RUS to Discontinue Telecom Program’s List of Materials

–updated May 24, 2011, at 10:50 a.m. with new information –

NTCA spoke with RUS officials May 23, Monday afternoon, and learned that agency will be discontinuing the telecom program’s “approved” list of materials (LoM). RUS said that it does not have the staff resources to continue this project. The official announcement was posted May 24 to the RUS website.

In the past, broadband service providers that received RUS grants or low-interest loans to construct, upgrade or maintain their networks were only allowed to install new products which were on the approved LoM. (The one exception to this rule was applicants to the BIP program.)

RUS Administrator Jonathan Adelstein made the official announcement in an open letter: “Effective immediately, Rural Development will no longer accept applications for equipment to be added to the List of Materials for Telecommunications and Rural Development will cease publication of the List of Materials for Telecommunications.”

Now that the list is dead, for rural telcos this will clearly reduce the amount of paperwork required to complete a loan. Unfortunately the industry also relied on the guidance the list provided.

Adelstein said that the agency has a new plan to ensure that equipment adheres to industry best practices: “To protect our loan security and compliance with continuing Buy America statutory mandates, we will transition from a listing process to an approach which ensures that construction financed by RUS meets applicable industry standards.  This new approach will be incorporated into our review of individual projects and the approval of loan advances.”

For more, including guidance for existing borrowers, see the official announcement and the RUS website.

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