[Federal Register Volume 75, Number 14 (Friday, January 22, 2010)]
[Notices]
[Pages 3820-3837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-1099]
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DEPARTMENT OF AGRICULTURE
Rural Utilities Service
RIN 0572-ZA01
Broadband Initiatives Program
AGENCY: Rural Utilities Service, Department of Agriculture.
ACTION: Notice of Funds Availability (NOFA) and solicitation of
applications.
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SUMMARY: The Rural Utilities Service (RUS) announces its general policy
and application procedures for the second round of funding under the
broadband initiatives (the Second Round NOFA) established pursuant to
the American Recovery and Reinvestment Act of 2009 (Recovery Act) for
the Broadband Initiatives Program (BIP) which provides loans, grants,
and loan/grant combinations to facilitate broadband deployment in rural
areas. In facilitating the expansion of broadband
[[Page 3821]]
communications services and infrastructure, BIP will advance the
objectives of the Recovery Act by spurring job creation and the economy
and by building technological infrastructure that will fuel long-term
economic growth and opportunity.
DATES: Applications will be accepted for Last Mile and Middle Mile
projects from February 16, 2010 at 8 a.m. Eastern Time (ET) until March
15, 2010 at 5 p.m. ET. The application window for Satellite, Technical
Assistance, and Rural Library Broadband Projects will be announced in a
separate request for proposal in the Federal Register.
Application Submission: The application packages for electronic
submissions will be available at http://www.broadbandusa.gov.
Electronic submissions: Electronic submissions of applications will
allow for the expeditious review of an Applicant's proposal, consistent
with the goals of the Recovery Act. As a result, all Applicants for
Last Mile, Middle Mile, and Satellite projects must file their
application electronically. Electronic applications for Last Mile and
Middle Mile projects must be submitted by 5 p.m. ET on March 15, 2010.
The government electronic application system will provide a date and
time stamped confirmation number that will serve as proof of
submission. Only applications for Technical Assistance and Rural
Library Broadband grants will be submitted in paper form. Paper
applications for Technical Assistance and Rural Library Broadband
grants will be available at http://www.broadbandusa.gov once the
request for proposals has been published. Applicants filing paper
copies should submit one original and one copy of the application for
efficient processing.
Proof of Mailing. Paper applications for Technical Assistance and
Rural Library Broadband grants must include proof of mailing consisting
of one of the following: (i) A legibly dated U.S. Postal Service
postmark. Please note that the U.S. Postal Service does not uniformly
provide a dated postmark. Before relying on this method, Applicants
should check with their local post office; (ii) a legible mail receipt
with the date of mailing stamped by the U.S. Postal Service; or (iii) a
dated shipping label, invoice, or receipt from a commercial carrier.
Neither of the following will be accepted as proof of mailing: a
private metered postmark; nor a mail receipt that is not dated by the
U.S. Postal Service.
Mailing Address. Completed applications must be mailed, shipped, or
sent overnight express to: Broadband Initiatives Program, Rural
Utilities Service, U.S. Department of Agriculture, 1400 Independence
Avenue, SW., Stop 1599, Room 2868, Washington, DC 20250.
Or hand-delivered to: Broadband Initiatives Program Rural Utilities
Service, U.S. Department of Agriculture, 1400 Independence Avenue, SW.,
Room 2868 Washington, DC 20250.
Contact Information: For general inquiries, contact David J.
Villano, Assistant Administrator Telecommunications Program, Rural
Utilities Service, U.S. Department of Agriculture (USDA), e-mail:
[email protected], telephone:(877) 508-8364. For inquiries
regarding BIP compliance requirements, including applicable Federal
rules and regulations protecting against fraud, waste and abuse,
contact [email protected]. You may obtain additional
information regarding applications for BIP via the Internet at http://www.broadbandusa.gov.
Authority: This notice is issued pursuant to the American
Recovery and Reinvestment Act of 2009, Public Law 111-5, 123 Stat.
115 (2009) and the Rural Electrification Act of 1936, 7 U.S.C. 901
et seq.
SUPPLEMENTARY INFORMATION:
Catalog of Federal Domestic Assistance (CFDA) Number: Broadband
Initiatives Program (BIP)--10.787.
Additional Items in Supplementary Information
I. Overview: Describes the purposes of the Recovery Act and the
changes in BIP from the First Round NOFA.
II. Definitions: Sets forth the key statutory terms and other
terms.
III. Funding Opportunity Description: Describes funding
categories, requirements, and the amount of funds available for each
category.
IV. Eligibility Information: Establishes eligibility criteria,
eligibility factors, eligible and ineligible costs, and other
eligibility requirements.
V. Application and Submission Information: Provides information
regarding how to apply, application materials, and the application
process.
VI. Application Evaluation Criteria: Establishes the evaluation
criteria for application review.
VII. Waiver for Grants Capped at (75%) of Award for Last Mile
and Middle Mile Projects: Establishes waiver procedures for larger
grant component.
VIII. Award Administration Information: Provides award notice
information, administrative and national policy requirements, terms
and conditions, and other reporting requirements for award
recipients.
IX. Other Information: Sets forth guidance on funding,
compliance with various laws, confidentiality, discretionary awards,
and authorized signatures.
I. Overview
A. Background
On February 17, 2009, President Obama signed the American Recovery
and Reinvestment Act of 2009 (Recovery Act) into law.\1\ The essential
goal of the Recovery Act is to provide a ``direct fiscal boost to help
lift our Nation from the greatest economic crisis in our lifetimes and
lay the foundation for future growth.'' \2\ Accordingly, the Recovery
Act identifies five overall purposes: (1) To preserve and create jobs
and promote economic recovery; (2) to assist those most impacted by the
recession; (3) to provide investments needed to increase economic
efficiency by spurring technological advances in science and health;
(4) to invest in transportation, environmental protection, and other
infrastructure that will provide long-term economic benefits; and (5)
to stabilize state and local government budgets.\3\ The Recovery Act
further instructs the President and the heads of Federal departments
and agencies to manage and expend Recovery Act funds to achieve these
five purposes, ``commencing expenditures and activities as quickly as
possible consistent with prudent management.'' \4\
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\1\ American Recovery and Reinvestment Act of 2009, Public Law
111-5, 123 Stat. 115 (2009).
\2\ President Obama, Statement on Signing the American Recovery
and Reinvestment Act of 2009 (Feb. 17, 2009).
\3\ Recovery Act sec. 3(a), 123 Stat. at 115-16.
\4\ See id. Sec. 3(b), 123 Stat. at 116.
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Consistent with the purposes described above, the Recovery Act
provided RUS with $2.5 billion to expand access to broadband services
in rural America. The Recovery Act expanded RUS' existing authority to
make loans and provided new authority to make grants for the purpose of
facilitating broadband deployment in rural communities. The Recovery
Act specifically made Federal assistance available for grants and loans
to enhance service in areas which are at least 75 percent rural and
``without sufficient access to high speed broadband service to
facilitate rural economic development.''
On July 9, 2009, RUS and the National Telecommunication Information
Administration (NTIA) issued a joint Notice of Funds Availability at 74
FR 33104 governing the first round of Recovery Act broadband funding
under BIP and NTIA's Broadband Technology Opportunity Program (BTOP).
Under this first round Notice (the First Round
[[Page 3822]]
NOFA), RUS made approximately $2,400,000,000 in funding available for
BIP. Approximately 2,200 applications seeking $28 billion in Federal
financial assistance were submitted in response to the First Round
NOFA.
The First Round NOFA opened BIP to a wider range of Applicants and
projects than the RUS' traditional programs. This enabled RUS to get a
better understanding of the type of applications available to meet the
need for broadband services in rural areas. With that experience, RUS,
working in conjunction with NTIA's BTOP, is focusing the second round
funding on rural economic development in addition to continuing the
effort of the First Round NOFA to reach unserved and underserved areas.
RUS has qualified for funding any rural area that does not have
broadband service at the rate of 5 Megabits/second (Mbps) (upstream and
downstream combined) in at least 50 percent of its area. RUS has
determined that rural areas without service at 5 Mbps (upstream and
downstream combined) lack high speed broadband service sufficient to
facilitate rural economic development as required by the Recovery Act.
In this Second Round NOFA, RUS and NTIA have determined that the
best use of limited funding is to have RUS and NTIA focus on funding
different aspects of broadband infrastructure. RUS will concentrate on
funding Last Mile projects. With decades of experience of financing
telecommunications infrastructure in rural America, RUS is uniquely
equipped to focus on Last Mile rural projects. However, it is still
important for RUS to continue funding certain Middle Mile projects to
ensure all proposed rural economic development strategies incorporating
broadband technology are given full consideration by an Agency whose
mission is rural development. As a result, RUS will still consider
funding Middle Mile projects, but strongly encourages such projects
only be undertaken by current RUS loan or grant recipients, given the
complexity of such projects, the amount of time to close these deals
with respect to RUS' statutory lien on project assets and any other
debt or equity holders, and the limited timeframe available before
Recovery Act funds expire. Additionally, NTIA has proposed in its
second NOFA a Comprehensive Communities Infrastructure initiative that
will fund Middle Mile infrastructure projects that include connections
to community anchor institutions. As a result, RUS highly recommends
that all other Middle Mile applicants consider applying to BTOP. Based
on these considerations and in consideration of the multitude of
comments filed in response to the Request for Information released on
November 10, 2009, at 74 FR 58940, RUS has determined to make the
following changes:
B. Application Changes From the First Round NOFA
1. Funding Categories
a. Retained and Eliminated Categories
In the First Round NOFA, RUS made funds available for three types
of projects: Last Mile, Middle Mile and Last Mile Remote. This NOFA has
retained funding for Last Mile projects and Middle Mile Projects, and
eliminated the funding category for Last Mile Remote projects.
b. New Categories
It is essential to make every effort in this NOFA to reach unserved
premises. A separate Satellite Project category has been established to
reach premises left unserved by other technologies.
Lastly, two funding purposes, Rural Library Broadband and Technical
Assistance, have been added to allow Awardees the opportunity to adjust
projects to include service to rural libraries and participation with
rural economic development strategies.
2. Modification of Eligible Service Areas
In this Second Round of funding RUS has focused its efforts on
rural economic development in addition to continuing to reach unserved
rural areas. RUS has qualified for funding any rural area in which at
least 50 percent of the premises in the area do not have access to
broadband service at the rate of 5 Mbps (upstream and downstream
combined). RUS has determined that these areas lack high speed
broadband service sufficient to facilitate rural economic development
as required by the Recovery Act. Service offerings must still be within
proposed funded service areas which are at least 75 percent rural as
required by the Recovery Act.
3. Change in Loan/Grant Award Allocation
The First Round NOFA provided that all successful applications
would receive an award comprised of 50 percent loan and 50 percent
grant (50/50 loan/grant combination), except for rural remote projects
which could receive up to 100 percent grant funding. Rural remote areas
were defined as those unserved 100 percent rural areas which were
located 50 miles or more from non-rural areas. This Second Round NOFA,
however, combines rural remote and rural non-remote funding and
therefore has a standard award of 75/25 grant/loan combination. It is
important to note that applicants requesting a larger loan component
will be awarded more points in the scoring system and may have a
greater likelihood of being funded. Applicants may request more than a
75 percent grant component by submitting a waiver request to the
Administrator, which demonstrates their need for additional grant
funding in accordance with the requirements of this Second Round NOFA.
The waiver request will be addressed at the time any award is offered.
The Administrator has the authority to award grants up to 100 percent.
