants for Alaska Native Corporations (that is, an Alaska Native Regional Corporation or an Alaska Native Village Corporation), Tribal Governments (the governing body for an Indian or Alaska Native tribe, band, nation, pueblo, village, or community), Colonias, Persistent Poverty Areas (any county with 20 percent or more of its population living in poverty over the past 30 years), and Socially Vulnerable Communities (a community or area identified in the Center for Disease Control's Social Vulnerability Index with a score of .75 or higher).

The minimum amount that can be requested in any funding category is $100,000. The maximum amount that can be requested in an application is $50 million.

For 100 percent loan awards, the interest rate is set at a fixed 2 percent. Principal and interest payments will be deferred for three years. 

For 50 percent loan/50 percent grant awards, the interest rate for the loan will be set at the Treasury rate. Principal and interest payments will be deferred for three years. The maximum amount that can be requested in an application is $25,000,000 for the loan and $25,000,000 for the grant. Amounts requested for loans and grants must always be equal.

For 100 percent grant awards, applicants must provide a matching contribution of cash equal to at least 25 percent of the cost of the overall project. The applicant must clearly identify the source of the matching funds even if the match is provided from the applicant's operating accounts. All matching funds must be deposited into the applicant's operating accounts. The maximum amount of grant funds that can be requested in an application is $25 million.

ReConnect Eligibility

To be eligible for support, at least 90 percent of the households in the Proposed Funded Service Area (or PFSA, if you're at a Beltway cocktail party) must lack "sufficient access to broadband." The US Department of Agriculture (USDA) defines sufficient access to broadband as "any rural area in which households have wired or licensed terrestrial fixed wireless broadband service defined as 25 Mbps downstream and 3 Mbps upstream." If these areas are found to have sufficient service beyond the threshold, the application may be rejected. Applicants must also identify all existing providers in the PFSA, and indicate what level of service is being provided. Applicants are required to use the FCC's Broadband Funding Map as part of this process. The FCC collects and publishes information on broadband infrastructure deployment projects funded by the Federal government throughout the United States. The Broadband Funding Map provides an overview of such projects, incorporating funding data submitted by Federal agencies and broadband availability data submitted by Internet Service Providers (ISPs) through the FCC's Broadband Data Collection in an online mapping tool. 

Areas that have an "Enforceable Commitment" (a legally enforceable obligation by any federal, state, or local agency, utilizing Federal Funds, to provide broadband service with speeds of at least 100/20 Mbps) at this time are ineligible for ReConnect funds. However, if an applicant submits evidence that the entity that received the Enforceable Commitment has not deployed broadband service as required by the awarding agency's regulations or award documents, the area may be considered eligible for funding after consultation with the awarding agency. 

Areas with current broadband service from only satellite or unlicensed wireless facilities, or which have an enforceable commitment associated with only satellite or unlicensed wireless facilities, are eligible for funding under this notice.

Applicants that are receiving Enhanced Alternative Connect America Cost Model (E–ACAM) funding from the FCC are only eligible for a ReConnect 100 percent loan but not grant funding. RUS will determine the eligibility of applicants that are recipients of other FCC Universal Service Fund High-Cost support programs on a case-by-case basis in accordance with the applicable High-Cost support program rules.

Use of ReConnect Funds

ReConnect award funds may be used for the following purposes:

• To fund the construction or improvement of facilities, including buildings and land, required to provide fixed terrestrial broadband service, including fixed wireless service, and any other facilities required for providing other services over the same facilities.
• To fund reasonable preapplication expenses in an amount not to exceed five percent of the award. The costs associated with satisfying environmental review requirements are also eligible for reimbursement as pre-application expenses. Up to three percent of the requested award funds can be used for this purpose. Pre-application expenses may only be reimbursed if they are incurred after February 21 and are properly documented.
• To fund up to three percent of the requested amount for post-award monitoring expenses that may be required to mitigate the environmental effects of the project, as long as such costs are capitalized as part of the project. These costs must be specified in the Professional Services section of the Capital Investment Workbook included as part of the application system.
• To fund the acquisition of an existing system that does not currently provide sufficient access to broadband for upgrading that system.
• To fund pole attachment fees associated with the construction of the project throughout the five-year construction period. In addition, if the pole owner requires that a pole be replaced to support the broadband facilities, such costs shall be eligible.

