The Stimulus Plan:
On February 17, 2009, President Barack Obama signed into law a massive $787 billion economic stimulus bill. The bill is an unprecedented economic stimulus package with a stated purpose of stabilizing the failing economy by providing stimulus funding focused on preserving and creating jobs and promoting economic recovery across the nation. The stimulus bill includes funds for programs to assist those who have been affected by the recession while providing funds to improve the nation’s transportation infrastructure and to ensure state and local governments avoid reductions in essential services, such as education and unemployment benefits. All federal agencies are encouraged to move quickly to award funds for projects that can be completed within relatively short time frames to spur economic growth of the nation.
It is interesting to note the stimulus bill itself was a “quick start” project for Congress, approved by both the House and the Senate and then moved through Conference Committee in record time – less than two weeks! Many Congressional members voiced concerns that they hadn’t had the opportunity to read the entire bill prior to passage. This is not surprising given the bill is well over 1,000 pages!
Setting aside the political disclaimers and outcries of many, the communications industry has been given an opportunity to invest in broadband infrastructure and services, as the stimulus bill allocates $7.2 billion of the $787 billion for broadband deployment. The $7.2 billion broadband section of the stimulus package is in keeping with President Obama’s Technology Plan which, in part, is to ensure a full and free exchange of information through an open Internet and encourage the deployment of a modern communications infrastructure at broadband speeds for the 21st century.
The $7.2 billion loans and grants will be awarded by two federal agencies: $2.5 billion is allocated for loans, loan guarantees, and grants to the U.S. Department of Agriculture, Rural Utilities Service’s (RUS), Distance Learning, Telemedicine, and Broadband Programs. The RUS monies are to be provided to entities providing service to rural underserved and unserved areas. $4.7 billion is allocated to the U.S. Department of Commerce’s National Telecommunications Information Administration (NTIA) bureau for the purpose of awarding broadband grants. NTIA’s funds are directed to several specific projects, such as developing and maintaining a national interactive broadband map and competitive grants for computer centers, broadband education and healthcare, equipment, and broadband software and hardware. However, more than $3.7 billion of the $4.7 billion given to NTIA will be directed to infrastructure grants.
In the past weeks RUS, NTIA, and the FCC announced meetings to begin discussing the administrative processes regarding the application forms, rules for the grants, and defining terms contained in the stimulus bill, such as “broadband,” “underserved” and “unserved”. As can be expected, the agencies are overwhelmed with inquiries on the overall processes of requesting a loan or grant. Although Congress and President Obama would like to see a spike in the nation’s broadband investments as quickly as possible with “shovel ready” projects, it may be several months before any industry participant receives funds or grants.
One interesting aspect of the stimulus package receiving media attention is the unprecedented accountability and transparency requirements contained throughout the stimulus bill. Accountability and transparency requirements are anticipated for both the federal agencies and any fund recipient. The stimulus bill allocates $84 million to a new “Recovery Accountability and Transparency Board” to oversee accountability. RUS and NTIA are also required to report every 90 days to Congress regarding the funds awarded. In addition, both agencies have been allocated funds to their Office(s) of Inspector General to oversee accountability of recipients. Accountability requirements will be a key component for any loans or grants received; the law requires all documents provided to or requested by NTIA be made available via the NTIA website.
Although most governmental agencies are not known for their speedy responses to applications, the accountability and reporting requirements may incent both RUS and NTIA to approve applications in a more timely fashion.
Setting aside the accountability and compliance requirements facing the recipients as loans and grants are awarded, these funds may provide a tremendous opportunity for the rural industry and the communities they serve. We expect any grants made available through RUS or NTIA may require “in-kind” services. These “in-kind” services may provide a way for the local communities to become involved in projects that benefit public safety, healthcare, and education initiatives. We encourage you to include your communities’ needs as you consider the loans and grants.