4. No Joint RUS/NTIA Application
Because the Recovery Act prohibits a project from receiving funding
from NTIA in areas where RUS has funded a project, the first NOFA
required Applicants to submit infrastructure applications consisting of
proposed funded service areas which were at least 75 percent rural to
RUS to be considered under BIP, with the option of additional
consideration under BTOP. The first NOFA provided that NTIA would not
fund such an application unless RUS had declined to fund it. In
response to comments from stakeholders during the initial round of
funding, the agencies' Request For Information invited public comment
on whether the agencies should continue to require that these kinds of
rural infrastructure applications be submitted to RUS first or whether
the agencies should permit Applicants to file rural applications
directly to NTIA without also having to submit them to RUS.\5\
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\5\ See 74 FR at 58941.
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The majority of commenters agree that rural Applicants should be
permitted to apply directly to NTIA for BTOP grants without being
required to first apply to RUS for BIP loans or grants.\6\ The most
widely cited rationale was the burden imposed on Applicants to provide
the additional financial analysis required by the RUS loan application
for rural projects that do not qualify as remote and unserved or are
not viable with only 50 percent grant funding.\7\ Commenters also cite
the inefficiency of requiring RUS to review proposals that are not
viable for BIP.\8\
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\6\ See, e.g., Massachusetts Executive Office of Housing and
Economic Development at 3-4; American Library Association at 7.
\7\ See, e.g., TCA at 1-2 (Nov. 30, 2009).
\8\ See, e.g., XO Communications at 2 (Nov. 30, 2009); TCA at
1-2.
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A majority of commenters favor the continued use of a common BIP-
BTOP
[[Page 3823]]
application to avoid the duplicative effort of completing multiple
applications.\9\ A few of these commenters favor maintaining the
initial round of funding's BIP-first rule requiring concurrent joint
applications and reserving to RUS the first option to fund eligible
proposals.\10\ The chief benefit adduced in support of this position is
RUS' expertise in evaluating rural applications so as to avoid
redundant awards to ``active'' RUS borrowers.\11\ Commenters further
recommend that the agencies implement a ``check box'' by which an
Applicant may request immediate consideration by NTIA because its rural
project requires more than a 50 percent grant to be viable or seeks to
address one of NTIA's broadband objectives.\12\ They also recommend
allowing Applicants to produce only one financial analysis to
demonstrate an ability to support either a 50 percent contribution (as
required for BIP) or a 20 percent contribution (as required for BTOP)
to a project.\13\
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\9\ See, e.g., Texas Statewide Telephone Cooperative at 5 (Nov.
25, 2009).
\10\ See, e.g., Vantage Point Solutions at 5-7; Rural Community
Assistance Partnership at 2 (Nov. 19, 2009); RVW Inc. at 2; Mid-
Rivers Communications at 6-7 (Dec. 1, 2009); South Dakota
Telecommunications Association at 5, 11 (Nov. 30, 2009).
\11\ See, e.g., Mid-Rivers Communications at 6.
\12\ See, e.g., National Rural Telecommunications Cooperative
and DigitalBridge Communications Corp. at 6-7 (Nov. 30, 2009).
\13\ See, e.g., John Staurulakis, Inc. at 18; TCA at 1-2.
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RUS and NTIA agree with the majority of commenters who argue that
the ``BIP-first'' requirement of the initial funding round added an
additional unnecessary burden for many Applicants. In this funding
round, RUS and NTIA conclude that Applicants that are eligible for both
BIP and BTOP funding may elect to apply directly to either NTIA for
BTOP grants or RUS for BIP loans or loan/grants. However, both agencies
strongly recommend that current RUS loan or grant recipients apply to
BIP. Applicants may not apply to both agencies for the same grant
project or for a substantially similar project.
RUS believes that the elimination of joint applications will
significantly streamline RUS' internal review of applications.
Moreover, the joint application process was burdensome on the
Applicants. Eliminating this option is critical to ensuring that RUS is
able to carry out its review in a timely manner, and that applications
will be funded before the statutory deadline of September 30, 2010.
5. Elimination of Two-Step Application Process
The first round NOFA provided for a two-step application process.
Under this process, the bulk of the materials required from the
Applicant were sought with the application. Once this material was
evaluated, RUS made an initial determination as to whether the
application would likely be funded. If so, the application was moved
into a second review process in which additional information was
requested from the Applicant. The Applicant was given an additional 30
days to provide it.
Although commenters generally had few problems with the two-step
review process, several commenters argued persuasively that doing away
with the two-step review process in favor of a simplified one-step
process would streamline the application process.
After an evaluation of the first round applications and
consideration of the comments received, RUS determined that a one-step
application process will best streamline BIP. Removal of the second
step simplifies the application process, and adds valuable time to both
the application window and the Agency review process. This clearly
promotes the submission of more solid applications.
6. Cost Effectiveness/Reasonableness
To effectively leverage Recovery Act broadband funds for last mile
projects, RUS will limit Federal assistance to no more than $10,000 per
premises passed, unless a waiver is requested from the Administrator.
The Administrator will consider such requests based on whether the
application provides assistance to a significant number of critical
community facilities, supports a recognized rural regional development
plan, supports public safety projects, enhances broadband service to
rural libraries, supports persistent poverty counties or substantially
unserved areas, including Indian country. If the waiver request is
denied, any award may be made contingent on improving cost
effectiveness, or the application may be placed in the second review
process and the Applicant will have an opportunity to revise its
proposal.
7. Elimination of Census Block Reporting
The First Round NOFA required that Applicants report their proposed
funded service territories on a census block basis. It was thought that
this level of granularity was necessary to evaluate applications;
however, reporting at the census block level imposed a significant
burden on Applicants.
A majority of the commenters advocate abandoning Census blocks in
favor of other means of specifying proposed funded service areas.\14\
Commenting municipalities and cities unanimously express their
dissatisfaction with the use of Census block data, citing it as a
cumbersome method of reporting proposed funded service area
designations.\15\ Multiple commenters offer zip codes, city boundaries,
or even latitude and longitude coordinates as less burdensome
alternatives for Applicants.\16\ Several commenters propose using
Census tract data as a less burdensome alternative to census block
data, in part because broadband service providers are already required
to report their subscriber and demographic information according to
census tracts in order to file FCC Form 477.\17\
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\14\ See, e.g., NCTH-Cleartalk at 1 (Nov. 21, 2009);
Commonwealth of Pennsylvania at 4; Satellite Industry Association at
4 (Nov. 30, 2009); New America Foundation at 21 (Nov. 30, 2009).
\15\ See, e.g., Montgomery Co. at 2 (Nov. 30, 2009); Oakland Co.
at 1 (Nov. 30, 2009); City of New York at 2; City of San Francisco
at 3 (Nov. 30, 2009).
\16\ See, e.g., Open Range Communications at 4 (Nov. 30, 2009);
Center of Social Inclusion at 2; Harris Corp at iii (Nov. 30, 2009).
\17\ See, e.g., John Staurulakis, Inc. at 14 (Nov. 30, 2009);
Rural Broadband Corp. at 7.
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For the Second Round NOFA, RUS has eliminated census block
reporting. This requirement created unnecessary problems in the
application process. Moreover, the present state of the mapping tool
already identifies the affected census blocks as the Applicant draws
its service territory. The elimination of this burden will allow
Applicants to focus more time on the technical issues and feasibility
of their application.
8. Elimination of Paper Applications for Last Mile and Middle Mile
Projects
The First Round NOFA required that most applications for BIP be
filed electronically. However, it provided an exception for certain
Applicants to file their applications on paper.\18\ For the Second
Round NOFA, RUS has eliminated paper applications for Last Mile and
Middle Mile projects. RUS did not receive many paper applications in
round one. Nevertheless, since paper applications have to be manually
input into the electronic application system, their processing
considerably slowed
[[Page 3824]]
RUS' application review process and diverted limited resources. Since
Last Mile, Middle Mile, and Satellite projects are anticipated to be
the most lengthy and complex applications, as well as constituting the
largest pool of applications, RUS now requires that they be submitted
in electronic form. A major justification identified in the First Round
NOFA for allowing the submission of paper applications concerned the
need to provide an alternative means of submitting applications by
individuals with disabilities. RUS has determined that the electronic
application intake system that will be used during the second round of
funding complies with the requirements of the Rehabilitation Act.
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\18\ Applicants requesting less than $1 million in assistance
(in the form of grants, loans, or a combination of grants and loans)
were allowed to file their applications in a paper format for the
first round NOFA, if filing electronically would impose a hardship
on the Applicants. Applicants whose authorized representatives were
individuals with disabilities were also allowed to file their
applications in a paper format irrespective of the funding size of
their request.
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9. Reconsideration of Applications
a. Second Review
If RUS expects to have excess funding capacity in the Second Round
NOFA, the RUS Administrator may permit Applicants to adjust
applications for reconsideration that would otherwise not be funded.
RUS will reconsider only such applications which can be updated,
reviewed and awarded funds before the expiration of Recovery Act
funding, contain specific and limited adjustments, and promote
significant economic rural development, as determined by the
Administrator. Those applications that are considered for Second Review
will not be permitted to redo the application, but only provide the
supplemental information the Agency has requested. This will require a
very stringent timeline for the Applicant and RUS. Any application that
is processed under this procedure will be funded only after all
properly submitted applications have been funded and will be subject to
all applicable requirements under this NOFA.
b. Transferability
Under this NOFA, RUS will accept applications from NTIA that it
determines it will not fund, but that may be consistent with RUS' BIP
requirements and priorities. RUS will handle such applications, if
timely received from NTIA, under its Second Review process outlined in
this NOFA.
10. Administrator's Discretion
RUS has determined that in the Second Round NOFA, the Administrator
will have the opportunity to exercise discretion in the application
evaluation process in several ways to ensure the best mix of approved
applications consistent with the purposes of BIP. One of the ways to
exercise such discretion is for the Administrator to have the ability
to separately award priority points and larger grant components to
applications that provide significant assistance to critical community
facilities (including libraries), promote rural economic development,
support persistent poverty counties, serve chronically underserved
areas, demonstrate cost effectiveness, offer low-cost service options,
and/or provide for geographic diversity.
II. Definitions
The terms and conditions provided in this NOFA are applicable to
and for purposes of this NOFA only. Unless otherwise provided in the
award documents, all financial terms not defined herein shall have the
meaning as defined by Generally Accepted Accounting Principles.
Administrator means the RUS Administrator, or the Administrator's
designee.
Applicant means an entity requesting an award under this NOFA, and
where applicable, the First Round NOFA.
Award documents mean, as applicable, the grant documents, loan
documents, or loan/grant combination documents.
Award means a grant, loan, or loan/grant combination made under
this NOFA.
Awardee means a grantee, borrower, or borrower/grantee under this
NOFA.
BIP means the Broadband Initiatives Program, administered by the
RUS, under the Recovery Act.
Broadband means providing two-way data transmission with advertised
speeds of at least 768 kilobits per second (kbps) downstream and at
least 200 kbps upstream to end users, or providing sufficient capacity
in a middle mile project to support the provision of broadband service
to end users.
Build-out means the construction or improvement of facilities and
equipment as specified in an Applicant's application.
CALEA means the Communications Assistance for Law Enforcement Act,
47 U.S.C. 1001 et seq.
Composite economic life means the weighted (by dollar amount of
each class of facility) average economic life of all classes of
facilities financed under this NOFA.
Critical community facilities means public facilities that provide
community services essential for supporting the safety, health, and
well-being of residents, including, but not limited to, emergency
response and other public safety activities, hospitals and clinics,
libraries and schools.
Current ratio means the current assets divided by the current
liabilities.
Economic life means the estimated useful service life of an asset
as determined by RUS.
Forecast period means the time period used by RUS to determine if
an application is financially feasible. Financial feasibility of an
application is based on five-year projections.
GAAP means generally accepted accounting principles.
Grant agreement means the agreement between RUS and the Awardee for
grants awarded under this NOFA, including any amendments thereto,
available for review at http://www.broadbandusa.gov.
Grant documents mean the grant agreement and security documents
between the RUS and the Awardee and any associated documents pertaining
to the grant.