ReConnect award funds may NOT be used for the following purposes:

• To fund projects proposing to use unlicensed wireless facilities.
• To fund grant costs of a vendor that has both designed and is to construct the proposed project. If the project has already been designed, then only such costs will be eligible for that vendor and the applicant must procure construction from another entity not related to the vendor. If an applicant is applying for a 100% loan and wishes to use the same vendor for design and construction, supporting documentation must be provided that demonstrates that this arrangement is the most economical way to get the broadband facilities constructed. Note, however, that the agency reserves the right not to accept such documentation, and as a result, the applicant must procure construction from another entity not related to the vendor. An applicant applying for a loan, grant, or a combination loan-grant, can use qualified in-house staff for both the design and construction of the broadband facilities.

How USDA Evaluates Applications

One hundred percent of grant applications and combination loan/grant applications will be scored based on the following criteria.

• Rurality of PFSA (25 Points). Points will be awarded for serving the least dense rural areas as measured by the population of the PFSA per square mile or if the PFSA is located at least one hundred miles from a city or town that has a population of greater than 50,000 inhabitants. If multiple service areas are proposed, the density calculation will be made on the combined areas as if they were a single area and not the average densities. For population densities of 6 or less or if the PFSA is located one hundred miles from a city or town of 50,000, 25 points will be awarded.
• Economic need of the community (20 Points). Economic need is based on the county poverty percentage of the PFSA in the application. The percentages must be determined by utilizing the United States Census Small Area Income and Poverty Estimates (SAIPE) Program. For applications where 75 percent of the PFSA(s) are proposing to serve communities with a SAIPE score of 20 percent or higher, 20 points will be awarded. 
• Affordability (20 Points). Applications can receive 20 points if, in their service offerings, they include at least one low-cost option offered at speeds that are sufficient for a household with multiple users to simultaneously telework and engage in remote learning.
  • To ensure that rural households can take advantage of the Affordable Connectivity Program (ACP) benefit, applicants selected for ReConnect funding will be required to apply to participate in the ACP before award funds are disbursed if additional funding is appropriated by Congress to continue the program or any successor program.
• Labor Standards (20 points). For applicants that commit to strong labor standards, consistent with Tribal Laws when the project proposes to build infrastructure on Tribal Lands, 20 points will be awarded. RUS encourages recipients to ensure that broadband projects use strong labor standards. Applicants should include in their applications a description of whether and, if so, how the project will incorporate three categories of strong labor standards and protections:
  • Whether workers (including employees of contractors and subcontractors) will be paid wages at or above the prevailing rate;  whether the project will be covered by a project labor agreement; and/or whether the project will use a unionized project workforce;
  • Demonstrated compliance with and plans for future compliance with labor and employment laws;
  • A plan to recruit and support an appropriately skilled, trained and credentialed workforce (including by contractors and subcontractors)
• Tribal areas (15 Points). For applicants that are Tribal Governments or Tribal Government wholly-owned entities and, at least 75 percent of the geographical area of the PFSA(s) is on Tribal Lands, 15 points shall be awarded. For non-tribal governmental entities where at least 50 percent of the geographical area of the PFSA(s) is on Tribal Lands, 10 points shall be awarded.
• Local governments, non-profits, and cooperatives (15 points). Applications submitted by local governments, non-profits, or cooperatives (including for projects involving public-private partnerships where the local government, non-profit, or cooperative is the applicant) will be awarded 15 points.
• Socially Vulnerable Communities (15 points). For applications where at least 75 percent of the PFSA(s) are proposing to serve Socially Vulnerable Communities, 15 points will be awarded.
• Net neutrality (10 points). For applicants that commit to net neutrality principles, 10 points will be awarded.(1)
• Most Unserved Locations Per Square Mile (up to 10 points). In order to ensure RUS prioritizes funding to states with the highest concentrations of Unserved Broadband Serviceable Locations (UBSLs) (by percentage and area), projects located in Alaska, Idaho, Montana, New Mexico, and Wyoming that meet these criteria will receive 10 points.(2) Projects located in Arkansas, Mississippi, Nevada, South Dakota, and West Virginia will receive 5 points.

