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Wednesday, June 5, 2013

Broadband Loan and Grant Programs in the USDA’s Rural Utilities Service

Lennard G. Kruger 
Specialist in Science and Technology Policy

Given the large potential impact broadband access may have on the economic development of rural America, concern has been raised over a “digital divide” between rural and urban or suburban areas with respect to broadband deployment. While there are many examples of rural communities with state of the art telecommunications facilities, recent surveys and studies have indicated that, in general, rural areas tend to lag behind urban and suburban areas in broadband deployment.

Citing the lagging deployment of broadband in many rural areas, Congress and the Administration acted in 2001 and 2002 to initiate pilot broadband loan and grant programs within the Rural Utilities Service (RUS) at the U.S. Department of Agriculture (USDA). Subsequently, Section 6103 of the Farm Security and Rural Investment Act of 2002 (P.L. 107-171) amended the Rural Electrification Act of 1936 to authorize a loan and loan guarantee program to provide funds for the costs of the construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities. The RUS/USDA houses two assistance programs exclusively dedicated to financing broadband deployment: the Rural Broadband Access Loan and Loan Guarantee Program and the Community Connect Grant Program.

For the broadband loan program, the Administration’s FY2013 budget proposal requested $8.915 million to subsidize a loan level of $94.139 million. The Administration requested $13.379 million for broadband grants in FY2013. The Consolidated and Further Continuing Appropriations Act, 2013 (P.L. 113-6) funds the broadband loan program at $4 million (supporting a loan level of approximately $42 million) and the Community Connect grant program is funded at $10.372 million. The Administration’s FY2014 budget proposal requested $8.268 million to subsidize a broadband loan level of $63.356 million, and $10.372 million for the Community Connect grant program.

The 110
th Congress considered reauthorization and modification of the loan and loan guarantee program as part of the 2008 farm bill. The Food, Conservation, and Energy Act of 2008 became law on June 18, 2008 (P.L. 110-246). Title VI (Rural Development) contains authorizing language for the broadband loan program.

The 112
th Congress considered reauthorization of the broadband loan program in the 2012 farm bill. While the 2012 farm bill was not enacted by the 112th Congress, Title VII of the American Taxpayer Relief Act of 2012 extended farm bill programs by one year (through September 30, 2013). In the 113th Congress, 2013 farm bill legislation introduced in the House and Senate (H.R. 1947/S. 954) includes the broadband program reauthorization provisions previously contained in the 2012 farm bill.

Date of Report: May 16, 2013
Number of Pages: 31
Order Number: RL33816
Price: $29.95

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