Grant funds mean Federal funds provided pursuant to a grant made
under this NOFA.
High Speed Access means high speed broadband service to facilitate
rural economic development, or service at the rate of at least 5 Mbps
(upstream and downstream combined).
Interconnection Point means the termination point of a Middle Mile
project.
Last Mile project means any terrestrial infrastructure project the
predominant purpose of which is to provide broadband service to end
users or end-user devices (including households, businesses, public
safety entities, and critical community facilities).
Loan means any loan made under this NOFA.
Loan contract means the loan agreement between RUS and the Awardee,
including all amendments thereto, available for review at http://www.broadbandusa.gov.
Loan documents mean the loan contract, note(s), and security
documents between the Awardee and RUS and any associated documents
pertaining to the loan.
Loan/grant means any loan/grant combination made under this NOFA.
Loan/grant contract means the loan/grant contract between RUS and
the Awardee, including all amendments thereto available at http://www.broadbandusa.gov.
Loan/grant documents mean the loan/grant contract, note(s), and
security documents between the Awardee and RUS and any associated
documents pertaining to the loan/grant.
Middle Mile project means any broadband infrastructure project the
predominant purpose of which is to provide interoffice transport,
backhaul,
[[Page 3825]]
internet connectivity, or special access (including point-to-point
projects), which furthers rural economic development, submitted in an
application or co-application.
Pre-application expense means any reasonable expense incurred after
the release of this NOFA to prepare an application or to respond to RUS
inquiries about the application, including engineering costs and
accountant/consultant fees.
Proposed funded service area means, for Last Mile projects, the
contiguous area (either in all or part of an existing service area or a
new service area) where the Applicant is requesting funds to provide
broadband service pursuant to this NOFA. An Applicant may propose to
serve more than one proposed funded service area. For Middle Mile
projects, the proposed funded service area shall be the locations of
the proposed interconnection points.
RE Act means the ``Rural Electrification Act of 1936,'' as amended
(7 U.S.C. 901 et seq.).
Recovery Act means the American Recovery and Reinvestment Act of
2009, Public Law 111-5, 123 Stat. 115 (2009).
Rural area means any area, as confirmed by the latest decennial
census of the Bureau of the Census, which is not located within: (1) a
city, town, or incorporated area that has a population of greater than
20,000 inhabitants; or (2) an urbanized area contiguous and adjacent to
a city or town that has a population of greater than 50,000
inhabitants. For purposes of the definition of rural area, an urbanized
area means a densely populated territory as defined in the latest
decennial census of the Bureau of the Census.
Rural Library means a library in a rural area.
RUS Accounting Requirements shall mean compliance with U.S. GAAP,
acceptable to RUS, as well as compliance with the requirements of the
applicable regulations: 7 CFR 3015, 3016, or 3019 (for BIP Awardees in
these CFRs the term grant recipient shall also mean loan recipient and
loan/grant recipient) or the system of accounting prescribed by RUS
Bulletin 1770B-1.
Satellite Project means any project to provide satellite broadband
service to unserved rural premises (including households, businesses,
public safety entities, and critical community facilities), either by
funding customer-premises equipment, terrestrial equipment, and/or
discounted broadband service for at least one year.
Security document means any mortgage, deed of trust, security
agreement, financing statement, or other document that RUS determines
is necessary to perfect its interest in the security for a loan, grant,
or loan/grant.
Service area means the area, including the proposed funded service
area, where the Applicant offers or intends to offer any service.
TIER means times interest earned ratio. TIER is the ratio of an
Applicant's net income (after taxes) plus (adding back) interest
expense, all divided by interest expense (existing and any new interest
expense including the interest expense associated with the proposed
loan).
Unserved area means a service area with no access to facilities-
based, terrestrial broadband service, either fixed or mobile, at the
minimum broadband transmission speed (set forth in the definition of
broadband in this section). A premises has access to broadband service
if it can readily subscribe to that service upon request.
III. Funding Opportunity Description
A. Funding Categories
1. Last Mile Projects
Applications for Last Mile projects must predominantly provide
broadband service directly to the premises or to end users. Only those
applications whose proposed funded service area contains 75 percent or
more rural areas, within which not more than 50 percent of the premises
in the rural areas have High Speed Access will be considered for
funding. The standard award is a grant/loan combination of 75 percent
grant and 25 percent loan. Applicants may request a waiver for more
than 75 percent grant in accordance with Section VII of this NOFA, or
may request a greater percentage of loan.
2. Middle Mile Projects
RUS strongly encourages applications for Middle Mile projects from
current RUS loan and grant recipients. Such projects are complex and
more difficult to close, especially given the limited timeframe
available before Recovery Act funds expire.
Applicants must propose that at least 75 percent of the
interconnection points be in rural areas with no more than 50 percent
of the premises having High Speed Access. The communities in which the
interconnection points terminate shall be used to determine the
percentage of High Speed Access. For those interconnection points which
do not terminate in any recognizable community, the nearest Census
Designated Place shall be used. Middle Mile projects must provide
interoffice transport, backhaul, internet connectivity, or special
access (including point-to-point projects). The standard award is a
grant/loan combination of 75 percent grant and 25 percent loan.
Applicants may request a waiver for more than 75 percent grant in
accordance with Section VII of this NOFA, or may request a greater
percentage of loan.
3. Satellite Projects
Given the importance of efforts to reach unserved premises, a
separate Satellite Project category has been established to reach
premises left unserved by other technologies. Subsequent to the opening
of the window for Last Mile and Middle Mile projects, the Agency will
publish a Request for Proposals for Satellite Projects, including the
announcement of the funding allocation.
Applicants must propose to serve only unserved rural premises in
any of the regions listed in Section IX.T of this NOFA. Applicants may
propose to serve more than one region; however, Applicants must submit
applications which are broken out for each region. Only one Applicant
will be selected to serve a region.
At a minimum, an application must commit to providing broadband
service, to providing customer-premises equipment (CPE) to subscribers
at no cost (including no costs for installation, activation, or other
hidden fees) and to providing to such subscribers at least a 25 percent
reduction in the Applicant's service rates as of December 1, 2009, for
a term of at least one year.
Subsequent to the opening of the window for Last Mile and Middle
Mile projects, the Agency will publish a Request for Proposals for
Satellite grants, including the announcement of the funding allocation
and the requirements of the application. The funding award for
Satellite Projects is grant funding.
4. Technical Assistance Grants
Awardees under the First Round NOFA or Applicants under this NOFA
may submit a request for an additional grant for funding for the
purpose of developing regional broadband development strategies in
rural areas. Technical Assistance grants may be used for the
development of a USDA-recognized regional strategy. Under this program,
Technical Assistance Awardees will work in public/private partnerships
to develop a USDA-approved regional plan to provide broadband service
in rural areas that remain critically unserved. In addition, in order
to foster cross collaboration with other related Federal programs,
[[Page 3826]]
Technical Assistance plans may be used by Applicants for submission to
other Federal agencies, including programs of the Department of
Transportation, Homeland Security, the Federal Communications
Commission (FCC), and Telemedicine Program of the Indian Health
Service. By fostering the development of rigorous regional broadband
strategies, RUS anticipates that Technical Assistance Awardees will
also be able to submit more focused applications in the future to RUS
Infrastructure Telecommunications, RUS' Rural Broadband Access,
Community-Oriented Connectivity Broadband, and Distance Learning and
Telemedicine grant and loan programs.
Grants for Technical Assistance will be made in an amount up to
$200,000. RUS, in its discretion, may decrease the requested award
amount based on its evaluation of an application and based on the level
of funding available for this program.
Subsequent to the opening of the window for Last Mile and Middle
Mile projects, the Agency will publish a Request for Proposals for
Technical Assistance grants, including the announcement of the funding
allocation and the requirements of the application. Applications for
Technical Assistance grants will be accepted in paper-form only (the
Easy Grants System will not be used to accept Technical Assistance
grant applications), as set forth in the Request for Proposals.
5. Rural Library Broadband Grants
Awardees from the First Round NOFA or Applicants under this NOFA
may submit a request for a grant to reimburse the associated costs for
connecting any rural library in their proposed funded service area,
being constructed, or to be constructed, with funding from an award
from USDA's Community Facilities program of the Rural Housing Service.
Such costs need not have been addressed in the original application
submitted under the First Round NOFA or Second Round NOFA.
Subsequent to the opening of the window for Last Mile and Middle
Mile projects, the Agency will publish a Request for Proposals for
Rural Library Broadband grants, including the announcement of the
funding allocation and the requirements of the application.
Applications for Rural Library Broadband grants will be accepted in
paper-form only, as set forth in the Request for Proposals.
B. Available Funds
1. General
Approximately $2,200,000,000 in funding has been set aside for
funding opportunities under this NOFA.\19\
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\19\ This amount may be increased to include unobligated funds
from the First Round NOFA.
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2. Funding Limits
Award amounts under this NOFA will be limited as follows:
a. Last Mile Projects
Up to $1,700,000,000 is available for loans or loan/grant
combinations for Last Mile projects.
b. Middle Mile Projects
Up to $300,000,000 is available for loans or loan/grant
combinations for Middle Mile projects.
c. Satellite Project, Rural Library Broadband, and Technical Assistance
Projects
Up to $100,000,000 is available for grants for Satellite projects,
as well as any and all funds not obligated for Last Mile and Middle
Mile projects; and up to $5,000,000 is available for grants for Rural
Library Broadband and Technical Assistance projects.
d. Reserve
Up to $95,000,000 is available for a reserve.
3. Repooling
RUS retains the discretion to divert funds from one category of
projects to another.
4. Award Period
All awards must be made and funding obligated by September 30,
2010. While the completion time will vary depending on the complexity
of the project, award recipients must substantially complete projects
supported by this program within two years, and projects must be fully
completed within three years of the date of issuance of the award.
5. Type of Funding Instrument
The funding instruments will be grants, loans, and loan/grant
combinations.
IV. Eligibility Information
A. General
Applicants must satisfy the following eligibility requirements to
qualify for funding.
B. Eligible Entities
1. Last Mile and Middle Mile Projects
The following entities are eligible to apply for assistance:
a. States, local governments, or any agency, subdivision,
instrumentality, or political subdivision thereof;
b. A territory or possession of the United States;
c. An Indian tribe (as defined in section 4 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b));
d. A native Hawaiian organization;
e. A non-profit foundation, a non-profit corporation, a non-profit
institution, or a non-profit association;
f. Other non-profit entities;
g. For-profit corporations;
h. Limited liability companies; and
i. Cooperative or mutual organizations.
2. Satellite Projects
a. A satellite Internet Service Provider (ISP);
b. A reseller of satellite ISP service;
c. A distributor or dealer of satellite ISP service; and
d. A consortium of a, b, or c above.
C. Application Eligibility Factors for Last Mile and Middle Mile
Projects
The following eligibility factors establish basic requirements that
all Applicants must comply with in order to be eligible for an award.
Applicants failing to comply with these requirements will not have
their applications considered.
1. Fully Completed Application
Applicants must submit a complete application and provide all
supporting documentation required for the application.
2. Timely Completion
A project is eligible only if the application demonstrates that the
project can be ``substantially completed'' within two years of the date
of issuance of the award and fully complete within three years of the
date of the award. A project is considered ``substantially complete''
when an Awardee has received 67 percent of its award funds.
3. Technical Feasibility
Only projects that RUS determines to be technically feasible will
be eligible for an award under this NOFA. Applicants will be required
to submit a system design, network diagram and project timeline,
certified by a professional engineer, for any application requesting
funds over $1 million.
[[Page 3827]]
4. Nondiscrimination and Interconnection \20\
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\20\ Nothing herein shall be construed to affect the
jurisdiction of the Federal Communications Commission with respect
to such matters.
