Rural Development

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NARUC Summer Meeting July14, 2007
Rural Development 1400 Independence
Ave. Washington, DC 20250 www.usda.gov/rus/
Presenter Kenneth Kuchno Director, Broadband
Division Telecommunications Program
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Rural Development Utilities Programs
Nationwide Investment

• More than 5.7 billion invested in rural
  telecommunications infrastructure
• Almost 2 million rural homes and businesses have
  received access to high-speed broadband
  connections
• More than 251 million in Distance
  Learning/Telemedicine grants and loans have been
  awarded to rural health and education providers

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Broadband Loan Program Status and Results

• Established by the 2002 Farm Bill.
• As of July 13, 2007, 72 loans have been made for
  approximately 1.25 billion to finance facilities
  in 40 states.
• Projects proposing to serve more than 582,000
  households
• 1,263 communities

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Broadband LoansStatistics

• 203 Applications Received
• Totaling 4,430,000,000
• Applications Processed as of July13, 2007
• 72 Approved 1,250,000,000
• 21 In Review 963,000,000
• 110 Returned
  2,217,000,000

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Broadband Loan Program Status and Results

• Unserved and Underserved Communities
• Approximately 40 of the communities approved for
  funding were unserved at the time of loan
  approval.
• An additional 15 had only one provider at the
  time of loan approval

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Broadband Loan Program Technology Neutral
As of 7/13/2007
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The Cost to Deploy Broadband

• Least Expensive Unlicensed Wireless
• Most Expensive FFTH
• On average, when considering all the technologies
• funded (community populations ranging from 200
• 19,000)
• 2,150 per Household Served
• 990,000 per Community Served
• (based on estimates not actual
  costs)

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Broadband Loan Program Technology Neutral
As of 7/13/2007
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Broadband Loan Program Types of Organizations
Funded

• One Size Does Not Fit All
• Private/public partnerships
• Traditional telephone companies enhancing service
  offerings
• Local service providers serving one or a few
  local communities
• National service providers providing service to
  multiple communities, even multiple states
• Municipalities

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BroadbandDirect Cost-of-Money Rates
Amortization period from 5 20 years based on
useful economic life of facilities funded.
As of July 12, 2007
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Definition of Broadband

• Currently
• 200 kilobits per second
• both upstream and
• downstream

• In the Future
• 1 Megabits???????
• 5 Megabits???????
• 50 Megabits??????
• or even
• 100 Megabits?????

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Raising the Speed for Rural America

• Overall cost of broadband system may increase.
• Backbone requirements go up.
• Cost to consumer probably goes up.
• Certain technologies may no longer have the
  capability to deliver broadband service.
• The outliers may not get this service.

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Broadband Service Offerings

• Wireless 128K/128K 512K/256K 2M/1.5M 4M/2M
• HFC 256K/256K 3M/128K 1.5M/384K 2M/512K
  4.5M/640K
• FTTH 512K/256K 3M/768K 2M/1M 10M/10M
• BPL 256K/256K 1M/1M 3M/3M (only 1 application)

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Rural Broadband Access Loan and Loan Guarantee
Program

• Proposed Rule published.
• Comment period has ended.
• 32 comments received.

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Who submitted Comments?http//www.usda.gov/rus/t
elecom/1738-onlinefilings.htm

• American Cable Ass.
• CTIA
• NRECA
• NRTC
• NCTA
• NTCA
• USTA
• Vermont Dept. of Public Service
• Nextwave Wireless
• Rural Telephone Service Co.
• Suddenlink

• OPASTCO
• QWEST
• Mediacom
• IA Telecom Service
• US Chamber of Commerce
• MidState Consultants
• Nextwave Wireless
• PCIA
• WTA
• North American Equipment Dealers

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Broadband Success

• Air Advantage, LLC
• Community Connect Grants
• 2003 Unionville, Michigan (Pop. 605) 214,532
• 2003 Port Hope, Michigan (Pop. 310) 219,176
• Broadband Loans
• 2004 43 communities, 1,500,000
• 2005 12 communities, 1,028,000
• 2007 Pending application to handle addition
  customers, 1,000,000
• Exciting Fact Today they are serving 55
  mid-Michigan communities and providing service to
  3,500 rural Michigan customers with a wireless
  system

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Rural America

• Lets not forget the most Rural Americans and
  lets strive to get all Americans Affordable,
  Dependable, and Quality Broadband Service.

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Rural Development Utilities Programs


Kenneth Kuchno Director, Broadband
Division Telecommunications Program kenneth.kuchno
_at_usda.gov [phone]