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Thursday, January 13, 2011

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.

As of October 1, 2010, all BTOP and BIP award announcements were complete. In total, NTIA and RUS announced awards for 553 projects, constituting $7.5 billion in federal funding. This included 233 BTOP projects (totaling $3.9 billion) and 320 BIP projects (totaling $3.6 billion). Of the $7.5 billion total announced, $6.2 billion was grant funding, and $1.3 billion was loan funding. With the awards phase completed, NTIA and RUS now shift their focus to oversight of the funded projects as they move forward. Additionally, the broadband mapping effort, implemented by the State Broadband Data and Development Grant Program, awarded $293 million to 50 states, 5 territories, and the District of Columbia.

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. The 112
th Congress may monitor 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.

Date of Report: January 4, 2011
Number of Pages: 26
Order Number: R40436
Price: $29.95

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