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All Applicants must commit to the following Nondiscrimination and
Interconnection Obligations: (a) Adhere to the principles contained in
the FCC's Internet Policy Statement (FCC 05-151, adopted August 5,
2005) or any subsequent ruling or statement; (b) not favor any lawful
Internet applications and content over others; (c) display any network
management policies in a prominent location on the service provider's
Web page and provide notice to customers of changes to these policies
(Awardees must describe any business practices or technical mechanisms
they employ, other than standard best efforts Internet delivery, to
allocate capacity; differentiate among applications, providers, or
sources; limit usage; and manage illegal or harmful content); (d)
connect to the public Internet directly or indirectly, such that the
project is not an entirely private closed network; and (e) offer
interconnection, where technically feasible without exceeding current
or reasonably anticipated capacity limitations, on reasonable rates and
terms to be negotiated with requesting parties. This includes both the
ability to connect to the public Internet and physical interconnection
for the exchange of traffic. Applicants must disclose their proposed
interconnection, nondiscrimination and network management practices
with the application.
All these requirements shall be subject to the needs of law
enforcement and reasonable network management. Thus, Awardees may
employ generally accepted technical measures to provide acceptable
service levels to all customers, such as caching (including content
delivery networks) and application-neutral bandwidth allocation, as
well as measures to address spam, denial of service attacks, illegal
content, and other harmful activities.
In addition to providing the required connection to the Internet,
Awardees may offer managed services, such as telemedicine, public
safety communications, distance learning, and virtual private networks
that use private network connections for enhanced quality of service,
rather than traversing the public Internet. In evaluating the
reasonableness of network management techniques, RUS will be guided by
any applicable rules or findings established by the FCC, whether by
rulemaking or adjudication.
An Awardee may satisfy the requirement for interconnection by
negotiating in good faith with all parties making bona fide requests.
The Awardee and requesting party may negotiate terms such as business
arrangements, capacity limits, financial terms, and technical
conditions for interconnection. If the Awardee and requesting party
cannot reach agreement, they may voluntarily seek an interpretation by
the FCC of any FCC rules implicated in the dispute. If an agreement
cannot be reached within 90 days, the party requesting interconnection
may notify RUS in writing of the failure to reach satisfactory terms
with the Awardee. The 90-day limit is to encourage the parties to
resolve differences through negotiation.
With respect to non-discrimination, those who believe an Awardee
has failed to meet the non-discrimination obligations should first seek
action at the FCC of any FCC rules implicated in the dispute. If the
FCC chooses to take no action, those seeking recourse may notify RUS in
writing about the alleged failure to adhere to commitments of the
award.
Entities that successfully reach an agreement to interconnect with
a system funded under BIP may not use that interconnection agreement to
provide services that duplicate services provided by projects funded by
outstanding telecommunications loans made under the RE Act. Further,
interconnection may not result in a BIP-funded facility being used for
ineligible purposes under the Recovery Act.
These conditions apply to the Awardee and will remain in effect for
the life of the Awardee's federally funded facilities and equipment
used in the project. These conditions will not apply to any existing
network arrangements or to non-Awardees using the network. Note,
however, that the Awardee may negotiate contractual covenants with
other broadband service providers engaged to deploy or operate the
network facilities and pass these conditions through to such providers.
Awardees that fail to accept or comply with the terms listed above may
be considered in default of their loan or grant agreements. RUS may
exercise all available remedies to cure the default.
5. Service Areas
a. Eligible Service Areas for Last Mile and Middle Mile Projects
Applications for Last Mile projects must predominantly provide
broadband service directly to the premises or to end users in a
proposed funded service area(s) that is/are 75 percent or more rural,
within which not more than 50 percent of the premises in the rural
areas have High Speed Access.
Applications for Middle Mile projects must provide interoffice
transport, backhaul, internet connectivity or special access to
interconnection points. At least 75 percent of the interconnection
points must be in rural areas with no more than 50 percent of the
premises having High Speed Access. The communities in which the
interconnection points terminate shall be used to determine the
percentage of High Speed Access. For those interconnection points which
do not terminate in any recognizable community, the nearest Census
Designated Place shall be used.
b. Ineligible Service Areas for Last Mile and Middle Mile Projects
i. Overlapping Service Areas
RUS will not fund more than one project to serve any given
geographic area. If more than one application would serve any
overlapping geographic area, the application with the highest score
will be funded; other applications for the same area will be rejected
in their entirety unless RUS, in its discretion, determines that the
extent of the overlap is de minimis, or less than 25 percent of each
application's entire proposed funded service area. Notwithstanding,
RUS, in its discretion, may readjust the proposed funded service area
in any offer of funding to eliminate overlapping areas between one or
more applications in order to promote rural economic development. The
Agency's proposal for service area readjustment may include a
requirement that the Applicant will not compete in the excluded service
area.
For the purposes of the Agency's determination of overlap, funding
categories will not be subject to overlap analysis. For example, Last
Mile projects shall not be considered to overlap with Middle Mile
projects.
ii. Incumbent Service Areas
For all applications, the existing service area of RUS borrowers in
which they provide broadband service shall not be eligible. These areas
can be found at http://www.broadbandUSA.gov. In addition, the service
areas of Awardees under the first round BIP/BTOP NOFA shall also be
ineligible for funding.
6. Fully Funded
A project is eligible only if, after approval of the award, all
project costs can be fully funded. To demonstrate this, Applicants must
include with the application evidence of all funding,
[[Page 3828]]
other than the RUS award, necessary to support the project, such as
bank account statements or firm letters of commitment from equity
participants or other lenders documenting the timely availability of
funds. Equity partners that are not specifically identified by name
will not be considered in the financial analysis of the application.
7. Financial Feasibility and Sustainability
Only projects that RUS determines to be financially feasible, and/
or sustainable will be eligible for an award under this NOFA. A project
is financially feasible when the Applicant is able to generate
sufficient revenues to cover its expenses, has sufficient cash flow to
service its debts and obligations as they come due, and meet the
minimum TIER requirement of one and generate a minimum current ratio of
one by the end of the forecast period, as determined by RUS. In
addition, the project must also demonstrate a positive cash balance for
each year of the forecast period.
8. Leveraging of Recovery Act Funds
In order to leverage funds to provide Federal assistance cost-
effectively to the maximum number of eligible projects so as to ensure
that as many households as possible that do not have sufficient access
to high speed broadband will receive service, RUS has determined to
limit Federal assistance under this NOFA for Last Mile projects to
$10,000 per premises passed in the proposed funded service area, unless
a waiver is requested from the Administrator. The Administrator may
waive this funding limitation if he determines that the application
provides assistance to a significant number of critical community
facilities, supports a recognized rural regional development plan,
supports public safety projects, enhances broadband service to rural
libraries, or supports persistent poverty counties or chronically
unserved areas such as Indian country. If the waiver request is denied,
any award may be made contingent on improving cost effectiveness, or
the application may be placed in the second review process and the
Applicant will have an opportunity to revise its proposal. To calculate
the cost per premises passed, the Applicant shall divide the total
award requested in the application by the total number of premises
passed with facilities funded by an award.
9. Service Requirements
Projects must provide broadband service proposed in the application
for the composite economic life of the facilities, as approved by RUS,
or as provided in the Award Documents for 100 percent grants, starting
from the date of project completion.
D. Eligible Cost Purposes
1. General
Award funds must be used only to pay for eligible costs. Eligible
costs must be consistent with the cost principles identified in the
applicable OMB circulars.\21\ In addition, costs must be reasonable,
allocable, necessary to the project, and comply with the Recovery Act
requirements. Any application that proposes to use any portion of the
award funds for any ineligible cost will be rejected.
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\21\ For example, there is a set of Federal principles for
determining eligible or allowable costs. Allowability of costs will
be determined in accordance with the cost principles applicable to
the entity incurring the costs. Thus, allowability of costs incurred
by state, local or federally-recognized Indian tribal governments is
determined in accordance with the provisions of OMB Circular A-87,
``Cost Principles for State, Local and Indian Tribal Governments.''
The allowability of costs incurred by non-profit organizations is
determined in accordance with the provisions of OMB Circular A-122,
``Cost Principles for Non-Profit Organizations.'' The allowability
of costs incurred by institutions of higher education is determined
in accordance with the provisions of OMB Circular A-21, ``Cost
Principles for Educational Institutions.'' The allowability of costs
incurred by hospitals is determined in accordance with the
provisions of Appendix E of 45 CFR part 74, ``Principles for
Determining Costs Applicable to Research and Development under
Grants and Contracts with Hospitals.'' The allowability of costs
incurred by commercial organizations and those non-profit
organizations listed in Attachment C to Circular A-122 is determined
in accordance with the provisions of the Federal Acquisition
Regulation (FAR) at 48 CFR part 31. See 7 CFR 3015, 3016, or 3019
(governing the Department of Agriculture's implementation of OMB
requirements).
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2. Eligible and Ineligible Costs
a. Last Mile and Middle Mile Projects
i. Eligible Infrastructure Award Expenses
Award funds may be used to pay for the following expenses:
AA. To fund the construction or improvement of all facilities
required to provide broadband service, including facilities required
for providing other services over the same facilities, and including
equipment required to comply with CALEA;
BB. To fund the cost of leasing facilities required to provide
broadband service if such lease qualifies as a capital lease under
GAAP. Award funds may be used to fund the cost of a capital lease for
no longer than the first three years after the date of the Award
Documents; and
CC. To fund reasonable pre-application expenses in an amount not to
exceed five percent of the award. Pre-application expenses may be
reimbursed if they are incurred after the publication date of this
NOFA.
ii. Ineligible Infrastructure Award Expenses
Award funds may not be used for any of the following purposes:
AA. To fund operating expenses of the Applicant;
BB. To fund costs incurred prior to the date on which the
application is submitted, with the exception of eligible pre-
application expenses;
CC. To fund an acquisition, including the acquisition of the stock
of an affiliate, or the purchase or acquisition of any facilities or
equipment of an affiliate. Due to the competitive nature of the
application process, if affiliated transactions are contemplated in the
application, approval of the application does not constitute approval
to enter into affiliated transactions;
DD. To fund the purchase or lease of any vehicle other than those
used primarily in construction or system improvements;
EE. To fund broadband facilities leased under the terms of an
operating lease;
FF. To fund merger or consolidation of entities;
GG. To fund costs incurred in acquiring spectrum as part of an FCC
auction or in a secondary market acquisition; and
HH. To fund the costs of a satellite launch, construction,
purchase, or leasing of transponder space.
b. Eligible Satellite Award Expenses
An eligible Satellite project award may be used by the Applicant:
i. To fund customer-premises equipment up to $750 per subscriber
(inclusive of the CPE, installation, and activation fees);
ii. To reduce the monthly service cost; and/or
iii. To fund the construction of terrestrial ground facilities,
including equipment required to comply with CALEA.
c. Eligible Rural Library Broadband Grants Expenses
Award funds may be used by the Applicant to pay for the costs of
the last mile connection to the rural library.
d. Eligible Technical Assistance Grants Expenses
Award funds may be used by the Applicant to fund the provision of
technical assistance for the development of a regional broadband plan.
Such technical assistance must include both planning and economic
expertise.
[[Page 3829]]
V. Application and Submission Information
A. Request for Application Package
Complete application packages, including required Federal forms and
instructions, will be available at http://www.broadbandusa.gov.
Additional information can be found in the Application Guidelines at
http://www.broadbandusa.gov. This Web site will be updated regularly.
