Emergency Communications Funding Included in Farm Bill

The five-year bill has bipartisan support, but President Bush threatens a veto because it exceeds his budget guidelines. It isn’t certain if Congress has the votes to override a veto, or if Bush will make good on his threat. The House Rules Committee was expected to set terms of debate in a late Tuesday meeting. Telecom lobbyists said the agreement’s communications provisions could help providers enter and serve rural markets.

“This is a vote of confidence” for the rural broadband program, said Christopher McLean, a former Rural Utilities Service Administrator with eCopernicus, whose clients are in public safety and small broadband. The bill’s new provisions show that lawmakers want the loan program to reach unserved areas, McLean said. “The challenge now is for the agency is to implement the new policy,” he said.

Loans to expand 911 access and interoperable emergency communications would be allowed under the bill, funded from a $690 million telephone loan set aside. The 2002 farm bill didn’t include that provision, whose inclusion now signals congressional intent to improve delivery of such services to rural areas, McLean said. Government-imposed fees for 911 or emergency communications could be used to secure the loans.

The bill sets aside $250 million for the broadband loan program, which would define “rural” such that assistance gets to remote parts of the country with few or no providers. The new definition of “rural” would cover a city, town or incorporated area with fewer than 20,000 residents. Other hallmarks of a “rural area": Having two points at least 40 miles apart and not adjoining a city of more than 150,000 people.

Loans would be limited to areas where fewer than 25 percent of households have only one incumbent service provider, and no more than three incumbent providers serve any part of the proposed service territory. Providers seeking to upgrade service in an area could qualify for loans, and all applicants would have to agree to build out service within three years. Larger providers, defined as serving at least 20 percent of U.S. households, could not get loans in excess of 15 percent of the program’s funding within a fiscal year.

Potential providers might be required to put up their own funding equal to 10 percent or more of the loan, as determined by the Agriculture Department. Providers proposing to serve fewer than 20 percent of a service area’s subscribers could be required to submit a market survey. The department would be asked to develop a pre-application process to give potential providers a sense of whether their business plans would be eligible. This could save companies money by avoiding outlays on projects that don’t fit loan criteria.

The bill would bar Agriculture from setting requirements for bandwidth or speed that could preclude “use of evolving technologies appropriate for rural areas,” the bill said. Loan terms would be tied to Treasury Department costs for “obligations of comparable maturity” with payback terms not to exceed 35 years, if the loan is “adequately secured,” the report said.

Agriculture would have to report annually to Congress on its loan program, identifying communities served, sum loaned and type and speed of broadband service granted assistance. The bill would create a national center for rural telecom assessment to study and report to Congress on loan program operations. The office would get $5 million over five years to do its work.

The FCC and Agriculture would set up a “comprehensive rural broadband strategy” incorporating recommendations for coordination, solutions for “rapid build-out of rural broadband solutions” and federal programs to help meet the goals.