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Sunday, April 11, 2010

Distribution of Broadband Stimulus Grants and Loans: Applications and Awards

Lennard G. Kruger
Specialist in Science and Technology Policy

The American Recovery and Reinvestment Act (ARRA, P.L. 111-5) provided $7.2 billion primarily for broadband grant and loan programs to be administered by two separate agencies: the National Telecommunications and Information Administration (NTIA) of the Department of Commerce (DOC) and the Rural Utilities Service (RUS) of the U.S. Department of Agriculture (USDA). 

There are two rounds of ARRA broadband funding. The first funding round was announced with the release of a Notice of Funds Availability (NOFA) on July 1, 2009. On September 9, 2009, NTIA and RUS released data on applications received during the first round application period. In total, over 2,200 applications requested nearly $28 billion in funding for proposed projects reaching all 50 states, five territories, and the District of Columbia. The total amount of federal funding requested was seven times the amount available in the first round. 

RUS first round awards are now complete. NTIA awards, while mostly complete, will continue to be announced on a rolling basis through April 2010. The second funding round NOFAs were released on January 15, 2010. Second round awards are expected to be announced starting in June 2010. The ARRA mandates that all funding must be awarded by September 30, 2010. 

This report focuses on the distribution of round one ARRA broadband funding with respect to project category, program, technology deployed, state-by-state distribution, and other factors. Based on first round applications and awards data, current as of April 5, 2010, the following observations can be made: 

• To date, the amount of funding awarded in the first round is about half (53%) of the available funding levels published in the first round NOFA. 

• Of all broadband infrastructure projects awarded, middle mile projects have received more funding than last mile projects (55% vs. 45% of total funding for infrastructure). 

• Of all broadband infrastructure funding, most (69%) has been awarded to projects serving predominantly rural areas. However, a breakdown of the project categories awards data shows that while all last mile projects have been rural, the majority of middle mile funding has been awarded to projects serving nonrural areas. 

• Nonremote last mile rural projects were funded more heavily than remote area last mile rural projects. 

• Public notice responses were filed by existing service providers for 71% of all funded first round infrastructure projects. Public notice responses were filed for 91% of all middle mile projects and 69% of last mile nonremote projects. By contrast, one out of the thirteen (8%) last mile remote area applications received a public notice response from an existing service provider. 

Congress will likely continue to monitor how the stimulus broadband grants and loans are being distributed. To the extent that Congress may consider whether certain broadband grant and loan programs should be expanded, the funding patterns and trends that emerge during rounds one and two could provide insights into whether such programs should be expanded, and if so, how these or similar programs might be fashioned within the context of a national broadband policy.

Date of Report: April 5, 2010
Number of Pages: 23
Order Number: R41164
Price: $29.95

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