Applicants that are eligible for both BIP and BTOP have the option
to apply to either agency for funding for the same project. However,
applicants should apply to only one agency for a given project. RUS
strongly recommends that applications for Middle Mile projects that are
current RUS loan or grant recipients and applications with Last Mile
projects that propose funding service areas that are 75 percent or more
rural should apply to BIP for funding. RUS strongly recommends that
applicants with Middle Mile projects that are not current RUS loan or
grant recipients or applicants with Last Mile projects that propose
service areas that are less than 75 percent rural should apply to BTOP
for funding. This recommendation is necessary to improve the efficiency
of both BIP and BTOP and to leverage the core expertise of the
agencies. The RUS and NTIA will coordinate to identify potential
service area overlaps, and will resolve such conflicts in the manner
that best satisfies the statutory objectives of both programs.
B. Registration
1. DUNS Number
All Applicants must supply a Dun and Bradstreet Data Universal
Numbering System (DUNS) number. Applicants can receive a DUNS number at
no cost by calling the dedicated toll-free DUNS number request line at
1-866-705-5711 or via the Internet at http://www.dunandbradstreet.com.
2. Central Contractor Registration (CCR)
All Applicants must provide a CCR (CAGE) number evidencing current
registration in the CCR database. If the Applicant does not have a
current CCR (CAGE) number, the Applicant must register in the CCR
system available at http://www.ccr.gov/StartRegistration.aspx.
Applicants are encouraged to register early due to potential delays in
registration.
C. Contents of the Application
1. Requirements for Single Applications from Same Entity for Last Mile
and Middle Mile Projects
A complete application will include the following:
a. The identity of the Applicant and general Applicant and project
information including:
i. A description of the project that will be made public consistent
with the requirements of the Recovery Act; and
ii. The estimated dollar amount of the funding request;
b. An executive summary of the project as detailed in the
application;
c. A description of the proposed funded service area including the
number of premises passed including the number of critical community
facilities, and public safety entities to be passed and/or involved in
the project;
d. Subscriber projections including the number of subscribers for
broadband, video and voice services and any other service that may be
offered;
e. The number of jobs the project is expected to create or save;
f. A map, as furnished on http://www.broadbandUSA.gov of the
proposed funded service areas indentifying the unserved areas and the
areas without High Speed Access;
g. The names of the communities, census designated places or other
areas, including tribal lands, within the proposed funded service area;
information as to whether the communities and areas identified above
are rural or non-rural; the methodology for making the above
classifications; and for Middle Mile projects, identification of the
locations of the interconnection points.
h. A description of the proposed service offerings, and the
associated pricing plan, that the applicant proposes to offer, as well
as the advertised prices of service offerings by competitors in the
same area and; an explanation of why the proposed service offerings are
affordable;
i. A description of the applicant's nondiscrimination,
interconnection, and network management plans;
j. A system design which includes a description of the proposed
technology used to deliver the broadband service demonstrating that all
premises in the proposed funded service area will be offered broadband
service, a network diagram, a timeline including key milestones for
implementation of the project, and a construction schedule all of which
must be certified by a professional engineer who is certified in at
least one of the states where there is project construction, if the
funding request exceeds $1,000,000, unless the Administrator determines
that such certification is not possible; an estimate of the cost of the
project per household; a depreciation schedule for the facilities
proposed for funding, a description of the necessary work force needed
to build and operate the system, whether the applicant is seeking a
waiver of the Buy American provision; and whether the project allows
more than one provider to serve end users; a list of all required
licenses and regulatory approvals needed for the proposed project; and
how much the applicant will rely on contractors or vendors to deploy
the network facilities;
k. Resumes of key management personnel, a description of the
organization's readiness to manage a broadband services network, and an
organizational chart showing any parent organizations and/or
subsidiaries and affiliates;
l. A legal opinion (as set forth in the application) that: (1)
Addresses the applicant's ability to enter into the award documents;
(2) describes all pending litigation matters; and (3) addresses the
applicant's ability to pledge security as required by the award
documents;
m. Evidence of other Recovery Act awards, or collaboration with
other Recovery Act awardees;
n. Summary and itemized budgets of the infrastructure costs of the
proposed project, including if applicable, the ratio of loans to
grants, and any other source of outside funding, especially any other
Recovery Act funds under other Federal programs, and an explanation of
the cost per premises passed;
o. A detailed description of working capital requirements and the
source of these funds;
p. Historical financial statements, Certified Public Accountant
(CPA) audits if applicable, for the previous two calendar years;
q. Pro Forma financial analysis, prepared in conformity with U.S.
GAAP and the Agency's guidance on grants accounting, found at http://www.usda.gov/RUS/pasd/auditreg.htm, related to the sustainability of
the project, including subscriber estimates and other proposed service
offerings in addition to broadband Internet access; annual financial
projections including balance sheets, income statements, and cash flow
statements and supporting assumptions for a five-year forecast period
as applicable; and a list of committed sources of capital funding;
r. Attachments required in the application;
[[Page 3830]]
s. A self-scoring sheet, analyzing the objective scoring criteria
set forth in this NOFA;
t. The pricing package being offered to critical community
facilities, or socially and economically disadvantaged small business
concern (SDB) as defined under section 8(a) of the Small Business
Administration, if any;
u. A list of all the Applicant's outstanding and contingent
obligations, including copies of existing notes, loan and security
agreements, and guarantees;
v. If an SDB, evidence that the applicant is an SDB;
w. A completed Environmental Questionnaire, other documentation
requests, and required environmental authorizations and permits,
including those required by the National Environmental Policy Act of
1969, as amended (42 U.S.C. 4321 et seq.) (NEPA), the National Historic
Preservation Act of 1966, as amended (16 U.S.C. 470 et seq.) (NHPA),
and the Endangered Species Act of 1973, as amended (16 U.S.C. 1534 et
seq.) (ESA) as applicable;
x. A description of measurable service metrics and target service
level objectives (SLOs) (e.g., the speed with which new service will be
established, service availability, and response time for reports of
system failure at a residence) that will be provided to the customer,
and a description of the approach and methodology for monitoring
ongoing service delivery and service quality for the services being
employed;
y. Any waiver requests for projects proposing more than the $10,000
per premises funding limitation, or for applications requesting more
than 75% grant; and
z. Certification from the applicant that agreements with or
obligations to investors do not breach the obligations to the
government under the draft Award Documents.
2. Requirements for Multiple Applications From Same Entity for Last
Mile and Middle Mile Projects
a. All of the requirements specified in paragraph (1) of this
section, unless specifically provided for in paragraph (b).
b. For existing companies, consolidated pro forma financial
statements that include a baseline financial statement for existing
operations, which start with the prior two years of the company's
financial position, for a five year projected period, with an
additional set of financial statements that layer each of the
operations for the addition applications into the baseline statements.
In addition, a reconciliation schedule supporting the consolidation of
the individual pro forma financial statements for revenue, capital
spending, operating expenses, BIP funding and external funding for the
company. For Start-up operations, consolidated pro forma financial
statements that include the financial statements of the operation
included in the application as the baseline financial statements, with
an additional set of financial statements that layer each of the
operations for the additional applications into the baseline
statements. In addition, a reconciliation schedule supporting the
consolidation of the individual pro forma financial statements for
revenue, capital spending, operating expenses, BIP funding and external
funding for the company.
c. A commitment from all investors indicating their willingness to
commit funds even if all applications are not funded.
3. Requirements for Applications for Satellite Projects
A complete application will include the following:
a. The identity of the Applicant and general Applicant and project
information including:
i. A description of the project that will be made public consistent
with the requirements of the Recovery Act;
ii. The Congressional Districts affected by the project;
b. An executive summary of the project;
c. A description of the Applicant's ability to cover an entire
region;
d. A description of the proposed service offerings and associated
pricing plans, which must include a reduction of at least 25 percent of
the Applicant's service rates in effect as of December 1, 2009 for at
least one year, the provision of no cost CPEs (including no
installation, activation, or other hidden fees), and how its rates will
be affordable to low-income households. A copy of the service rate
plans in effect on December 1, 2009, must also be included;
e. Resumes of key management personnel, a description of the
organization's readiness to manage a broadband services network, and an
organizational chart showing any parent organizations and/or
subsidiaries and affiliates;
f. A legal opinion (as set forth in the application) that: (1)
Addresses the Applicant's ability to enter into the award documents;
(2) describes all pending litigation matters; and (3) addresses the
Applicant's ability to pledge security as required by the award
documents;
g. An itemized budget of the costs of the proposed project;
h. Pro Forma financial analysis related to the sustainability of
the project, including subscriber estimates and proposed service
offerings in addition to broadband Internet access; annual financial
projections including balance sheets, income statements, and cash flow
statements and supporting assumptions for a five-year forecast period
as applicable; and a list of committed sources of capital funding;
i. Historical financial statements, Certified Public Accountant
(CPA) audits if applicable, for the previous two calendar years;
j. Certifications required in the application;
k. The pricing package being offered to critical community
facilities, if any;
l. A list of all its outstanding and contingent obligations,
including copies of existing notes, loan and security agreements, and
guarantees;
m. A detailed description of working capital requirements and the
source of these funds;
n. A completed Environmental Questionnaire, other documentation
requests, and required environmental authorizations and permits,
including those required by the National Environmental Policy Act of
1969, as amended (42 U.S.C. 4321 et seq.) (NEPA), the National Historic
Preservation Act of 1966, as amended (16 U.S.C. 470 et seq.) (NHPA),
and the Endangered Species Act of 1973, as amended (16 U.S.C. 1534 et
seq.) (ESA) as applicable; and
o. A description of measurable service metrics and target service
level objectives (SLOs) (e.g., the speed with which new service will be
established, service availability, and response time for reports of
system failure at a residence) that will be provided to the customer,
and a description of the approach and methodology for monitoring
ongoing service delivery and service quality for the services being
employed.
D. Material Representations
The application, including certifications, and all forms submitted
as part of the application will be treated as a material representation
of fact upon which RUS will rely in awarding grants.
[[Page 3831]]
VI. Application Evaluation Criteria
A. Evaluation Criteria for Last Mile and Middle Mile Projects
Each application will be scored against the following objective
criteria, and not against other applications.
1. Proportion of Rural Residents Served in Unserved Areas (10 Points)
Points will be awarded for serving rural residents located in
unserved areas. For every 10 percent of unserved households compared to
the total households to be served that will receive broadband service,
1 point will be awarded up to a maximum of 10 points. For Middle Mile
projects, this will be based on the location of the interconnection
points.
2. Rural Area Targeting (10 Points)
Points will be awarded for exceeding the 75 percent rural area
service requirement. For every 5 percent increase in the total proposed
funded service area that is above 75 percent rural, 2 points will be
awarded up to a maximum of 10 points. For Middle Mile projects, this
will be based on the location of the interconnection points.
3. Distance From Non-Rural Areas (5 Points)
Up to 5 points will be awarded for proposed funded service areas
that are at least 10 miles from the closest non-rural area. For each
additional 10 miles that at least one proposed funded service area is
located away from the closest non-rural area, 1 additional point will
be awarded up to a total of 5 points. For Applicants with multiple
service areas, this calculation will be based on the service area
closest to the non-rural area. For Middle Mile projects, this will be
based on the location of the interconnection points.
4. Title II Borrowers (8 Points)
Eight points will be awarded to applications which are submitted by
entities which have borrowed under Title II of the RE Act.
5. Other Recovery Act Awards (5 Points)
Points will be awarded for cooperation with other Recovery Act
programs, where collaboration would lead to greater project
efficiencies. In each case, the Applicant must convincingly demonstrate
that these leveraging efforts are substantive and meaningful. Five
points will be awarded for any cooperation with a Recovery Act award.
6. Performance of the Offered Service (10 Points)
a. Last Mile Projects
For wireline projects that are constructed to deliver a minimum of
5 Mbps service to the premises (upstream and downstream combined), 5
points will be awarded. For fixed wireline projects that are
constructed to deliver a minimum of 20 Mbps service to the premises
(upstream and downstream combined), 10 points will be awarded. For
wireless projects that are constructed to deliver a minimum of 3 Mbps
service to the end user (upstream and downstream combined), 8 points
will be awarded. For mobile wireless projects that are constructed to
deliver a minimum of 3 Mbps service to the end user (upstream and
downstream combined), 10 points will be awarded. For combination
systems, scoring will be based on the predominant technology used.
b. Middle Mile Projects
For Middle Mile projects that are constructed to deliver 100 Mbps
service to all interconnection points in their network, 10 points will
be awarded.
