[Federal Register Volume 74, Number 130 (Thursday, July 9, 2009)]
[Notices]
[Pages 33104-33134]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-16268]



[[Page 33103]]

-----------------------------------------------------------------------

Part III





Department of Agriculture





-----------------------------------------------------------------------



Rural Utilities Service



-----------------------------------------------------------------------





Department of Commerce





-----------------------------------------------------------------------



National Telecommunications and Information Administration



-----------------------------------------------------------------------



Broadband Initiatives Program; Broadband Technology Opportunities 
Program; Notice

  Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / 
Notices  

[[Page 33104]]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Rural Utilities Service

RIN 0572-ZA01


Broadband Initiatives Program

DEPARTMENT OF COMMERCE

National Telecommunications and Information Administration

RIN 0660-ZA28


Broadband Technology Opportunities Program

AGENCIES: Rural Utilities Service (RUS), Department of Agriculture, and 
National Telecommunications and Information Administration (NTIA), 
Department of Commerce.

ACTION: Notice of Funds Availability (NOFA) and solicitation of 
applications.

-----------------------------------------------------------------------

SUMMARY: RUS and NTIA announce general policy and application 
procedures for broadband initiatives established pursuant to the 
American Recovery and Reinvestment Act of 2009 (Recovery Act). RUS is 
establishing the Broadband Initiatives Program (BIP) which may extend 
loans, grants, and loan/grant combinations to facilitate broadband 
deployment in rural areas. NTIA is establishing the Broadband 
Technology Opportunities Program (BTOP) which makes available grants 
for deploying broadband infrastructure in unserved and underserved 
areas in the United States, enhancing broadband capacity at public 
computer centers, and promoting sustainable broadband adoption 
projects. In facilitating the expansion of broadband communications 
services and infrastructure, both programs will advance the objectives 
of the Recovery Act to spur job creation and stimulate long-term 
economic growth and opportunity.

DATES: Applications will be accepted between July 14, 2009, at 8 a.m. 
Eastern Time (ET) until August 14, 2009, at 5 p.m. ET.
    Application Submission: The application packages for electronic and 
paper submissions will be available at http://www.broadbandusa.gov.
    Electronic submissions: Electronic submissions of applications will 
allow for the expeditious review of an applicant's proposal consistent 
with the goals of the Recovery Act. As a result, all applicants 
requesting more than $1 million in assistance (in the form of grants, 
loans, or a combination of grants and loans) must file their 
application electronically. Applicants whose authorized representatives 
are individuals with disabilities, however, may submit a paper 
application irrespective of the funding size of their request.\1\ In 
addition, applicants who are requesting less than $1 million in 
assistance may forego the electronic filing requirement if filing 
electronically would impose a hardship on the applicant. Electronic 
applications must be submitted by 5 p.m. ET on August 14, 2009. The 
government electronic application system will provide a date and time 
stamped confirmation number that will serve as proof of submission.
---------------------------------------------------------------------------

    \1\ See Rehabilitation Act of 1973 Sec.  508, 29 U.S.C. 794d.
---------------------------------------------------------------------------

    Paper submissions: Applicants requesting less than $1 million in 
assistance (in the form of grants, loans, or a combination of grants 
and loans) may file their applications in a paper format if filing 
electronically would impose a hardship on the applicants. Applicants 
whose authorized representatives are individuals with disabilities may 
file their applications in a paper format irrespective of the funding 
size of their request. To the extent that applicants use electronic 
word processing software to create paper submissions, they should 
include in their filing, to the extent possible, an electronic copy of 
the paper application on an appropriate media such as a CD. This will 
assist the agencies in processing paper applications. Paper submissions 
must be postmarked no later than August 14, 2009, or hand-delivered no 
later than 5 p.m. ET on August 14, 2009, to the addresses listed in the 
Supplementary Information in this NOFA.
    Contact Information: For general inquiries regarding BIP, contact 
David J. Villano, Assistant Administrator Telecommunications Program, 
Rural Utilities Service, U.S. Department of Agriculture (USDA), e-mail: 
[email protected] telephone: (202) 690-0525. For general inquiries 
regarding BTOP, contact Anthony Wilhelm, Deputy Associate 
Administrator, Infrastructure Division, Office of Telecommunications 
and Information Applications, National Telecommunications and 
Information Administration, U.S. Department of Commerce (DOC), email: 
[email protected], telephone: (202) 482-2048. For inquiries regarding 
BIP and BTOP compliance requirements, including applicable federal 
rules and regulations protecting against fraud, waste and abuse, 
contact [email protected] for BIP and 
[email protected] for BTOP. You may obtain additional 
information regarding applications for BIP via the Internet at http://www.usda.gov/rus/telecom/ and for BTOP at http://www.ntia.doc.gov/broadbandgrants/.
    Authority: This notice is issued pursuant to the American Recovery 
and Reinvestment Act of 2009, Public Law 111-5, 123 Stat. 115 (2009) 
and the Rural Electrification Act of 1936, 7 U.S.C. 901 et seq.

SUPPLEMENTARY INFORMATION:
    Catalog of Federal Domestic Assistance (CFDA) Number: Broadband 
Initiatives Program (BIP)--10.787; Broadband Technology Opportunities 
Program (BTOP)--11.557.

Additional Items in Supplementary Information

    I. Overview: Describes the purposes of the Recovery Act, the 
broadband goals of the Recovery Act, and the establishment of BIP 
and BTOP.
    II. Funding Opportunity Description: Provides a more thorough 
description of BIP and BTOP.
    III. Definitions: Sets forth the key statutory terms and other 
terms used in BIP and BTOP.
    IV. Award Information: Describes funding availability, grant and 
loan terms, as applicable, and other award information.
    V. Eligibility Information for BIP and BTOP: Establishes 
eligibility criteria, eligibility factors, eligible and ineligible 
costs, and other eligibility requirements.
    VI. Application and Submission Information: Provides information 
regarding how to apply, application materials, and the application 
process.
    VII. Application Review Information: Establishes the evaluation 
criteria for application review.
    VIII. Anticipated Announcement and Award Dates: Identifies the 
initial announcement date for certain awards, and provides other 
information regarding BIP and BTOP.
    IX. Award Administration Information: Provides award notice 
information, administrative and national policy requirements, terms 
and conditions, and other reporting requirements for award 
recipients.
    X. Other Information: Sets forth guidance on funding, compliance 
with various laws, confidentiality, discretionary awards, and 
authorized signatures.

