[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1737.11]

[Page 327-328]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1737--PRE-LOAN POLICIES AND PROCEDURES COMMON TO INSURED AND GUARANTEED TELECOMMUNICATIONS LOANS--Table of Contents
 
                     Subpart B--Preapplication Stage
 
Sec. 1737.11  Preapplication determinations.

    Before submitting an application to RUS, the borrower should 
consider the following:
    (a) Area to be served. The proposed service area should neither 
include subscribers already receiving adequate service from another 
telephone system nor leave out unserved pockets of potential subscribers 
who have indicated an interest in service and are located between the 
proposed system and neighboring systems. See 7 CFR 1735.11 on Area 
Coverage and 7 CFR 1735.12 on Nonduplication. In establishing service

[[Page 328]]

area boundaries, borrowers should consider the location of adjoining 
systems, natural boundaries such as rivers and mountains, and economic 
and cultural features such as trading and community centers.
    (b) Number of subscribers. The borrower must estimate the number of 
subscribers that will request service from the proposed system.
    (c) Acquisitions. A borrower considering an acquisition should refer 
to 7 CFR 1735.20 and RUS Bulletins 320-4, 321-2, 325-1, and 326-1.
    (d) Mergers and consolidations. A borrower considering a merger or 
consolidation should refer to 7 CFR 1735.19.
    (e) Refinancing. Restrictions on the use of loan funds for 
refinancing are contained in 7 CFR 1735.21.
    (f) Service for nonrural subscribers. In some situations, RUS loan 
funds may be used to finance facilities to serve nonrural subscribers. 
See 7 CFR 1735.13.
    (g) Loan amount. The initial loan request is based on the borrower's 
best estimate of financing needs. RUS requires detailed studies by the 
borrower to complete the application and the initial estimate is subject 
to revision.
    (h) Loans for a portion of a system. If it is impractical to finance 
facilities to provide adequate service throughout the borrower's entire 
telephone service area, RUS will consider a loan application to finance 
improvements to a portion of a borrower's system.
    (i) Telecommunications modernization plan. A borrower applying for 
hardship or concurrent RUS cost-of-money and RTB loans should refer to 7 
CFR part 1751, subpart B.

[54 FR 14626, Apr. 12, 1989. Redesignated at 55 FR 39395, Sept. 27, 
1990, as amended at 58 FR 66256, Dec. 20, 1993]