Senate farm bill provides a glimmer of hope for rural broadband

For far too long, Rural Utilities Service (RUS) loans have funded telephone and broadband service with few assurances that the money is being deployed in legitimately unserved areas across the country. This is problematic for rural communities striving to compete for services and jobs against regions that have broadband service. The lack of infrastructure buildout to unserved communities will become even more apparent as the U.S. races to become a leader in 5G and broadband deployment.

The Senate farm bill places new restrictions on the Department of Agriculture’s (USDA) RUS Broadband Loan Program, which would help focus the program on the unserved who need broadband the most, while simplifying the application process for companies seeking loans and grants. The House bill does not have these provisions; the final bill should include them.

{mosads}Ensuring that rural America is digitally connected is vital to accessing telehealth, improved education, job creation, and precision agriculture. RUS funding in the past has been used to build out in areas that already have private sector broadband service, or to upgrade existing services, while other areas or regions remain unserved.

In 2005, in one of its many reports on the RUS loan program, the USDA Office of Inspector General (USDA IG) determined that “RUS has not exclusively serviced those rural communities most requiring Federal assistance to obtain access to broadband technologies.” Prior to 2005, the agency “issued more than $103.4 million in grants and loans (nearly 12 percent of $895 million in total program funds) to communities near metropolitan areas.” The USDA IG questioned whether “the Broadband Loan Program should be providing funds for competition in many of the communities served, while other communities go entirely without service.”

In 2009, the USDA IG reported that RUS had not fully implemented corrective action in response to eight of the 14 recommendations from the 2005 report, and continued to make loans to providers in areas with preexisting service, sometimes in close proximity to large urban areas. Broadband stimulus funding also proved to be problematic. The USDA IG reported in March 2013, that, “RUS funded BIP [Broadband Initiatives Program] projects … sometimes overlapped preexisting RUS-subsidized providers and approved 10 projects, totaling over $91 million, even though the proposed projects would not be completed within the 3-year timeframe RUS established and published.”

The Senate farm bill seeks to correct persistent programmatic weaknesses by ensuring that RUS grants and loans will not be used to overbuild in areas of the country where broadband already exists at or above a minimum standard of 25/3 Mbps. The legislation also restricts loans to areas with two or fewer existing broadband providers, where 90 percent of households are defined as unserved. 

The Senate broadband provisions place the “highest priority” on loan applications that propose to provide broadband service to unserved rural communities that do not have any residential broadband service, and require USDA to verify that an area is unserved using data from the National Telecommunications and Information Administration and the Federal Communications Commission. Applicants must post the area they plan to serve with USDA so that other broadband providers that may be in the area can either confirm or deny that the proposed area is unserved. 

The broadband reforms in the Senate farm bill will promote rural broadband in truly unserved areas of the country; refine the definition of an unserved community; provide the opportunity for incumbent providers to attest whether a specific loan application area is already served by a broadband provider; and offer additional measures to protect against broadband overbuild using federal taxpayer dollars. 

This rare instance of fiscal restraint and program reform in the farm bill is to be commended, and should be adopted in the conference with the House when Congress returns from the July 4 recess.

Deborah Collier serves as the director of technology and telecommunications policy for Citizens Against Government Waste, a nonprofit group aimed at promoting limited government.