I. Overview

    On February 17, 2009, President Obama signed the American Recovery 
and Reinvestment Act of 2009 (Recovery Act) into law.\2\ The essential 
goal of the Recovery Act is to provide a ``direct fiscal boost to help 
lift our Nation from the greatest economic crisis in our lifetimes and 
lay the foundation for

[[Page 33105]]

future growth.'' \3\ Accordingly, the Recovery Act identifies five 
overall purposes: A. To preserve and create jobs and promote economic 
recovery; B. to assist those most impacted by the recession; C. to 
provide investments needed to increase economic efficiency by spurring 
technological advances in science and health; D. to invest in 
transportation, environmental protection, and other infrastructure that 
will provide long-term economic benefits; and E. to stabilize state and 
local government budgets.\4\ The Recovery Act further instructs the 
President and the heads of federal departments and agencies to manage 
and expend Recovery Act funds to achieve these five purposes, 
``commencing expenditures and activities as quickly as possible 
consistent with prudent management.'' \5\
---------------------------------------------------------------------------

    \2\ American Recovery and Reinvestment Act of 2009, Public Law 
111-5, 123 Stat. 115 (2009).
    \3\ President Obama, Statement on Signing the American Recovery 
and Reinvestment Act of 2009 (Feb. 17, 2009).
    \4\ Recovery Act Sec.  3(a), 123 Stat. at 115-16.
    \5\ See id. Sec.  3(b), 123 Stat. at 116.
---------------------------------------------------------------------------

    Consistent with the purposes described above, the Recovery Act 
provides RUS and NTIA with $7.2 billion to expand access to broadband 
services in the United States. In so doing, it recognizes the growing 
importance of access to broadband services to economic development and 
to the quality of life of all Americans. Specifically, the Recovery Act 
tasks RUS, NTIA, and the Federal Communications Commission (FCC) with 
leading the federal government's efforts to begin the process of 
significantly expanding the reach and quality of broadband services.
    RUS, NTIA, and the FCC have worked closely to leverage the 
authorities and resources provided in the Recovery Act to develop a 
coordinated federal government approach to addressing the challenge of 
rapidly expanding the access and quality of broadband services across 
the country. Each agency brings unique skills and resources to this 
effort. RUS has been the federal government leader in bringing 
telecommunications to rural America for decades. NTIA has experience in 
awarding technology-related grants through the Technology Opportunities 
Program and serves as the President's principal advisor on 
telecommunications and information policies.\6\ And NTIA and the FCC 
together are responsible for the development of federal 
telecommunications policy.
---------------------------------------------------------------------------

    \6\ See Technology Opportunities Program, http://www.ntia.doc.gov/otiahome/top/index.html; NTIA Organization Act of 
1992, 47 U.S.C. 901 et seq.
---------------------------------------------------------------------------

    Additionally, to aid in achieving Recovery Act objectives, on March 
10, 2009, RUS, NTIA, and the FCC co-sponsored a public meeting to 
initiate public outreach about the current availability of broadband 
service in the United States and ways in which the availability of 
broadband services could be expanded.\7\ The March 10 meeting was 
followed by the release of a Request for Information (RFI) and six days 
of additional public meetings and field hearings during March.\8\ The 
meetings and hearings included nearly 120 panelists--including 
representatives from consumer and public interest groups, state and 
local governments, tribal governments, minority and vulnerable 
populations, industry, academia, and other institutions--who provided 
comment on how to make RUS's and NTIA's broadband initiatives 
effective, equitable, and efficient.\9\
---------------------------------------------------------------------------

    \7\ See Joint Notice of Public Meeting, 74 FR 8914 (Feb. 27, 
2009).
    \8\ See Joint Request for Information and Notice of Public 
Meetings, 74 FR 10716 (Mar. 12, 2009).
    \9\ Agendas, transcripts, and presentations from each meeting 
are available on NTIA's Web site at: http://www.ntia.doc.gov/broadbandgrants/meetings.html.
---------------------------------------------------------------------------

    In response to the RFI and the public meetings, RUS and NTIA 
received over 1,000 comments from institutions and individuals.\10\ RUS 
and NTIA received comments on multiple issues surrounding BIP and BTOP, 
including how the terms ``broadband,'' ``unserved area,'' and 
``underserved area'' should be defined, resulting in the definitions 
and program requirements announced in this NOFA. These comments played 
a crucial role in formulating the structure of the RUS and NTIA 
broadband programs. For further discussion and explanation of the 
agencies' reliance on the public comments in the policy decisions 
involved in BIP and BTOP, see the attached Policy Justification found 
in the Appendix at the end of this NOFA.
    RUS and NTIA Recovery Act programs implement new authorities. 
Specifically, the Recovery Act expands RUS's existing authority to make 
loans and provides new authority to make grants to facilitate broadband 
deployment in rural areas. The Recovery Act appropriates $2.5 billion 
of budget authority for RUS to extend loans, loan/grant combinations, 
and grants to projects where at least 75 percent of an RUS-funded area 
is in a rural area that lacks sufficient access to high speed broadband 
service to facilitate rural economic development. RUS has developed BIP 
to fund broadband infrastructure in qualifying areas.\11\
---------------------------------------------------------------------------

    \10\ Comments may be viewed on NTIA's Web site at: http://www.ntia.doc.gov/broadbandgrants/comments.
    \11\ See Recovery Act div. A, tit. I, 123 Stat. at 118.
---------------------------------------------------------------------------

    The Recovery Act also appropriates $4.7 billion to NTIA to provide 
grants for broadband initiatives throughout the United States, 
including unserved and underserved areas.\12\ NTIA is tasked to spur 
job creation, stimulate long-term economic growth and opportunity, and 
narrow gaps in broadband deployment and adoption. The NTIA program is 
titled BTOP. Consistent with its appropriation, BTOP is divided into 
three categories of projects: Broadband Infrastructure, Public Computer 
Centers, and Sustainable Broadband Adoption.
---------------------------------------------------------------------------

    \12\ See id. div. A, tit. II, 123 Stat. at 128.
---------------------------------------------------------------------------

    Applications to fund broadband infrastructure projects in areas 
which are at least 75 percent rural are required to be submitted to RUS 
for consideration under BIP. If such applicants intending to serve 
rural areas also choose to be considered for BTOP funding, then they 
must complete the additional elements required of BTOP infrastructure 
applicants. NTIA may make awards to such applications NTIA determines 
to be meritorious after RUS has reviewed the application and determined 
not to fund it. All other applications for Broadband Infrastructure 
projects, as well as applications for Public Computer Centers or 
Sustainable Broadband Adoption projects, must be submitted to NTIA for 
consideration under BTOP.
    The purpose of this NOFA is to describe the availability of the BIP 
and BTOP funds and set forth the application requirements for those 
entities wishing to participate in one or more of the Recovery Act's 
broadband programs. Applicants may submit projects that fit within one 
or more categories. Each application will be compared against objective 
criteria to determine whether an award is warranted.
    In order to balance the burdens on applicants versus the needs of 
the agencies to efficiently evaluate applications, RUS and NTIA have 
developed a two-step application process. In step one, the goal is to 
create a pool of viable and potentially fundable applications. Step two 
is to fully validate the submissions in step one and identify the most 
highly qualified applications for funding.
    Rapid disbursement of the funds available under this program is 
important because of the short time frames imposed by the Recovery Act. 
Additionally, a commitment to transparency in the award process and

[[Page 33106]]

rigorous reporting requirements will help ensure accountability.
    Approximately $4 billion of program level funding has been 
allocated to this NOFA by RUS and NTIA. The remaining funds will be 
made available under subsequent NOFAs. The requirements for subsequent 
NOFAs may differ from this NOFA to better achieve the agencies' 
priorities.