7. Service to Critical Community Facilities and SDBs (6 Points)
For applications that are proposing to offer discounted rate
packages to all critical community facilities in the proposed funded
service area(s) that are at least 25 percent lower than the proposed
base rate packages for at least 3 years, 4 points will be awarded. For
applications that are proposing to offer discounted rate packages at
least 25 percent lower than the proposed base rate packages to SDBs in
the proposed funded service area for at least three years, 2 points
will be awarded.
8. Applicant's Organizational Capability (10 Points)
Up to 10 points will be awarded based on the strength of the
project's management team. RUS will evaluate past performance and
accomplishments and award points accordingly. Details of these
requirements will be in the Application Guide.
9. Socially and Economically Disadvantaged Small Business Concern (3
Points)
Three points will be awarded to Applicant SDBs.
10. Leverage of Outside Resources (10 Points)
Up to 10 points will be awarded based on the amount of outside
resources contributed to the total financing provided under BIP:
a. 10 points if this ratio is 100 percent.\22\
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\22\ This ratio is calculated by the amount of new equity that
the applicant proposes to support the project compared to the
requested amount of the award. For example, if the applicant
proposes $1 million in outside equity and requests $1 million in
assistance, the ratio is $1 million/$1 million, or 100 percent. If
the applicant proposes $500,000 in outside equity and requests $1
million in assistance, the ratio is $500,000/$1 million, or 50
percent. This scoring criterion is intended to encourage a public/
private partnership.
---------------------------------------------------------------------------
b. 7 points if this ratio is between 75 percent and 99 percent.
c. 5 points if this ratio is between 50 percent and 74 percent.
d. 3 points if this ratio is between 25 percent and 49 percent.
e. 0 points if the ratio is less than 25 percent.
Outside resources are limited to new investments that are proposed
to support the project and do not include any existing assets that the
Applicant already owns or has rights to or any revenues generating from
the operations.
11. Extent of Grant Funding (15 Points)
Up to 15 points will be awarded based on the amount of grants funds
requested in relation to the total amount of the award requested:
a. 0 points if requesting a grant greater than 70 percent.
b. 5 point if requesting a grant between 51 and 70 percent.
c. 10 points if requesting a grant between 16 and 50 percent.
d. 15 points if requesting a grant between 0 and 15 percent.
12. Cost Effectiveness (8 Points)
For Last Mile projects, up to 8 points will be awarded for projects
that promote cost effectiveness of Federal assistance, based on cost
per premises passed. To calculate the cost per premises passed, the
Applicant shall divide the total award requested in the application by
the total number of premises passed.
a. 2 points if cost per premises passed is less than $8,000.
b. 4 points if cost per premises passed is less than $7,000.
c. 6 points if cost per premises passed is less than $6,000.
d. 8 points if cost per premises passed is less than $5,000.
B. Administrator's Bonus Points (10 points)
The Administrator, at his discretion, can award up to a maximum of
10 bonus points to applications that provide significant assistance to
critical community facilities (including libraries), promote rural
economic
[[Page 3832]]
development, support persistent poverty counties, serve chronically
underserved areas, demonstrate cost effectiveness, offer low-cost
service options, and/or provide for geographic diversity. However, the
Administrator's points may not raise an Applicant's score to more than
100 points.
VII. Waiver for Grants Capped at 75% of Award for Last Mile and Middle
Mile Projects
A. Waiver Request
All Applicants may request a grant that does not exceed 75 percent
of eligible projects. An Applicant may apply for a loan for any
eligible project costs not covered by a grant under this NOFA.
Applicants requesting more than a 75 percent grant component must
request a waiver from the Administrator, demonstrating their need for
additional grant funding, as well as the factors set forth in paragraph
B of this section. If the waiver request is denied, the application may
be adjusted by the Agency if an award is offered or may be placed in
the second review process and the Applicant will have an opportunity to
revise its funding request. The Administrator may award grants up to
100 percent.
B. Administrator's Waiver for Grants above 75% Waiver Considerations
The Administrator may grant a request for waiver for a larger grant
component based on the following factors:
1. Distance From Non-Rural Areas
The Administrator will consider the distance from the focus of the
proposed funded service areas from the closest non-rural area.
2. Rural Area Targeting
The Administrator will consider the percentage of the proposed
funded service area that is above the 75 percent requirement.
3. Density
The Administrator will consider the density of the proposed funded
service area, calculated from the population and area totals of all
proposed funded service areas taken from the mapping tool.
4. Median Household Income
The Administrator will consider the median household income of the
proposed funded service area, comparing the county median household
income to that of the State median income level. For applications
serving multiple counties, the Administrator will weigh the percentages
of all counties.
5. Unemployment
The Administrator will consider the state unemployment level
compared to the National Unemployment Level in the state of the
proposed funded service area. For applications serving multiple states,
the Administrator will weigh the percentages in each State.
C. Notice of Proposed Funded Service Areas for Last Mile and Middle
Mile Projects
RUS will post a Public Notice of the proposed funded service areas
of each Last Mile application, and the communities in which the
interconnection points terminate for Middle Mile applications, as
outlined in Section IV.C.5.a(i), at http://www.broadbandusa.gov for a
30 day period. The Public Notice will provide existing service
providers an opportunity to submit to the agencies information
regarding their service offerings. The information submitted by an
existing service provider will be treated as proprietary and
confidential to the extent permitted under applicable law.
D. Evaluation and Processing Procedures
1. Last Mile and Middle Mile Projects--First Review
Applications for Last Mile and Middle Mile projects will be
evaluated using the criteria stated in Section VII.A of this NOFA.
Public comments received with respect to an application's proposed
funded service area will be reviewed and evaluated. Eligibility of
proposed funded service areas may be verified by Agency field staff.
RUS reserves the right to ask Applicants for clarifying information and
additional verification of assertions in the application. For those
applications that RUS has determined eligible for funding, RUS will
send award documents. Applications meeting the guidelines set forth in
paragraph D.2 below may be requested to provide additional information
to the Agency for a second review.
2. Last Mile and Middle Mile Projects--Second Review
Subject to available funding, Applicants with applications that
have not been approved under the first review, may be requested to
provide additional information if the application: (a) Can be revised,
reviewed, and awarded funds before the expiration of Recovery Act
funding, (b) contains specific and limited adjustments; and (c)
promotes significant economic rural development, as determined by the
Administrator.
Such Applicants will have no more than 15 days within which to
provide the additional information. Applicants will not be permitted to
redo the application, but only provide the supplemental information the
Agency has requested. The application with the additional information
will be reviewed under the same standard as the first review. Any
application that is processed under this procedure will be funded only
after all properly submitted applications have been funded and will be
subject to all applicable requirements under this NOFA. For those
applications which the Agency has decided to fund, award documents will
be sent.
3. Transfer of Applications
For applications that NTIA determines it will not fund, but that
may be consistent with RUS' BIP requirements and priorities, NTIA will
transfer to BIP for consideration of funding. Notwithstanding, NTIA
makes no representation that the application is eligible under the
requirements of BIP. Any decision on the funding of such transfers
shall ultimately be in the sole discretion of RUS. RUS will handle such
applications, if timely received from NTIA, under its Second Review
process outlined above.
4. Satellite Projects
The United States will be divided into eight service area regions
eligible for Satellite applications. Applicants must propose serving
only unserved rural premises in any of the eight regions listed in
Section IX.T in this NOFA; provided, however, unserved rural premises
in proposed funded service areas of Awardees under the First Round NOFA
and this NOFA shall not be eligible for services from satellite
projects. Applicants may submit an application for more than one
region; however, each region in the application must be broken out, so
that the Agency can analyze the proposal for each region individually.
Applicants are encouraged to serve all unserved rural premises
throughout the region on a first-come, first-served basis until the
award funds are expended.
Applications will be evaluated using the criteria set forth herein
and in the Request for Proposals. Procedures for selection of Awardees
to provide satellite service will be set forth in the Request for
Proposals to be published at a later date. The deadline for satellite
application submissions will be provided in that Request.
[[Page 3833]]
5. Technical Assistance Grants
Applications for Technical Assistance grants will be evaluated on
the extent to which the Awardee of the First Round NOFA or Applicants
under this NOFA has considered developing a USDA-approved regional
planning organization(s), the strength and scope of the regional
broadband development strategy, and the proposed broadband service to
be brought to rural areas that remain critically unserved. The proposal
should provide various strategies and the anticipated costs of each.
Applicants may request up to $200,000. RUS, in its discretion, may
decrease the requested award amount based on its evaluation of the
application and the level of funding available for this program.
6. Regional Library Broadband Grants
Applications for Regional Library Broadband grants will be accepted
from Awardees of the First Round NOFA or Applicants under this NOFA to
cover the costs associated with connecting any rural library in their
proposed funded service area, that is either being constructed, or to
be constructed, with funding from USDA's Community Facilities Program
of the Rural Housing Service. Such costs need not have been addressed
in the original application submitted under the First Round NOFA or
Second Round NOFA. Applications need only address the rural libraries
involved, the cost of providing a broadband connection and the date by
which such service will be provided. RUS, in its discretion, may
increase or decrease the requested award amount based on its evaluation
of the reasonableness of the costs and the level of funding available
for this program.
VIII. Award Administration Information
A. Award Notices
Successful Applicants will receive award documents from RUS
following award notification. Applicants may view sample award
documents at http://www.broadbandusa.gov.
B. Administrative Requirements
1. Pre-award conditions
No funds will be disbursed under this program until all other
sources of funding have been obtained and any other pre-award
conditions have been met. Failure to obtain one or more sources of
funding committed to in the Application or to fulfill any other pre-
award condition within 30 days of award announcement will result in
withdrawal of the award.
2. Failure To Comply With Award Requirements
If an Awardee fails to comply with the terms of the award as
specified in the award documents, RUS may exercise rights and remedies.
3. Advance Procedures
RUS loan and grant advances are made at the request of the Awardee
according to the procedures stipulated in the award documents. Loan/
grant combination funds are advanced in proportion to the amount of the
award made in the form of loans and grants.
4. Contracting
Contracting is to be done at the Awardee's discretion, using
private contracts or RUS' form contracts. However, equal employment
opportunity, civil rights, and the requirements of this NOFA must still
be met.
5. Accounting, Monitoring, and Reporting Requirements
Awardees must follow RUS' accounting, monitoring, and reporting
requirements. These requirements, which are specified in the award
documents, include, but are not limited to, the following:
a. Awardees must adopt a GAAP system of accounts acceptable to RUS,
and which complies with RUS Accounting Requirements, as defined herein;
b. Awardees must submit annual audited financial statements along
with a report on compliance and on internal control over financial
reporting, and a management letter in accordance with the requirements
of 7 CFR part 1773. The CPA conducting the annual audit is selected by
the Awardee and must be approved by RUS as set forth in 7 CFR 1773.4;
c. Awardees must submit to RUS the information as specified in
Section VIII.D.2 of this NOFA;
d. Awardees must comply with all reasonable RUS requests to support
ongoing monitoring efforts. The Awardee shall afford RUS, through its
representatives and representatives of the USDA Office of Inspector
General reasonable opportunity, at all times during business hours and
upon prior notice, to have access to and the right to inspect the
broadband system, and any other property encumbered by the mortgage or
security agreement, and any or all books, records, accounts, invoices,
contracts, leases, payrolls, timesheets, cancelled checks, statements,
and other documents, electronic or paper of every kind belonging to or
in the possession of the Awardee or in any way pertaining to its
property or business, including its subsidiaries, if any, and to make
copies or extracts therefrom.
