According to the American Cable Association, new rules adopted by the National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) disadvantage small cable operators interested in obtaining broadband stimulus loans and grants.
"ACA is disappointed that NTIA and RUS structurally modified the programs in a way that makes it harder for small cable providers to receive last-mile funding," said ACA President and CEO Matthew Polka, in a statement.
The ACA sent a letter February 2 to Assistant Commerce Secretary and NTIA Administrator Lawrence Strickling and RUS Administrator Jonathan Adelstein outlining its concerns.?
Under last year’s economic stimulus law, Congress provided NTIA and RUS with $7.2 billion in funding for broadband infrastructure loans and grants issued to eligible entities. All funds need to be allocated by September 30, 2010.
Last year, more than 80 ACA member companies applied for broadband stimulus funding for an array of last-mile and middle-mile projects totaling more than $1.3 billion. Of the 80, only one was granted.?
Polka noted that in the rules, RUS opted to increase from 5 to 8 the number of points out of 100 automatically awarded to applicants that have borrowed funds under Title II of the Rural Electric Act of 1936, which are overwhelmingly traditional phone companies.
Moreover, RUS plans to set aside $100 million in grants specifically for satellite broadband targeted at rural unserved areas.?
This decision to bolster incumbent RUS borrowers has taken on greater urgency because NTIA says that most of its $2.6 billion in broadband grants will go to middle-mile projects, while the RUS’s $2.2 billion in grants and loans will mostly go toward building last-mile infrastructure projects.?
“If preference had to be given to past borrowers, we thought 5 points was too much last round. Now, we are perplexed that RUS would make matters worse by increasing that amount to 8 points” Polka said.
NTIA and RUS did respond to some of ACA’s concerns. For example, NTIA eliminated the strict prohibition on the sale of funded facilities within 10 years; RUS eliminated the definition of "remote," thereby broadening access to grants in lieu of loans; and the NTIA eliminated the requirement that certain applicants had to apply with RUS first before being eligible to obtain NTIA grants.