II. Funding Opportunity Description

A. BIP

1. BIP Objectives
    The Recovery Act expands RUS's existing authority to make loans and 
provides new authority to make grants for the purpose of facilitating 
broadband deployment in rural communities. Specifically, the Recovery 
Act requires that 75 percent of a funded area be in a rural area that 
lacks sufficient access to high speed broadband service to facilitate 
economic development. Because of the short time frames imposed by the 
Recovery Act, the requirements outlined in this NOFA will be used to 
govern program implementation.
    Under BIP, RUS will award grants, loans, and loan/grant 
combinations for broadband infrastructure. Grants under BIP are to be 
used to fund applications proposing to exclusively serve remote, 
unserved, rural areas. BIP loan and loan/grant combination funds are to 
be used to provide funding to applications proposing to serve non-
remote and underserved rural areas. Projects which include non-remote 
and remote areas will be funded by loans or loan/grant combinations. 
The size of the grant portion of any loan/grant combination award is 
determined by the applicant, but cannot exceed the amount of the loan 
portion of the award. RUS will favor applications that propose a higher 
percentage of loan funds. Applicants may request 100 percent loan 
funding. RUS will seek to make the extension of broadband 
infrastructure into difficult-to-serve areas affordable--a key 
objective of BIP funding--through substantial grant funds and 
attractive loan terms with reasonable security requirements.
    The Recovery Act establishes the rapid disbursement of the funds as 
an important priority for the BIP program. However, the program also 
must be administered judiciously to ensure responsible use of public 
funds. To balance these two objectives, RUS will favor funding projects 
that can commence construction promptly and demonstrate technical and 
financial feasibility, organizational capacity, and compliance with 
other Administration priorities. A commitment to transparency in the 
award process and rigorous reporting requirements will help ensure 
accountability.
2. BIP Priorities
    The Recovery Act requires that 75 percent of a BIP-funded area be 
in a rural area that ``lacks sufficient access to high speed broadband 
service to facilitate rural economic development.'' \13\ Additionally, 
the Recovery Act mandates that priority be given to projects which: a. 
Give end users a choice of providers; b. Serve the highest proportion 
of rural residents that lack access to broadband service; c. Are 
projects of current or former RUS borrowers (Title II borrowers); and 
d. Are fully funded and ready to start once Recovery Act funding is 
received. BIP application scoring criteria awards projects that 
implement these priorities.\14\
---------------------------------------------------------------------------

    \13\ Id. div. A, tit. I, 123 Stat. at 118.
    \14\ Id. at 118-19.
---------------------------------------------------------------------------

3. BIP Application and Selection Process
    RUS has adopted a two-phase application process. Step one of the 
application process requires the submission of the information 
described in section VI.D.1.a. This information will be evaluated by 
RUS for completeness and eligibility. Ineligible and incomplete 
applications will be rejected. Eligible applications will be evaluated 
and ranked based on the applicable scoring criteria described in 
section VII. The highest scoring applications will be invited to 
participate in step two of the application process by submitting the 
additional documentation described in section VI.D.1.b. to further 
support the applicants' representations made in step one of the 
application process. If the additional documentation does not 
adequately verify the first submission, then the application will be 
rejected.

B. BTOP

1. BTOP Objectives
    Section 6001 of the Recovery Act establishes a national broadband 
service development and expansion program to promote five core 
purposes:
    a. To provide access to broadband service to consumers residing in 
unserved areas of the country;
    b. To provide improved access to broadband service to consumers 
residing in underserved areas of the country;
    c. To provide broadband access, education, awareness, training, 
equipment, and support to community anchor institutions (e.g., schools, 
libraries, medical facilities), or organizations and agencies serving 
vulnerable populations (e.g., low-income, unemployed, aged), or job-
creating strategic facilities located in state- or federally designated 
economic development areas;
    d. To improve access to, and use of, broadband service by public 
safety agencies; and
    e. To stimulate the demand for broadband, economic growth, and job 
creation.\15\
---------------------------------------------------------------------------

    \15\ See id. Sec.  6001(b), 123 Stat. at 512-13.
---------------------------------------------------------------------------

    The Recovery Act provides $4.7 billion to NTIA for BTOP, to be 
awarded by September 30, 2010, which represents a significant 
investment to advance President Obama's national broadband 
strategy.\16\ Of this amount, at least $200 million will be made 
available for competitive grants for expanding public computer center 
capacity. In addition, at least $250 million will be available for 
competitive grants for innovative programs to encourage sustainable 
adoption of broadband services. Up to $350 million is available from 
the Recovery Act to fund the State Broadband Data and Development Grant 
Program authorized by the Broadband Data Improvement Act \17\ and to 
support the development and maintenance of a nationwide broadband map 
for use by policymakers and consumers. A forthcoming NOFA will outline 
policies and procedures for the State Broadband Data and Development 
Grant Program.
---------------------------------------------------------------------------

    \16\ See id. div. A, tit. II, 123 Stat. at 128.
    \17\ Public Law 110-385, 122 Stat. 4096 (to be codified at 47 
U.S.C. 1301 et seq.).
---------------------------------------------------------------------------

    BTOP funds are available through three categories of eligible 
projects: Broadband Infrastructure, Public Computer Centers, and 
Sustainable Broadband Adoption.\18\ The Broadband Infrastructure 
category consists of two components--Last Mile and Middle Mile--and 
will fund projects to deliver broadband access to unserved and 
underserved areas. The Public Computer Center category will fund 
projects that expand public access to broadband service and enhance 
broadband capacity at entities, such as community colleges and public 
libraries, that permit the public to use these computing centers.\19\ 
The Sustainable Broadband Adoption category will fund innovative 
projects that promote broadband demand, including projects focused on 
providing broadband education, awareness, training, access, equipment 
or support,