6. Assistance Instruments
a. Terms and conditions of grants or loan/grant combinations are
set forth in the non-negotiable standard grant or loan/grant contract,
note, and/or mortgage found at http://www.broadbandusa.gov.
b. Terms and conditions of loans are set forth in the non-
negotiable standard loan contract, note, and/or mortgage found at
http://www.broadbandusa.gov.
c. Loan and grant documents appropriate to the project must be
executed prior to any advance of funds.
d. Sample loan documents and grant agreements can be found at
http://www.broadbandusa.gov.
7. Loan and Loan/Grant Terms and Conditions
The following terms shall apply to the loans, as well as other
terms that are specified in the loan documents:
a. Interest Rate
Loans shall bear interest at a rate equal to the cost of borrowing
to the Department of Treasury for obligations of comparable maturity.
The applicable interest rate will be set at the time of each advance.
b. Repayment Period
Unless the Applicant requests a shorter repayment period, broadband
loans must be repaid with interest within a period that, rounded to the
nearest whole year, is equal to the expected Composite Economic Life of
the assets to be financed, as determined by RUS based upon acceptable
depreciation rates.
c. Amortization Period
Interest begins accruing on the date of each loan advance and
interest payments are due monthly. After one year from the first
advance, monthly principal payments will be established in an amount
that amortizes the outstanding balance over the remaining term of the
loan.
d. Fidelity Bonding
Applicants must agree to obtain a fidelity bond for 15 percent of
the award amount. The fidelity bond must be obtained as a condition of
award closing. RUS may reduce the percentage required if it determines
that 15 percent is not commensurate with the risk involved.
[[Page 3834]]
e. Security
The portion of the award must be adequately secured, as determined
by RUS.
i. The loan and loan/grant combination must be secured by the
assets purchased with the loan or loan/grant funds, as well as all
other assets of the Applicant and any other co-signer of the loan
documents that are available to be pledged to RUS.
ii. RUS must be given an exclusive first lien, in form and
substance satisfactory to RUS, on all of the assets purchased with the
loan or loan/grant funds. RUS may share its first lien position with
one or more lenders on a pari passu basis if security arrangements are
acceptable to RUS.
iii. Unless otherwise approved by RUS, all property purchased with
award funds must be owned by the Awardee.
iv. In the case of awards that include financing of facilities that
do not constitute self-contained operating systems, the Applicant shall
furnish assurances, satisfactory to RUS, that continuous and efficient
service at the broadband funding speed will be rendered.
C. Award Terms and Conditions
1. Scope
Awardees, including all contractors and subcontractors, are
required to comply with the obligations set forth in the Recovery Act
and the requirements established herein. Any obligation that applies to
the Awardee shall extend for the life of the awarded-funded facilities.
2. Sale or Lease of Project Assets
The sale or lease of any portion of the award-funded broadband
facilities shall be governed by the applicable Award Document and the
Department's grant regulations at 7 CFR 3015, 3016, and 3019. Unless
otherwise permitted in the Award Document, project assets cannot be
sold while the loan is outstanding. Terms under which grant assets can
be sold are outlined in the Department's grant regulations cited above.
3. Certifications
a. The Applicant must certify that he or she is authorized to
submit the application on behalf of the eligible entity(ies) listed on
the application; that the Applicant has examined the application, that
all of the information in the application, including certifications and
forms submitted, all of which are part of the application, are material
representations of fact and true and correct to the best of his or her
knowledge; that the entity(ies) that is requesting funding pursuant to
the application and any subawardees will comply with the terms,
conditions, purposes, and Federal requirements of the program; that no
kickbacks were paid to anyone; and that a false, fictitious, or
fradulent statement or claim on this application is grounds for denial
or termination of an award, and/or possible punishment by a fine or
imprisonment as provided in 18 U.S.C. 1001 and civil violations of the
False Claims Act (31 U.S.C. 3729 et seq.);
b. The Applicant certifies that the entity(ies) he or she
represents have and will comply with all applicable Federal, state, and
local laws, rules, regulations, ordinances, codes, orders, and
programmatic rules and requirements relating to the project.\23\ The
Applicant acknowledges that failure to do so may result in rejection or
deobligation of the award. The Applicant acknowledges that failure to
comply with all Federal and program rules could result in civil or
criminal prosecution by the appropriate law enforcement authorities;
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\23\ See Recovery Act sec. 6001(e)(4), 123 Stat. at 514.
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D. Reporting Requirements
1. General Recovery Act Requirements
a. OMB Reporting Requirements Implementing the Recovery Act
Any grant, loan, or loan/grant combination awarded under this NOFA
shall be subject to the applicable statutes and regulations regarding
reporting on Recovery Act funds.\24\ If Recovery Act funds are combined
with other funds to fund or complete projects and activities, Recovery
Act funds must be accounted for separately from other funds and
reported to RUS or any Federal web site established for Recovery Act
reporting purposes. Moreover, recipients of funds under this NOFA must
also comply with the accounting requirements as established or referred
to in this NOFA.
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\24\ See, e.g., 2 CFR part 176; OMB, Interim Final Guidance for
Federal Financial Assistance, 74 FR 18449 (Apr. 23, 2009);
Implementing Guidance for Reports on Use of Funds Pursuant to the
American Recovery and Reinvestment Act of 2009 (OMB M-09-21 June 22,
2009); and Updated Guidance on the American Recovery and
Reinvestment Act of 2009 (OMB M-10-08 Dec. 18, 2009).
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b. Required Data Elements
The Awardee and each contractor engaged by the Awardee must submit
the following information to the relevant Agency:
i. The total amount of Recovery Act funds received;
ii. The amount of Recovery Act funds received that were expended or
obligated to projects or activities;
iii. A detailed list of all projects or activities for which
Recovery Act funds were expended or obligated, including (1) the name
of the project or activity; (2) a description of the project or
activity; (3) an evaluation of the completion status of the project or
activity; (4) an estimate of the number of jobs created and the number
of jobs retained by the project or activity; and (5) for infrastructure
investments made by state and local governments, the purpose, total
cost, and rationale of the Agency for funding the infrastructure
investment with Recovery Act funds, and name of the person to contact
at the Agency if there are concerns with the infrastructure investment;
and
iv. Detailed information on any subcontracts or subgrants awarded
by the Awardee to include the data elements required to comply with the
Federal Funding Accountability and Transparency Act of 2006 (Pub. L.
109-282, 120 Stat. 1186 (to be codified at 31 U.S.C. 6101 note),
allowing aggregate reporting on awards below $25,000 or to
individuals.\25\
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\25\ Recovery Act sec. 1512(c), 123 Stat. at 287.
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Awardees that must report information according to paragraph b(iv)
of this section (re: subcontracts or subgrants) must register with the
CCR database (http://www.ccr.gov/) or complete other registration
requirements as determined by the Director of OMB.
c. Reporting Deadlines
Recovery Act reports are due to the agencies 10 days after the
quarter in which the award was issued ends and, unless otherwise noted,
each quarter thereafter in which the Awardee receives financial
assistance. The final report should summarize the Awardee's quarterly
filings and state whether the project's goals have been satisfied.
Pursuant to OMB Guidelines, reports should be submitted electronically
to http://www.federalreporting.gov. If the Awardee fails to submit an
acceptable quarterly report or audited financial statement within the
timeframe designated in the grant or loan award, the agencies may
suspend further payments until the Awardee complies with the reporting
requirements. Additional information regarding reporting requirements
will be specified at the time the award is issued.
2. BIP-Specific Reporting Requirements
In addition to the general Recovery Act reporting requirements, BIP
Awardees shall also report on the information requested below:
[[Page 3835]]
a. Awardees must submit to RUS 30 calendar days after the end of
each calendar year quarter, balance sheets, income statements,
statements of cash flow, rate package summaries, and the number of
customers taking broadband service on a per community basis utilizing
RUS' Broadband Collection and Analysis System (BCAS). BCAS is an
electronic reporting system that is accessed through the Internet.
b. Annually on January 31, starting the first January 31 after
completion of the project, Awardees must submit to RUS, using the
electronic reporting system provided by RUS:
i. Number of households and businesses subscribing to broadband
service;
ii. Number of households and businesses subscribing to broadband
service that receive improved access; and
iii. Number of educational, library, healthcare, and public safety
providers receiving either new or improved access to broadband service.
c. Awardees shall specifically state in the applicable quarter when
they have received 67 percent of the award funds. Reaching this
threshold will indicate that the Awardee has substantially completed
its project.
d. The obligation to report under this section shall exist while
the Awardee has an outstanding loan/grant combination, or for a grant
only, for five years from the date of the completion of the project.
IX. Other Information
A. Funding Rounds
This is the final funding round for BIP.
B. Discretionary Awards
The government is not obligated to make any award as a result of
this announcement, and will fund only projects that are deemed likely
to achieve the program's goals and for which funds are available.
C. Limitation on Expenditures
The Recovery Act imposes an additional limitation on the use of
funds expended or obligated from appropriations made pursuant to its
provisions. Specifically, for purposes of this NOFA, none of the funds
appropriated or otherwise made available under the Recovery Act may be
used by any State or local government, or any private entity, for any
casino or other gambling establishment, aquarium, zoo, golf course, or
swimming pool.\26\
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\26\ Id. Sec.1604, 123 Stat. at 303.
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D. Recovery Act Logo
All projects that are funded by the Recovery Act shall display
signage that features the Primary Emblem throughout the construction
phase. The signage should be displayed in a prominent location on site.
Some exclusions may apply. The Primary Emblem should not be displayed
at a size less than six inches in diameter.
E. Environmental and National Historic Preservation Requirements
Awarding agencies are required to analyze the potential
environmental impacts, as required by the NEPA and the NHPA for
Applicant projects or proposals seeking Recovery Act funding. All
Applicants are required to complete the Environmental Questionnaire
under the description of program activities and to submit all other
required environmental documentation with the application.
It is the Applicant's responsibility to obtain all necessary
Federal, State, and local governmental permits and approvals necessary
for the proposed work to be conducted. Applicants are expected to
design their projects so that they minimize the potential for adverse
impacts to the environment. Applicants also will be required to
cooperate with the granting agencies in identifying feasible measures
to reduce or avoid any identified adverse environmental impacts of
their proposed projects. The failure to do so may be grounds for not
making an award.
Applications will be reviewed to ensure that they contain
sufficient information to allow Agency staff to conduct a NEPA analysis
so that appropriate NEPA documentation can be submitted to the
agencies, along with the recommendation for funding of the selected
applications. Applicants proposing activities that cannot be covered by
existing environmental compliance procedures will be informed after the
technical review stage whether NEPA compliance and other environmental
requirements can otherwise be expeditiously met so that a project can
proceed within the timeframes anticipated under the Recovery Act.
If additional information is required after an application is
accepted for funding, funds can be withheld by the agencies under a
special award condition requiring the Awardee to submit additional
environmental compliance information sufficient for the Agency to make
an assessment of any impacts that a project may have on the
environment.
F. Davis-Bacon Wage Requirements
Pursuant to section 1606 of the Recovery Act, any project using
Recovery Act funds requires the payment of not less than the prevailing
wages for ``all laborers and mechanics employed by contractors and
subcontractors on projects funded directly by or assisted in whole or
in part by and through the Federal Government.'' \27\
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\27\ Id. Sec. 1606, 123 Stat. at 303.
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G. Financial and Audit Requirements
To maximize the transparency and accountability of funds authorized
under the Recovery Act, all Applicants are required to comply with the
applicable regulations set forth in OMB's Interim Final Guidance for
Federal Financial Assistance.\28\
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\28\ See OMB, Interim Final Guidance for Federal Financial
Assistance, 74 FR 18449 (Apr. 23, 2009).
