Broadband Stimulus Rules Announced in U.S., Net Neutrality Enshrined

Following a public consultation period, the National Telecommunications Information Administration (NTIA) has published the Notice Of Funds Availability (NOFA; for full text, see here), which established the more specific eligibility criteria and conditions on which funding will be allocated. Funds will be awarded by the Rural Utilities Service (RUS) through the Broadband Initiatives Program (BIP), which has an additional US$2.5 billion to award in grants and loans, and the Broadband Technology Opportunities Program (BTOP) of the NTIA, which has US$4.7 billion to award in grants. The money is intended to support infrastructure deployments in un-served and underserved areas, enhance public computer centre capacity, and promote sustainable adoption projects (see United States: 30 January 2009: Stimulus Bill Approved by U.S. House of Representatives and United States: 12 March 2009: Broadband Stimulus Talks in U.S. Raise Questions, Few Answers).

Applications for funds will be accepted between 14 July and 14 August, with the first round of funding—amounting to a total of US$4 billion—set to start flowing before the end of the year, making awards by the end of September, and projects to be substantially completed within two years. Funding from both agencies will be available through a single application form.

The RUS BIP programme will award grants and loans where 75% of the funded area is in a rural area "lacking sufficient access to high-speed broadband service, to facilitate rural economic development". Matched loan/grant combinations will be favoured, with a 20% minimum of self funding for grants. The capability to rapidly begin deploying is also favoured. Priority will be given to projects that give end users a choice of providers, serve the highest proportion of rural residents without broadband access, and are current or former RUS borrowers and that will be fully funded and ready to deploy as soon as RUS funding is received. Some US$2.4 billion has been set aside for this round of funding, with US$1.2 billion for last-mile projects, US$800 million for middle-mile projects, and a US$325,000 "national reserve".

The NTIA BTOP programme will aim to "spur job creation, stimulate long-term economic growth and opportunity, and narrow gaps in broadband deployment and adoption". US$1.6 billion is available through this NOFA. It has five "core purposes", including providing access to un-served or underserved areas; providing access, education, training, equipment, and support to institutions; improving access and use by public safety agencies; and stimulating demand for broadband, economic growth, and job creation. It will do this under three categories of projects:

• Broadband Infrastructure: including "last-mile" and "middle-mile" (inter-office transport, backhaul, Internet connectivity, or special access) projects. Up to US$1.2 billion will be made available.
• Public Computer Centres: in publicly accessible locations such as at community colleges, public libraries, health centres, and job-service facilities, for which at least US$200 million will be made available, with US$50 million of this through the NOFA.
• Sustainable Broadband Adoption: including education, awareness and training, access to equipment, and support for vulnerable/under-utilising population groups, for which at least US$250 million will be made available, with US$150 million allocated through this NOFA.

The NTIA will be technologically neutral (fixed and mobile wireless, fibre, and satellite projects will be viable), but the NTIA will require non-discrimination and network-interconnection obligations on awardees, with contractual obligations that they adhere to the FCC broadband policy statement. This was used by the FCC last year to essentially apply "net neutrality" requirements, preventing traffic management practices against Comcast (see United States: 22 August 2009: Comcast to Target Heavy Users Instead of Applications Following Net Neutrality Judgement).

US$350 million has been set aside as available for the State Broadband Data and Development Grant Program, and for producing a broadband availability map for use by policy-makers and consumers, which will be detailed in a forthcoming NOFA.

Projects may span multiple categories, and a two-step process will narrow down the pool of viable projects before fully validating and selecting the most highly qualified applications. Additional supporting materials are likely to be required to progress in the second stage. Applicants showing social or economic disadvantage will be better considered, while states will also be able to provide input as to preferred projects. The overall allocation of grants will also seek to ensure that they are fairly distributed.

The public consultation raised the question of definition of basic nomenclature, defined in this resulting NOFA. The key terms are reproduced here:

Broadband: Broadband means providing two-way data transmission with advertised speeds of at least 768 Kbps downstream and at least 200 Kbps upstream to end users, or providing sufficient capacity in a middle-mile project to support the provision of broadband service to end users.

Underserved area: Any area where one of the following three conditions applies: no more than 50% of the households in the proposed funded service area have access to facilities-based, terrestrial broadband service at greater than the minimum broadband transmission speed; no fixed- or mobile-broadband service provider advertises broadband transmission speeds of at least 3 mbps downstream in the proposed funded service area; or the rate of broadband subscribership for the proposed funded service area is 40% of households or less.

Unserved area: A proposed funded service area composed of one or more contiguous census blocks, where at least 90% of households in the proposed funded service area lack access to facilities-based, terrestrial broadband service, either fixed or mobile, at the minimum broadband transmission speed.

Remote area: An unserved, rural area 50 miles from the limits of a non-rural area.

Rural area: Any area, as confirmed by the latest decennial census of the Bureau of the Census, which is not located within either a city, town, or incorporated area that has a population of greater than 20,000 inhabitants, or an urbanised area contiguous and adjacent to a city or town that has a population of greater than 50,000 inhabitants.

Outlook and Implications