[[Page 33107]]

particularly among vulnerable population groups where broadband 
technology has traditionally been underutilized.\20\
---------------------------------------------------------------------------

    \18\ See Recovery Act div. A, tit. II, 123 Stat. at 128.
    \19\ Id. div. A, tit. II & Sec.  6001(b)(3), 123 Stat. at 128, 
512-13.
    \20\ Id. div. A, tit. II & 6001(b)(5), 123 Stat. at 128, 513.
---------------------------------------------------------------------------

    The Recovery Act also recognizes the valuable role that the states 
and territories can play in implementing BTOP, and permits NTIA to 
consult with them in identifying unserved and underserved areas within 
their borders and in allocating grant funds for projects in or 
affecting their jurisdictions.\21\ Consistent with the Recovery Act, 
NTIA has consulted with the FCC on this NOFA.
---------------------------------------------------------------------------

    \21\ Id. Sec.  6001(c), 123 Stat. at 513.
---------------------------------------------------------------------------

2. BTOP Priorities
    All projects funded under BTOP must advance one or more of the five 
statutory purposes outlined above. The program is designed to extend 
broadband access to unserved areas, improve access to underserved 
areas, and expand broadband access to a wide range of institutions and 
individuals, including vulnerable populations. It will seek to serve 
the highest priority needs for federal investment--particularly 
projects that offer the potential for economic growth and job creation, 
and provide benefits to education, health care, and public safety. The 
program will support viable, sustainable, and scalable projects. NTIA 
will favor proposals that satisfy the public-interest objectives 
specified in the statute and detailed in this NOFA. These projects can 
serve as models for future investors once economic conditions improve.
    NTIA expects to distribute grants across geographic areas 
addressing these various public purposes. It will issue awards on a 
technologically neutral basis, and expects to support projects 
employing a range of technologies (e.g., fixed and mobile wireless, 
fiber, satellite). In making these awards, NTIA will also take into 
consideration whether an applicant is a socially and economically 
disadvantaged small business concern as defined under section 8(a) of 
the Small Business Act (SBA) (15 U.S.C. 637(a)(4)).\22\ Finally, it is 
also important to highlight the desire of the Recovery Act to extend 
non-discrimination and network interconnection obligations on awardees. 
In particular, the Recovery Act directs NTIA to impose contractual 
conditions on BTOP grants that would, at a minimum, adhere to the 
principles contained in the FCC's broadband policy statement.\23\
---------------------------------------------------------------------------

    \22\ See id. Sec.  6001(h)(3), 123 Stat. at 514-15.
    \23\ Id. Sec.  6001(j), 123 Stat. at 515.
---------------------------------------------------------------------------

3. BTOP Application and Selection Process
    NTIA will employ a two-step application review process. First, 
however, NTIA will conduct an initial screen of applications to 
determine whether an application meets the mandatory threshold 
requirements, such as application completeness, set forth in section 
V.C. of this NOFA. These are mandatory threshold requirements that 
qualify an application for further review. Applicants that fail to meet 
any of the eligibility factors will be notified in writing of the 
reason for the rejection. Subsequent to this initial screening, 
applications will proceed to the step one review process. The 
applications will receive at least three independent reviews (by a 
three-member review panel) against the eligibility factors as well as 
against the evaluation criteria provided in this NOFA. This review 
panel will be comprised of at least three peer/expert reviewers who 
have demonstrated subject-matter expertise. No consensus advice will be 
given by the reviewers. Each reviewer will independently score the 
application, and reviewer scores will be averaged. Based on these 
scores, applications that are considered the most highly qualified will 
advance to the step two, ``due diligence,'' review for further 
consideration. All other applications will be rejected, and the 
applicants will be notified in writing of the reason for the rejection.
    In step two of the review process, the remaining applicants will be 
asked to submit additional information, as appropriate, such as more 
detailed plans or supporting documents \24\ to further substantiate the 
representations made in their application.
---------------------------------------------------------------------------

    \24\ See infra section VI.D.1.b. for more details regarding the 
required additional information.
---------------------------------------------------------------------------

    The supplemental information will be reviewed and analyzed by NTIA 
staff with the support of external engineering, business, and subject-
matter experts to evaluate the consistency of the applications with the 
supporting documents and ensure applications merit awards. Applicants 
whose supporting documents do not adequately substantiate the 
representations in their application may be rejected, and the 
applicants will be notified in writing of the reason for the rejection. 
Upon completion of its due diligence, NTIA program staff will complete 
its analysis of each application by assigning a rating based on its 
consistency with the representations made in the application. This 
rating will be based on a five-point scale (1-5), with a five 
representing the highest consistency and conformity with the 
information already provided, especially on technical and budget 
considerations.
    All states will be provided an opportunity to make recommendations 
concerning the allocation of funds for qualifying projects in or 
affecting the individual states during step two of the BTOP application 
process, regardless of their participation in the State Broadband Data 
and Development Grant Program. During step two of the BTOP application 
process, the Governor's office of each state will receive a list of the 
applications under consideration. States may provide a list and 
prioritization of recommended projects, along with an explanation of 
why the selected proposals meet the greatest needs of the state. States 
are strongly encouraged to provide mapping and planning data to support 
their recommendations. States participating in the State Broadband Data 
and Development Grant Program may rely on their submission under that 
program to fulfill this request. All states will have 20 calendar days 
from the date of notification to submit to NTIA their recommendations.
    Upon completion of the step two review, NTIA reserves the right to 
discuss with the applicant specific modifications to the application to 
resolve any differences that may exist between the applicant's original 
request and what NTIA is willing to fund. Not all applicants contacted 
will necessarily receive a BTOP award. The Director of BTOP (BTOP 
Director) will then prepare and present a package of recommended grant 
awards to the Associate Administrator for the Office of 
Telecommunications and Information Applications (OTIA Associate 
Administrator) for review and approval. The BTOP Director's 
recommendations and the OTIA Associate Administrator's review and 
approval will take into account the following selection factors:
    a. The Evaluation Criteria Review score of the peer/expert 
reviewers;
    b. The Due Diligence Review rating of the federal reviewers and the 
analysis of NTIA program staff;
    c. Satisfaction of the program's purpose and priorities as 
described in the section entitled ``Program Description'' (e.g., 
considering whether the applicant is a socially and economically 
disadvantaged small business concern; ensuring that service for health 
care delivery, education, and children is enhanced to the greatest