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Recipients that expend $500,000 or more of Federal funds during
their fiscal year are required to submit an organization-wide financial
and compliance audit report. The audit must be performed in accordance
with the U.S. General Accountability Office, Government Auditing
Standards, located at http://www.gao.gov/govaud/ybk01.htm, and OMB
Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations, located at http://www.whitehouse.gov/omb/circulars/a133/a133.html. Awardees are responsible for ensuring that sub-recipient
audit reports are received and for resolving any audit findings.
H. Deobligation
The RUS reserves the right to deobligate awards to recipients under
this NOFA that demonstrate an insufficient level of performance, or
wasteful or fraudulent spending, and award these funds competitively to
new or existing Applicants prior to September 30, 2010.
I. Confidentiality of Applicant Information
Applicants are encouraged to identify and label any confidential
and proprietary information contained in their applications. The Agency
will protect confidential and proprietary information from public
disclosure to the fullest extent authorized by applicable law,
including the Freedom of Information Act, as amended (5 U.S.C. 552),
the Trade Secrets Act, as amended (18 U.S.C. 1905), the Economic
Espionage Act of 1996 (18 U.S.C. 1831 et seq.), and CALEA (47 U.S.C.
1001 et seq.). Applicants should be aware, however, that the Recovery
[[Page 3836]]
Act requires substantial transparency. For example, RUS is required to
make publicly available on the Internet a list of each entity that has
applied for a grant, a description of each application, the status of
each application, the name of each entity receiving funds, the purpose
for which the entity is receiving the funds, each quarterly report, and
other information.\29\
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\29\ See Recovery Act sec. 6001(i)(5), 123 Stat. at 515.
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J. Disposition of Unsuccessful Applications
Applications accepted for review for Fiscal Year 2010 BIP will be
retained for two years, after which they will be destroyed.
K. State Certifications
With respect to funds made available under Recovery Act to state or
local governments for infrastructure investments, the governor, mayor,
or other chief executive, as appropriate, must certify that the
infrastructure investment has received the full review and vetting
required by law and that the chief executive accepts responsibility
that the infrastructure investment is an appropriate use of taxpayer
dollars. This certification must include a description of the
investment, the estimated total cost, and the amount of funds to be
used, and must be posted on the recipient's Web site and linked to
http://www.recovery.gov. A state or local Agency may not receive
infrastructure investment funding from funds made available under the
Recovery Act unless this certification is made and posted.\30\
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\30\ See id. Sec. Sec. 1511, 1526, 123 Stat. at 287, 293.
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L. Compliance With Applicable Laws
Any recipient of funds under this NOFA shall be required to comply
with all applicable Federal and state laws, including but not limited
to: i. The nondiscrimination and equal employment opportunity
requirements of Title VI of the Civil Rights Act of 1964, as amended
(42 U.S.C. 2000e et seq., 7 CFR part 15); ii. section 504 of the
Rehabilitation Act (29 U.S.C. 794 et seq.; 7 CFR part 15b); iii. The
Age Discrimination Act of 1975, as amended (42 U.S.C. 6101 et seq.; 45
CFR part 90); iv. Executive Order 11375, amending Executive Order
11246, Relating to Equal Employment Opportunity (3 CFR part 102). See 7
CFR parts 15 and 15b and 45 CFR part 90, RUS Bulletin 1790-1
(``Nondiscrimination among Beneficiaries of RUS Programs''), and RUS
Bulletin 20-15:320-15 (``Equal Employment Opportunity in Construction
Financed with RUS Loans''). The RUS Bulletins are available at http://www.broadbandusa.gov.; v. The Architectural Barriers Act of 1968, as
amended (42 U.S.C. 4151 et seq.); vi. The Uniform Federal Accessibility
Standards (UFAS) (Appendix A to 41 CFR subpart 101-19.6); and vii. The
Council on Environmental Quality Regulations for Implementing the
Procedural Provisions of NEPA and certain related Federal environmental
laws, statutes, regulations, and Executive Orders found in 7 CFR part
1794. A more complete list of such requirements can be found in the
applicable grant agreement or loan contract.
M. Communications Laws
Awardees, and in particular, Broadband Infrastructure Awardees,
will be required to comply with all applicable Federal and State
communications laws and regulation as applicable, including, for
example, the Communications Act of 1934, as amended, (47 U.S.C. 151 et
seq.) the Telecommunications Act of 1996, as amended (Pub. L. 104-104,
110 Stat. 56 (1996), and CALEA. For further information, see http://www.fcc.gov.
N. Buy American Notice
1. General Prohibition and Waiver
None of the funds appropriated or otherwise made available by the
Recovery Act may be used for the construction, alteration, maintenance,
or repair of a public building or public work (as such terms are
defined in 2 CFR 176.140) unless all of the iron, steel, and
manufacturing goods used in the project are produced in the United
States.\31\ On July 1, 2009, the Department of Agriculture published a
notice in the Federal Register at 74 FR 31402 stating that the
Secretary of Agriculture has determined that applying the Buy American
provision for the use of certain broadband equipment in public BIP
projects would be inconsistent with the public interest.
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\31\ Id. Sec 1605, 123 Stat. at 303.
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As explained below, to the extent that an Applicant wishes to use
broadband equipment or goods that are not covered by the Secretary's
waiver, it may seek an additional waiver on a case-by-case basis as
part of its application for Recovery Act funds.
2. OMB Buy American Notice Requirement
Pursuant to OMB guidance on the Recovery Act,\32\ RUS is required
to provide notice as prescribed at 2 CFR 176.170.
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\32\ See 2 CFR part 176.
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Section 176.170: Notice of Required Use of American Iron, Steel,
and Manufactured Goods (covered under International Agreements)--
Section 1605 of the American Recovery and Reinvestment Act of 2009.
When requesting applications or proposals for Recovery Act programs
or activities that may involve construction, alteration, maintenance,
or repair of a public building or public work, and involve iron, steel,
and/or manufactured goods covered under international agreements, the
agency shall use the notice described in the following paragraphs in
the solicitation:
(a) Definitions. Designated country iron, steel, and/or
manufactured goods, foreign iron, steel, and/or manufactured good,
manufactured good, public building and public work, and steel, as used
in this provision, are defined in 2 CFR 176.160(a).
(b) Requests for determinations of inapplicability. A prospective
applicant requesting a determination regarding the inapplicability of
section 1605 of the American Recovery and Reinvestment Act of 2009
(Pub. L. 111-5) (Recovery Act) should submit the request to the award
official in time to allow a determination before submission of
applications or proposals. The prospective Applicant shall include the
information and applicable supporting data required by 2 CFR 176.160
(c) and (d) in the request. If an Applicant has not requested a
determination regarding the inapplicability of section 1605 of the
Recovery Act before submitting its application or proposal, or has not
received a response to a previous request, the Applicant shall include
the information and supporting data in the application or proposal.
(c) Evaluation of project proposals. If the Federal Government
determines that an exception based on unreasonable cost of domestic
iron, steel, and/or manufactured goods applies, the Federal Government
will evaluate a project requesting exception to the requirements of
section 1605 of the Recovery Act by adding to the estimated total cost
of the project 25 percent of the project cost if foreign iron, steel,
or manufactured goods are used based on unreasonable cost of comparable
domestic iron, steel, or manufactured goods.
(d) Alternate project proposals.
(1) When a project proposal includes foreign iron, steel, and/or
manufactured goods, other than designated country iron, steel, and/or
manufactured goods, that are not listed by the Federal Government in
this Buy American
[[Page 3837]]
notice in the request for applications or proposals, the Applicant may
submit an alternate proposal based on use of equivalent domestic or
designated country iron, steel, and/or manufactured goods.
(2) If an alternate proposal is submitted, the Applicant shall
submit a separate cost comparison table prepared in accordance with
paragraphs 2 CFR 176.160(c) and (d) for the proposal that is based on
the use of any foreign iron, steel, and/or manufactured goods for which
the Federal Government has not yet determined an exception applies.
(3) If the Federal Government determines that a particular
exception requested in accordance with 2 CFR 176.160(b) does not apply,
the Federal Government will evaluate only those proposals based on use
of the equivalent domestic or designated country iron, steel, and/or
manufactured goods, and the Applicant shall be required to furnish such
domestic or designated country items.
O. Executive Order 12866
This notice has been determined to be ``economically significant''
under Executive Order 12866. The Recovery Act also appropriates $2.5
billion to RUS for broadband grants and loans. Awards must be made no
later than September 30, 2010. In accordance with Executive Order
12866, an economic analysis was completed outlining the costs and
benefits of implementing each of these programs. The complete analysis
is available from RUS upon request.
P. Executive Order 13132
It has been determined that this notice does not contain policies
with federalism implications as that term is defined in Executive Order
13132.
Q. Administrative Procedure Act Statement
This NOFA is being issued without advance rulemaking or public
comment. The Administrative Procedure Act of 1946, as amended (5 U.S.C.
553) (APA), has several exemptions to rulemaking requirements. Among
them is an exemption for ``good cause'' found at 5 U.S.C. 553(b)(B),
which allows effective government action without rulemaking procedures
where withholding the action would be ``impracticable, unnecessary, or
contrary to the public interest.''
USDA has determined, consistent with the APA that making these
funds available under this NOFA for broadband development, as mandated
by the Recovery Act, is in the public interest. Given the emergency
nature of the Recovery Act and the extremely short time period within
which all funds must be obligated, withholding this NOFA to provide for
public notice and comment would unduly delay the provision of benefits
associated with these broadband initiatives and be contrary to the
public interest.
For the same reasons, the Agency finds good cause under 5 U.S.C.
553(d)(3) to waive the 30-day delay in effectiveness for this action.
Because notice and opportunity for comment are not required pursuant to
5 U.S.C. 553(d)(3) or any other law, the analytical requirements of the
Regulatory Flexibility Act of 1980, as amended (5 U.S.C. 601 et seq.)
are inapplicable. Therefore, a regulatory flexibility analysis is not
required and has not been prepared.
R. Paperwork Reduction Act
Copies of all forms, regulations, and instructions referenced in
this NOFA may be obtained from RUS by e-mailing [email protected].
Data furnished by the Applicants will be used to determine eligibility
for program benefits. Furnishing the data is voluntary; however, the
failure to provide data could result in program benefits being withheld
or denied.
The collection of information is vital to RUS to ensure compliance
with the provisions of this Notice and to fulfill the requirements of
the Recovery Act. The information collection requirements contained in
the NOFA have been approved by the Office of Management and Budget
(OMB) under OMB Control Number 0572-0142.
The agency expects to request emergency clearance from OMB and to
publish a notice seeking public comment on the information collection
requirements of the Satellite, Technical Assistance, and Libraries
programs at a later date.
S. Recovery Act
Additional information about the Recovery Act is available at
http://www.Recovery.gov.
T. Satellite Regions
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Region 1 Region 2 Region 3 Region 4 Region 5 Region 6
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State State State State State State
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Washington Montana Colorado Michigan Tennessee Maryland
Oregon Wyoming New Mexico Indiana Mississippi Delaware
California North Dakota Kansas Ohio Alabama New Jersey
Nevada South Dakota Oklahoma Kentucky Georgia New York
Idaho Nebraska Texas West Virginia Florida Connecticut
Utah Minnesota Missouri Pennsylvania South Carolina Rhode Island
Arizona Iowa Arkansas Virginia North Carolina Massachusetts
Wisconsin Louisiana New Hampshire
Illinois Vermont
Maine
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Region Seven--Alaska
Region Eight--Hawaii
U. Authorized Signatories
Only authorized grant and loan officers can bind the Government to
the expenditure of funds.
Dated: January 15, 2010.
Jonathan Adelstein,
Administrator, Rural Utilities Service.
[FR Doc. 2010-1099 Filed 1-19-10; 11:15 am]
BILLING CODE 3410-15-P