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Rural Development

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Title: Rural Development


1
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
2
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

3
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

4
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

5
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

6
Broadband Loan Program Technology Neutral
As of 7/13/2007
7
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)

8
Broadband Loan Program Technology Neutral
As of 7/13/2007
9
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

10
BroadbandDirect Cost-of-Money Rates
Amortization period from 5 20 years based on
useful economic life of facilities funded.
As of July 12, 2007
11
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?????

12
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.

13
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)

14
Rural Broadband Access Loan and Loan Guarantee
Program
  • Proposed Rule published.
  • Comment period has ended.
  • 32 comments received.

15
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

16
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

17
Rural America
  • Lets not forget the most Rural Americans and
    lets strive to get all Americans Affordable,
    Dependable, and Quality Broadband Service.

18

Rural Development Utilities Programs


Kenneth Kuchno Director, Broadband
Division Telecommunications Program kenneth.kuchno
_at_usda.gov (202) 690-4673
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