[[Page 33108]]

population of users; improve access to and use by public safety; 
ensuring that the greatest broadband speed is provided to the greatest 
population of users as set forth in the Recovery Act; providing 
broadband access to consumers in unserved areas; improving broadband 
service in underserved areas);
    d. The geographic distribution of the proposed grant awards and 
diversity of populations served (e.g., ensuring that, to the extent 
practical, NTIA award not less than one grant in each state as set 
forth in the Recovery Act);
    e. The range of technologies and uses of the technologies employed 
by the proposed grant awards;
    f. Avoidance of redundancy, conflicts with the initiatives of other 
federal agencies, including Department of Agriculture loan and grant 
programs for broadband services, and, to the extent practical, 
avoidance of unjust enrichment; \25\
---------------------------------------------------------------------------

    \25\ Recovery Act Sec.  6001(h)(2)(D), 123 Stat. at 515.
---------------------------------------------------------------------------

    g. The availability of funds; and
    h. If applicable, the recommendations of states, including, but not 
limited to, such recommendations as described in their application for 
the State Broadband Data and Development Grant Program or as 
subsequently provided to NTIA either on its own or along with the 
submission of state-level broadband maps.\26\
---------------------------------------------------------------------------

    \26\ Consistent with Recovery Act, the application for the State 
Broadband Data and Development Grant Program will provide 
participating states the opportunity to identify unserved and 
underserved areas in their state. In their Mapping Grant 
application, states may also make recommendations concerning the 
allocation of funds for projects in or affecting the individual 
states at the time the state submits its Mapping Grant application.
---------------------------------------------------------------------------

    Upon approval by the OTIA Associate Administrator, the BTOP 
Director's recommendation will then be presented to the Selecting 
Official, the Assistant Secretary of NTIA. The Assistant Secretary 
selects the applications for grant awards, taking into consideration 
the BTOP Director's recommendations and the degree to which the 
application package, taken as a whole, satisfies the selection factors 
described above and the program's stated purposes and priorities as set 
forth in section II.B of this NOFA. Awards will be made on a rolling 
basis subject to the availability of funds.

III. Definitions

    The terms and conditions provided in this NOFA are applicable to 
and for purposes of this NOFA only. These terms, conditions, and 
definitions may change in subsequent NOFAs issued regarding BIP and 
BTOP.
    Administrator means the RUS Administrator, or the Administrator's 
designee.
    Applicant means an entity requesting approval of an award under 
this NOFA.
    Assistant Secretary means the Assistant Secretary for 
Communications and Information, National Telecommunications and 
Information Administration, Department of Commerce, or the Assistant 
Secretary's designee.
    Award documents mean, collectively, grant agreement, loan documents 
and/or loan/grant combination documents.
    Award means a grant, loan, or loan/grant combination made under 
this NOFA by either RUS or NTIA.
    Awardee means a grantee, borrower, or borrower/grantee.
    BIP means the Broadband Initiatives Program, administered by the 
RUS, under the Recovery Act.
    Borrower means the recipient of a RUS loan under this NOFA.
    Borrower/grantee means the recipient of a RUS loan/grant 
combination under this NOFA.
    Broadband means providing two-way data transmission with advertised 
speeds of at least 768 kilobits per second (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.
    BTOP means the Broadband Technology Opportunities Program, 
administered by NTIA, under the Recovery Act.
    Build-out means the construction or improvement of facilities and 
equipment as specified in the application.
    Composite economic life means the weighted (by dollar amount of 
each class of facility in the loan) average economic life of all 
classes of facilities financed by a BIP loan.
    Community anchor institutions means schools, libraries, medical and 
healthcare providers, public safety entities, community colleges and 
other institutions of higher education, and other community support 
organizations and agencies that provide outreach, access, equipment and 
support services to facilitate greater use of broadband service by 
vulnerable populations, including low-income, unemployed, and the aged.
    Critical community facilities means public facilities that provide 
community services essential for supporting the safety, health, and 
well-being of residents, including, but not limited to, emergency 
response and other public safety activities, hospitals and clinics, 
libraries and schools.
    Current ratio means the BIP applicant's current assets divided by 
the current liabilities; all financial terms are defined by GAAP.
    Economic life means the estimated useful service life of an asset 
as determined by RUS in connection with awards made under BIP.
    Forecast period means the time period used by RUS and NTIA to 
determine if an application is financially feasible. Financial 
feasibility of an application is based on five-year projections.
    GAAP means generally accepted accounting principles.
    Grant agreement means the agreement between RUS or NTIA and the 
grantee for grants awarded under this NOFA, including any amendments 
thereto, available for review at http://www.broadbandusa.gov.
    Grant funds mean federal funds provided pursuant to a grant made 
under this NOFA.
    Grantee means the recipient of a grant under this NOFA.
    Last Mile project means any infrastructure project the predominant 
purpose of which is to provide broadband service to end users or end-
user devices (including households, businesses, community anchor 
institutions, public safety entities, and critical community 
facilities).
    Last Mile Non-Remote project means any broadband infrastructure 
project (or group of projects) that is not exclusively a last mile 
remote area project, and that provides broadband service to the end 
user or end-user devices in a service area eligible for BIP funding.
    Last Mile Remote Area project means any broadband infrastructure 
project that provides broadband service to the end user or to end-user 
devices only in a remote area(s) eligible for BIP funding.
    Loan means any loan made under this NOFA by RUS.
    Loan contract means the loan agreement between RUS and the 
borrower, including all amendments thereto, available for review at 
http://www.broadbandusa.gov.
    Loan documents mean the loan contract, note(s), and security 
instrument between the borrower and RUS and any associated documents 
pertaining to the loan.
    Loan/grant means any loan/grant combination made under this NOFA by 
RUS.
    Loan/grant contract means the loan/grant contract between RUS and 
the borrower/grantee, including all amendments thereto available at 
http://www.broadbandusa.gov.
    Loan/grant documents mean the loan/grant contract, note(s), and 
security

