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Monday, May 17, 2010

Broadband Infrastructure Programs in the American Recovery and Reinvestment Act

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 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). Of the $7.2 billion total, the ARRA provided $4.7 billion to establish a Broadband Technology Opportunities Program (BTOP) at NTIA, and $2.5 billion as funding for broadband grant, loan, and loan/grant combination programs at RUS. Broadband grants and loans funded by the ARRA are competitive and applicants must apply directly to NTIA and RUS. The NTIA appropriation also included $350 million for a national broadband inventory map, funding for the Broadband Data Improvement Act (P.L. 110-385), and funding to be transferred to the Federal Communications Commission (FCC) to develop a national broadband plan. 

The unprecedented scale and scope of the ARRA broadband programs, coupled with the short time frame for awarding grants, presents daunting challenges with respect to program implementation as well as Congressional oversight. Congress is closely monitoring how equitably and effectively broadband grants are allocated among states and the various stakeholders, and to what extent the programs fulfill the goals of short term job creation and the longer term economic benefits anticipated from improved broadband availability, access, and adoption. A continuing issue is how to strike a balance between providing federal assistance for unserved and underserved areas where the private sector may not be providing acceptable levels of broadband service, while at the same time minimizing any deleterious effects that government intervention in the marketplace may have on competition and private sector investment. 

There are two rounds of broadband funding. The first funding round was announced with the release of a Notice of Funds Availability (NOFA) on July 1, 2009. The NOFA contained eligibility requirements, application rules and procedures, and evaluation criteria for BTOP at NTIA and for the Broadband Initiatives Program (BIP) at RUS. In the first round, NTIA and RUS announced awards for 150 projects, totaling $2.275 billion in federal funding. This includes 82 BTOP projects (totaling $1.206 billion) and 68 BIP projects (totaling $1.069 billion). 

The second round NOFAs for BTOP and BIP were released on January 15, 2010. With respect to infrastructure, BTOP will fund middle mile projects, while BIP will focus primarily on last mile projects. Significant changes made from the first round NOFA, include: simplifying application procedures, reorienting BTOP infrastructure grants towards comprehensive community middle mile projects, eliminating the BIP remote last mile project category, and adding a separate BIP Satellite Project category. 

Date of Report: May 6, 2010
Number of Pages: 26
Order Number: R40436
Price: $29.95

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