August 5, 2009 - Small Carriers Urge RUS to Alter Broadband Funding Evaluation Measure

Say criterion is inconsistent with Congressional intent, discriminates against small companies serving rural America


Arlington, Va., August 5, 2009 - A proposed evaluation criterion in the Broadband Initiatives Program (BIP) NoFA would unfairly discriminate against small companies serving sparsely populated unserved areas, several groups representing small communications providers said in a letter to RUS Administrator Jonathan Adelstein.

The groups urged Adelstein to change the criterion prior to the start of the evaluation process of applications for grants and loans under the BIP program.

The groups point out that the evaluation criteria for BIP applications as defined in the NoFA focuses on the absolute number of rural residents that would receive broadband service, not the proportion of those residents-which is inconsistent with the statutory language contained in the American Recovery and Reinvestment Act (ARRA) provisions appropriating funds for the BIP program.

In the ARRA, Congress directed that priority for projects that provide service shall be given to the highest proportion of rural residents that do not have access to broadband service. This is in contrast to the language Congress used for the BTOP program, which directed NTIA to consider whether an application will "increase the affordability of, and subscribership to, service to the greatest population of users in the area."

Of particular concern to the groups is the NoFA language which states for every 10,000 unserved households that will receive broadband service, one point will be awarded up to a maximum of five points-a condition which skews the evaluation criteria toward the larger providers.

"The clear impact of this language is that any applicant serving fewer than 10,000 unserved households will not receive any points under this criterion, even if all of the households are unserved," the groups said in the letter. "In contrast, if an applicant has sufficient size and scale (and has done so little broadband investment to date) such that it has 50,000 unserved households in its territory, it will receive five points."

The groups said it would be more consistent with the ARRA statutory language to award points based on the percentage of unserved residents in an area, suggesting that the criterion could award one point for 80% [unserved area] and award an additional point for every additional 5% unserved households-up to 5 points for 100% unserved households in the area.

Contact Caitlin Colligan at 703-351-2086

The group's signatories include representatives from the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO); the National Telecommunications Cooperative Association (NTCA); the Rural Cellular Association (RCA); the Rural Independent Competitive Alliance (RICA); the Rural Telecommunications Group (RTG) and General Communication, Inc. (GCI).

View the letter

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The National Telecommunications Cooperative Association is the premier association representing more than 560 locally owned and controlled telecommunications cooperatives and commercial companies throughout rural and small-town America. NTCA provides its members with legislative, regulatory and industry representation; meetings; publications and educational programs; and an array of employee benefit programs. Visit us at www.ntca.org.