[[Page 33109]]

instrument between the borrower/grantee and RUS and any associated 
documents pertaining to the loan/grant.
    Middle Mile project means a broadband infrastructure project that 
does not predominantly provide broadband service to end users or to 
end-user devices, and may include interoffice transport, backhaul, 
Internet connectivity, or special access.
    Pre-application expense means any reasonable expense incurred after 
the release of this NOFA to prepare an application, including 
engineering costs and accountant/consultant fees.
    Proposed funded service area means the area (either in all or part 
of an existing service area or a new service area) where the applicant 
is requesting BIP or BTOP funds to provide broadband service pursuant 
to this NOFA.
    Public computer center means a place, including but not limited to 
community colleges, libraries, schools, youth centers, employment 
service centers, Native American chapter houses, community centers, 
senior centers, assistive technology centers for people with 
disabilities, community health centers, and Neighborhood Network 
Centers in public housing developments, that provide broadband access 
to the general public or a specific vulnerable population, such as low-
income, unemployed, aged, children, minorities and people with 
disabilities.
    RE Act means the ``Rural Electrification Act of 1936,'' as amended 
(7 U.S.C. 901 et seq.).
    Recovery Act means the American Recovery and Reinvestment Act of 
2009, Public Law No. 111-5, 123 Stat. 115 (2009).
    Remote area means an unserved, rural area 50 miles from the limits 
of a non-rural area.
    Rural area means any area, as confirmed by the latest decennial 
census of the Bureau of the Census, which is not located within: 1. A 
city, town, or incorporated area that has a population of greater than 
20,000 inhabitants; or 2. an urbanized area contiguous and adjacent to 
a city or town that has a population of greater than 50,000 
inhabitants. For purposes of the definition of rural area, an urbanized 
area means a densely populated territory as defined in the latest 
decennial census of the U.S. Census Bureau.
    Security document means any mortgage, deed of trust, security 
agreement, financing statement, or other document that RUS determines 
is necessary to perfect its interest in the security for a loan or 
loan/grant.
    Service area means the entire area within which a service provider 
either offers or intends to offer broadband service and may include the 
proposed funded service area.
    State means, for purposes of BTOP, a state or political subdivision 
thereof, the District of Columbia, or a territory or possession of the 
United States.
    TIER means times interest earned ratio. TIER is the ratio of a BIP 
applicant's net income (after taxes) plus (adding back) interest 
expense, all divided by interest expense (existing and any new interest 
expense including the interest expense associated with the proposed 
loan); all financial terms are defined by GAAP.
    Underserved area means a proposed funded service area, composed of 
one or more contiguous census blocks \27\ meeting certain criteria that 
measure the availability of broadband service and the level of 
advertised broadband speeds. These criteria conform to the two distinct 
components of the Broadband Infrastructure category of eligible 
projects--Last Mile and Middle Mile. Specifically, a proposed funded 
service area may qualify as underserved for last mile projects if at 
least one of the following factors is met, though the presumption will 
be that more than one factor is present: 1. No more than 50 percent 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 (set forth in the definition of 
broadband above); 2. No fixed or mobile broadband service provider 
advertises broadband transmission speeds of at least three megabits per 
second (``mbps'') downstream in the proposed funded service area; or 3. 
The rate of broadband subscribership for the proposed funded service 
area is 40 percent of households or less. A proposed funded service 
area may qualify as underserved for Middle Mile projects if one 
interconnection point terminates in a proposed funded service area that 
qualifies as unserved or underserved for Last Mile projects.
---------------------------------------------------------------------------

    \27\ Census blocks are the smallest geographic areas for which 
the U.S. Bureau of the Census collects and tabulates decennial 
census data. Census blocks are formed by streets, roads, railroads, 
streams and other bodies of water, other visible physical and 
cultural features, and the legal boundaries shown on Census Bureau 
maps. Census data at this level serve as a valuable source for 
small-area geographic studies. See the Census Bureau's Web site at 
http://www.census.gov for more detailed information on its data 
gathering methodology.
---------------------------------------------------------------------------

    Unserved area means a proposed funded service area, composed of one 
or more contiguous census blocks, where at least 90 percent 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 (set forth in the 
definition of broadband above). A household has access to broadband 
service if the household can readily subscribe to that service upon 
request.

IV. Award Information

A. Available Funds for BIP

1. General
    Approximately $2,400,000,000 in program level funding has been set 
aside for funding opportunities under this NOFA.
2. Funding Limits
    Award amounts under this NOFA will be limited as follows:
a. Last Mile Projects
    Up to $1,200,000,000 is available for Last Mile projects. These 
projects may consist of Remote Area projects or Non-Remote projects. Up 
to $400,000,000 is available for grants for Remote Area projects. Up to 
$800,000,000 is available for loans or loan/grant combinations for Non-
Remote projects.
b. Middle Mile Projects
    Up to $800,000,000 is available for loans or loan/grant 
combinations for Middle Mile projects.
3. Repooling
    For categories that do not receive applications that request the 
full amount of allocated funds, excess funds may be directed to another 
category at RUS's discretion. Additionally, if RUS does not make awards 
in the full amount allocated to a category, RUS may, at its discretion, 
direct such excess funds to another category.
4. National Reserve
    Up to $325,000,000 is available for a national reserve. These funds 
may be used to augment the BIP funding categories established above, or 
remain unused for subsequent NOFAs. In any event, all funds will be 
awarded no later than September 30, 2010.
5. Unused Funds
    Funds made available but not used for this NOFA may be directed to 
subsequent NOFAs.
6. Award Period
    All awards under BIP must be made no later than September 30, 2010. 
While the completion time will vary depending on the complexity of the 
project, award recipients must

[[Page 33110]]

substantially complete projects supported by this program no later than 
two years, and projects must be fully completed no later than three 
years, following the date of issuance of the award.
7. Type of Funding Instrument
    The funding instruments for BIP will be a grant, loan, and loan/
grant combination.

B. Available Funds for BTOP

1. General
    Up to $1,600,000,000 in budget authority has been set aside for 
funding opportunities under this NOFA. Publication of this NOFA does 
not obligate NTIA to award any specific project or obligate all or any 
parts of any available funds, although the Recovery Act indicates that 
the Assistant Secretary shall award at least one grant in each state to 
the extent practical by September 30, 2010.\28\
---------------------------------------------------------------------------

    \28\ Recovery Act Sec.  6001(h)(1), 123 Stat. at 514.
---------------------------------------------------------------------------

2. Funding Limits
    Up to $1.4 billion is available to be awarded under this NOFA and 
will be allocated in the following categories:
    a. Broadband Infrastructure projects will be awarded no greater 
than $1.2 billion;
    b. Public Computer Center projects will be awarded no greater than 
$50 million; and
    c. Sustainable Broadband Adoption projects will be awarded no more 
than $150 million.
3. Repooling
    Subject to the statutory thresholds set forth in the Recovery Act, 
NTIA retains the discretion to divert funds from one category of 
projects to another.
4. National Reserve
    Up to $200 million is available for a national reserve. These funds 
may be used to augment the BTOP funding categories established above, 
or remain unused for subsequent NOFAs. In any event, all funds will be 
awarded no later than September 30, 2010.
5. Unused Funds
    Funds not awarded under this NOFA may be used to fund subsequent 
NOFAs.
6. Award Period
    All awards under BTOP must be made no later than September 30, 
2010.\29\ While the completion time will vary depending on the 
complexity of the project, grant recipients must substantially complete 
projects supported by this program no later than two years, and 
projects must be fully completed no later than three years, following 
the date of issuance of the grant award.\30\
---------------------------------------------------------------------------

    \29\ Id. Sec.  6001(d)(2), 123 Stat. at 513.
    \30\ Id. Sec.  6001(d)(3), 123 Stat. at 513.
---------------------------------------------------------------------------

7. Type of Funding Instrument
    The funding instrument for BTOP will be a grant.

V. Eligibility Information for BIP and BTOP

A. In General

    Applicants must satisfy the following eligibility requirements to 
qualify for funding.

