[Federal Register Volume 65, Number 234 (Tuesday, December 5, 2000)]
[Notices]
[Pages 75920-75921]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-30872]


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 Notices
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 This section of the FEDERAL REGISTER contains documents other than rules 
 or proposed rules that are applicable to the public. Notices of hearings 
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  Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / 
Notices  

[[Page 75920]]



DEPARTMENT OF AGRICULTURE

Rural Utilities Service


Construction and Installation of Broadband Telecommunications 
Services in Rural America; Availability of Loan Funds

AGENCY: Rural Utilities Service, USDA.

ACTION: Notice of Funds Availability.

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SUMMARY: The Rural Utilities Service (RUS) announces a new loan program 
and the availability of loan funds under this program to finance the 
construction and installation of broadband telecommunications services 
in rural America. The President of the United States and the United 
States Congress have made $100 million in treasury rate loan funds 
available, through a one-year Pilot Program, to encourage 
telecommunications carriers to provide broadband service to rural 
consumers where such service does not currently exist. This program 
will provide loan funds, on an expedited basis, to communities up to 
20,000 inhabitants to ensure rural consumers enjoy the same quality and 
range of telecommunications services that are available in urban and 
suburban communities. Loan funds are available immediately and 
applications will be processed and approved on a first-come, first 
served basis throughout FY 2001 until the appropriation is utilized in 
its entirety.

DATES: Applications for loans will be accepted as of the date of this 
notice and will be accepted anytime on or before September 30, 2001; 
however, all applications must be postmarked no later than September 
30, 2001. Applications will be processed and approved on a first-come, 
first-served basis until the $100 million appropriation is utilized in 
its entirety.

FOR FURTHER INFORMATION CONTACT: Roberta D. Purcell, Assistant 
Administrator, Telecommunications Program, Rural Utilities Service, 
STOP 1590, 1400 Independence Avenue, SW., Washington, DC 20250-1590, 
Telephone (202) 720-9554, Facsimile (202) 720-0810.

SUPPLEMENTARY INFORMATION:

General Information

    For FY 2001, $100 million in loans will be made available for the 
construction and installation of facilities and for other costs as RUS 
deems necessary to provide broadband services in rural areas. The 
broadband pilot program is authorized by 7 U.S.C. 950 aaa.

Applications

    Applications will be accepted as discussed previously in the 
``Dates'' section. All interested parties are strongly encouraged to 
contact the Rural Utilities Service, USDA to discuss its financial 
needs and eligibility.

Use of Loan Funds

    Loan funds may be used to finance the improvement, expansion, 
construction, and operation of systems or facilities to furnish or 
improve broadband service in rural areas.

Definition of Broadband Services

    As used in this notice, the term broadband services means providing 
an information rate equivalent to at least 200 kilobits/second in the 
consumer's connection to the network, both from the provider to the 
consumer (downstream) and from the consumer to the provider (upstream).

Definition of Rural Area

    As used in this notice, rural area means any area of the United 
States not included within the boundaries of any incorporated or 
unincorporated city, village, or borough having a population in excess 
of 20,000 inhabitants.

Loan Terms

    For FY 2001, $100 million in loans will be made available to 
eligible applicants. The loans will bear interest at the comparable 
Treasury rate for comparable maturities not to exceed ten years.

Eligible Applicants

    Loans may be made to legally organized entities providing, or 
proposing to provide, broadband services in rural areas. Eligible 
entities may be public bodies, cooperatives, nonprofits, and limited 
dividend or mutual associations and must be incorporated or a limited 
liability company.

RUS Findings

    Feasibility of and security for the Loan. A borrower shall provide 
RUS with satisfactory evidence to enable the Administrator to determine 
that the security for the loan is reasonably adequate and that the loan 
will be repaid on time. Factors used in making this determination 
include, but are not limited to:
    (1) Evidence of sufficient revenues from the borrower's system, in 
excess of operating expenditures (including maintenance and 
replacement), for full repayment of the loan with interest;
    (2) Reasonable assurance of achieving market penetration 
projections upon which the loan is based;
    (3) Adequate security for the loan;
    (4) Appropriate financial controls included in the loan documents; 
and
    (5) Other factors determined relevant by RUS.

Loan Application

    RUS suggests that an application for a loan pursuant to this notice 
include a loan design that contains a forecast of service requirements 
and a narrative describing the planned construction and delivery of 
broadband services. The narrative should detail the purposes and 
amounts of the proposed project including construction, the proposed 
service area, and the basis for subscriber forecasts. Other items 
include:
    (1) Certified financial statements, if available;
    (2) 10 years of pro-forma financial information;
    (3) An environmental report;
    (4) Depreciation rates for the equipment being financed;
    (5) A sketch or map showing existing and proposed service areas;
    (6) A description of the current level of service available;
    (7) All other required forms for Federal assistance; and
    (8) If not a current RUS borrower, information on the owners and 
principal employees' relevant work experience that would ensure the 
success of the project.

Loan Security

    Loans must be repaid according to their terms. RUS will require 
security to

[[Page 75921]]

be provided for each loan. RUS generally obtains a lien on all the 
property financed by the loans. The borrower will need to provide 
adequate security and execute the appropriate legal documents.

Evaluation Criteria

    Loan applications will be accepted as of the date of this notice 
and will be processed and approved on a first-come, first served basis 
throughout FY 2001 until the appropriation is utilized in its entirety 
provided that:
    (1) The loan is for approved loan purposes for broadband 
telecommunications services in rural areas;
    (2) The loan is deemed to be feasible and adequate security is 
provided;
    (3) The system design is appropriate; and
    (4) All other applicable Federal requirements are met.

    Dated: November 27, 2000.
Christopher A. McLean,
Administrator, Rural Utilities Service.
[FR Doc. 00-30872 Filed 12-4-00; 8:45 am]
BILLING CODE 3410-15-P