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Wednesday, September 29, 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). The NTIA grant program is called the Broadband Technology Opportunity Program (BTOP). The RUS broadband grant and loan program is called the Broadband Initiatives Program (BIP).

There are two rounds of ARRA broadband funding. The first round award announcements have concluded, and the announcement of second round awards began on July 2, 2010. As of September 9, 2010, 441 BTOP and BIP awards have been announced totaling $6.2 billion ($5.1 billion in grants, $1.1 billion in loans). Of this total, $3.1 billion has been awarded by BTOP, and $3.1 billion has been awarded by BIP. Additional BTOP and BIP awards will be announced through September 30, 2010.

This report focuses on the distribution of 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, the following observations can be made: 
  • The amount of funding awarded in the first round was about 57% of the available funding levels published in the first round Notice of Funds Availability (NOFA). 
  • Of all broadband infrastructure projects awarded in the first round, middle mile projects received more funding than last mile projects (53% vs. 47% of total funding for infrastructure). 
  • Of all first round broadband infrastructure funding, most (70%) was 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 89% of all middle mile projects and 70% of last mile nonremote projects. By contrast, one out of the 13 (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: September 9, 2010
Number of Pages: 22
Order Number: R41164
Price: $29.95

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