B. Eligible Entities

1. Applicant Organization
    The following entities are eligible to apply for assistance:
    a. States, local governments, or any agency, subdivision, 
instrumentality, or political subdivision thereof;
    b. The District of Columbia;
    c. A territory or possession of the United States;
    d. An Indian tribe (as defined in section 4 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b));
    e. A native Hawaiian organization;
    f. A non-profit foundation, a non-profit corporation, a non-profit 
institution, or a non-profit association;
    g. Other non-profit entities;
    h. For-profit corporations;
    i. Limited liability companies; and
    j. Cooperative or mutual organizations.
2. BTOP Public Interest Finding
    Section 6001(e)(1)(C) of the Recovery Act authorizes the Assistant 
Secretary to find by rule that it is in the public interest for any 
entity not otherwise encompassed by section 6001(e)(1) to be eligible 
for a BTOP grant to the extent that such finding will promote the 
purposes of BTOP in a technologically neutral manner. Through this 
NOFA, the Assistant Secretary has found it to be in the public interest 
to permit for-profit corporations and non-profit entities (not 
otherwise encompassed by section 6001(e)(1)(B)) that are willing to 
promote the goals of the Recovery Act and comply with the statutory 
requirements of BTOP to be eligible for a grant. By adopting this broad 
approach, the Assistant Secretary intends to invite a diverse group of 
applicants to participate in BTOP and to expand broadband capabilities 
in a technologically neutral manner.\31\
---------------------------------------------------------------------------

    \31\ Id. Sec.  6001(e)(1)(C), 123 Stat. at 513.
---------------------------------------------------------------------------

C. Application Eligibility Factors

    The following eligibility factors establish basic requirements that 
all applicants must comply with in order to be eligible for an award. 
Applicants failing to comply with these requirements will not have 
their applications considered. This section lists eligibility factors 
(a) shared by BIP and all three BTOP project categories; (b) shared by 
BIP and BTOP Broadband Infrastructure projects; (c) that apply only to 
BIP projects; and (d) that apply only to the three BTOP project 
categories.
1. Eligibility Factors Common to All BIP and BTOP Applicants
a. Fully Completed Application
    Applicants must submit a complete application and provide all 
supporting documentation required for the application.
b. Timely Completion
    A project is eligible only if the application demonstrates that the 
project can be substantially completed within two years of the date of 
issuance of the grant, loan, or loan/grant award and finished within 
three years of the date of the award. For BIP, a project is considered 
``substantially complete'' when an awardee has received 67 percent of 
its award funds. For BTOP, a project is considered ``substantially 
complete'' when the awardee has met 67 percent of the project 
milestones and received 67 percent of its award funds.
2. Additional Factors Applicable to BIP and BTOP Broadband 
Infrastructure Applicants
a. Broadband Service
    All Broadband Infrastructure applicants must propose to offer 
service meeting the definition of Broadband as defined herein.
b. Technical Feasibility
    Only projects that RUS and NTIA determine to be technically 
feasible will be eligible for an award under this NOFA. At minimum, 
applicants will be required to submit a system design and project 
timeline, certified by a professional engineer, for any project 
requesting funds over $1 million.
c. Nondiscrimination and Interconnection
    All Broadband Infrastructure (both BIP and BTOP) applicants, must 
commit to the following Nondiscrimination and Interconnection 
Obligations: i. Adhere to the principles contained in the FCC's 
Internet Policy Statement (FCC 05-151, adopted August 5, 2005); ii. not 
favor

[[Page 33111]]

any lawful Internet applications and content over others; iii. display 
any network management policies in a prominent location on the service 
provider's web page and provide notice to customers of changes to these 
policies (awardees must describe any business practices or technical 
mechanisms they employ, other than standard best efforts Internet 
delivery, to allocate capacity; differentiate among applications, 
providers, or sources; limit usage; and manage illegal or harmful 
content); iv. connect to the public Internet directly or indirectly, 
such that the project is not an entirely private closed network; and v. 
offer interconnection, where technically feasible without exceeding 
current or reasonably anticipated capacity limitations, on reasonable 
rates and terms to be negotiated with requesting parties. This includes 
both the ability to connect to the public Internet and physical 
interconnection for the exchange of traffic. Applicants must disclose 
their proposed interconnection, nondiscrimination, and network 
management practices with the application.
    All these requirements shall be subject to the needs of law 
enforcement and reasonable network management. Thus, awardees may 
employ generally accepted technical measures to provide acceptable 
service levels to all customers, such as caching and application-
neutral bandwidth allocation, as well as measures to address spam, 
denial of service attacks, illegal content, and other harmful 
activities. In addition to providing the required connection to the 
Internet, awardees may offer managed services, such as telemedicine, 
public safety communications, and distance learning, which use private 
network connections for enhanced quality of service, rather than 
traversing the public Internet.
    An awardee may satisfy the requirement for interconnection by 
negotiating in good faith with all parties making a bona fide request. 
The awardee and requesting party may negotiate terms such as business 
arrangements, capacity limits, financial terms, and technical 
conditions for interconnection. If the awardee and requesting party 
cannot reach agreement, they may voluntarily seek an interpretation by 
the FCC of any FCC rules implicated in the dispute. If an agreement 
cannot be reached within 90 days, the party requesting interconnection 
may notify RUS or NTIA in writing of the failure to reach satisfactory 
terms with the awardee. The 90-day limit is to encourage the parties to 
resolve differences through negotiation.
    With respect to non-discrimination, those who believe an awardee 
has failed to meet the non-discrimination obligations should first seek 
action at the FCC of any FCC rules implicated in the dispute. If the 
FCC chooses to take no action, those seeking recourse may notify RUS or 
NTIA in writing about the alleged failure to adhere to commitments of 
the award.
    Entities that successfully reach an agreement to interconnect with 
a system funded under BIP may not use that interconnection agreement to 
provide services that duplicate services provided by projects funded by 
outstanding telecommunications loans made under the RE Act. Further, 
interconnection may not result in a BIP-funded facility being used for 
ineligible purposes under the Recovery Act.
    These conditions will apply for the life of the awardee's 
facilities used in the project and not to any existing network 
arrangements. The conditions apply to any contractors or subcontractors 
of such awardees employed to deploy or operate the network facilities 
for the infrastructure project. Recipients that fail to accept or 
comply with the terms listed above may be considered in default or 
breach of their loan or grant agreements. RUS and NTIA may exercise all 
available remedies to cure the default.
d. Last Mile Coverage Obligation
    An applicant for a Last Mile Broadband Infrastructure project must 
identify the census block(s) selected for the project and provide 
documentation supporting the applicant's determination that the 
proposed funded service area is either unserved or underserved. There 
is a presumption that the applicant will provide service to the entire 
territory of each census block included in the proposed funded service 
area, unless the applicant files a waiver and provides a reasoned 
explanation as to why providing coverage for an entire census block is 
infeasible. Applicants may be permitted to serve less than an entire 
census block under certain conditions. For example, an applicant might 
request to be relieved of this requirement if the census block exceeds 
100 square miles or more or is larger than the applicant's authorized 
operating territory, e.g., it splits a rural incumbent local exchange 
carrier's (ILEC's) study area or exceeds the boundaries of a wireless 
carrier's licensed territory.
3. Additional Factors for BIP
a. Eligible Service Area
    A project is eligible only if the applicant demonstrates that at 
least 75 percent of the proposed funded service area qualifies as a 
rural area without sufficient access to broadband service to facilitate 
rural economic development.\32\ For the purposes of this NOFA, RUS has 
determined that ``without sufficient broadband access'' shall mean 
without access to broadband, as defined herein. Furthermore, RUS has 
determined that only rural areas which are unserved or underserved, as 
defined herein, shall qualify as ``areas without sufficient access to 
broadband service.'' Therefore, to qualify for BIP funding, projects 
must serve at least 75 percent unserved or underserved rural areas.
---------------------------------------------------------------------------