Timeline

This article is meant to highlight the key items in the Notice of Funding Opportunity for the Rural eConnectivity Program for Fiscal Year 2024. For more detailed information, please read the notice.

RUS is offering a webinar to provide information about the ReConnect Program and will cover the recently published Notice of Funding Opportunity (NOFO). The webinar will include:

• A brief overview of the ReConnect Program
• The current Funding Opportunity Announcement
• A summary of changes from NOFO 4 to NOFO 5
• Next steps and important dates
• An opportunity to ask questions about the NOFO

The webinar will be held on March 6, 2024, from 1:00-2:30 PM EST (register here).

USDA expects to make awards in ReConnect round 5 by the end of September 2024. Any activity financed by a ReConnect award must be fully completed within five years of the date the funds are released.

Notes

1. A board resolution or its equivalent must be submitted in the application committing that the applicant's networks shall not (a) block lawful content, applications, services, or non-harmful devices, subject to reasonable network management; (b) impair or degrade lawful internet traffic on the basis of internet content, application, or service, or use of a non-harmful device, subject to reasonable network management; and (c) engage in paid prioritization, meaning the management of a broadband provider's network to directly or indirectly favor some traffic over other traffic, including through use of techniques such as traffic shaping, prioritization, resource reservation, or other forms of preferential traffic management, either (1) in exchange for consideration (monetary or otherwise) from a third party, or (2) to benefit an affiliated entity.
2. Here UBSLs are Broadband Serviceable Locations contained in the FCC's Broadband Serviceable Location Fabric that do not have access to a wired or licensed terrestrial fixed wireless broadband service at speeds of at least 25 Mbps downstream and 3 Mbps upstream.

Quick Bits

• March 2024 Open FCC Meeting Agenda
• FCC Consumer Advisory Committee Appointment Of Membership And Announcement Of First Meeting Date For Twelfth Term
• SNAP recipients can now shop at an online-only grocery store
• Hey philanthropy: Don’t let BEAD break your heart
• Americans 50+ Support the Affordable Connectivity Program

Weekend Reads (resist tl;dr)

• Next Century Cities Releases Fifty-Six State and Territory Resource One-Pagers
• Digital Equity Plan for Older Adults & Adults with Disabilities
• Rural Broadband Operations Benchmarking Report
• When Eyes in the Sky Start Looking Right at You

ICYMI from Benton

• Why Leading with Digital Equity Matters
• New Benton Research Groups To Tackle Critical Broadband Questions
• Broadband's Role in Federal Equity Action Plans
• 2024 Charles Benton Digital Equity Champions Awards
• The Economic, Political, Historic and Even Theological Case for ACP

Upcoming Events

Feb 28––Modeling Innovation: Government’s Role in Leading Responsible AI Growth (Axios)

Feb 29––Mapping the Future of Digital Privacy (Semafor)

Mar 5—2024 INCOMPAS Policy Summit (INCOMPAS)

Mar 5-6––Tribal Workshop at Marksville, Louisiana (FCC)

Mar 5-7––ACA Connects Summit 2024 (ACA Connects)

Mar 12––Connecting One Minnesota (Minnesota Office of Broadband Development)

Mar 13––Stories from NTIA’s Office of Minority Broadband Initiatives and the Connecting Minority Communities Pilot Program (NTIA)

Mar 14––March 2024 Open Federal Communications Commission Meeting (FCC)

Mar 20––Life After ACP (Institute for Local Self-Reliance)

Mar 25––The Right Connection (CENIC)

Apr 9––Broadband Equity is Local (Community Broadband Action Network)

Apr 17––2024 Bipartisan Tech Policy Conference (Next Century Cities)

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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