    \32\ See id. div. A, tit. I, 123 Stat. at 118.
---------------------------------------------------------------------------

b. Overlapping Service Areas
    RUS will not fund more than one project to serve any given 
geographic area. If more than one application would serve any 
overlapping geographic area, the application with the highest score 
will be funded; other applications for the same area will be rejected 
in their entirety unless RUS, in its discretion, determines that the 
extent of the overlap is de minimis.
c. Fully Funded
    A project is eligible only if, after approval of the grant, loan, 
or loan/grant combination, all project costs can be fully funded. To 
demonstrate this, applicants must include with the application evidence 
of all funding, other than the RUS award, necessary to support the 
project, such as bank account statements or firm letters of commitment 
from equity participants or other lenders documenting the timely 
availability of funds.
d. Financial Feasibility and Sustainability
    Only projects that RUS determines to be financially feasible and/or 
sustainable will be eligible for an award under this NOFA.
    Loans: A project funded by a loan or loan/grant combination is 
financially feasible when the applicant is able to generate sufficient 
revenues to cover its expenses, has sufficient cash flow to service its 
debts and obligations as they come due, and meet the minimum Times 
Interest Earned Ratio (TIER) requirement of one by the end of the 
forecast period, as determined by RUS.
    Grants: A project funded by a grant is financially sustainable when 
the applicant is able to generate a minimum

[[Page 33112]]

current ratio of one by the end of the forecast period and can 
demonstrate a positive cash balance for each year of the forecast 
period.
4. Additional Factors for BTOP
a. Conformity With Statutory Purposes
    A project is eligible only if it advances at least one of the 
statutory purposes for BTOP.\33\
---------------------------------------------------------------------------

    \33\ See id. Sec.  6001(b), 123 Stat. at 512-13.
---------------------------------------------------------------------------

b. Cost Sharing/Matching
    Awardees under BTOP will be required to provide matching funds of 
at least 20 percent toward the total eligible project cost. Applicants 
must document their capacity to provide matching funds. NTIA will 
provide up to 80 percent of total eligible project costs, unless the 
applicant petitions the Assistant Secretary for a waiver of the 
matching requirement and that waiver is granted by the Assistant 
Secretary based on the applicant's demonstration of financial need.\34\ 
In requesting such a waiver, an applicant should fully explain and 
document its inability to provide the required 20 percent share of the 
cost of its proposed project. An applicant should submit complete 
financial documentation supporting its need for a waiver of the 
matching requirement. These documents should include the applicant's 
assets, liabilities, operating expenses and revenues from any existing 
operations, and any other documents that will demonstrate financial 
need and sustainability, including such items as a denial of funding 
from a public or private lending institution. The Assistant Secretary 
will evaluate the information provided in support of the petition and 
may increase the federal share if financial need is demonstrated.
---------------------------------------------------------------------------

    \34\ See id. Sec.  6001(f), 123 Stat. at 514.
---------------------------------------------------------------------------

    Generally, federal funds may not be used as matching funds except 
as provided by federal statute.\35\ In-kind contributions, including 
third party in-kind contributions, are non-cash donations to a project 
that may count toward satisfying the non-federal matching requirement 
of a project's total budget. In-kind contributions must be allowable 
project expenses. Such contributions may be accepted as part of an 
applicant's matching when such contributions meet certain criteria.\36\
---------------------------------------------------------------------------

    \35\ See Uniform Administrative Requirements for Grants and 
Agreements with Institutions of Higher Education, Hospitals, Other 
Non-profit, and Commercial Organizations, 15 CFR Sec.  14.23(a)(5); 
see also Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments, 24 CFR Sec.  
24.24(b)(1).
    \36\ See 15 CFR Sec. Sec.  14.23(a), 24.24(a).
---------------------------------------------------------------------------

    Applications that propose to provide matching funds of greater than 
20 percent and that are all cash will be given additional favorable 
consideration in step one of the application review process.
c. Demonstration That Project Could Not Be Implemented but for Federal 
Grant Assistance
    Grant applicants must provide documentation that the project would 
not have been implemented during the grant period without federal grant 
assistance. This documentation may consist of, but is not limited to, 
such items as a denial of funding from a public or private lending 
institution, denial of a funding request from RUS for a loan or loan/
grant combination, a current fiscal year budget that shows the lack of 
available revenue options for funding the project, or a business case 
that demonstrates that the project would not be economically feasible 
without grant financing.
d. Reasonableness of Project Budget
    A project will only be eligible if it demonstrates that its budget 
is appropriate to the proposed technical and programmatic solutions, 
its costs are reasonable and eligible consistent with the principles 
outlined in section V.D below, and that the allocation of funds will be 
sufficient to complete the tasks outlined in the project plan.

D. Eligible Cost Purposes

1. General
    Award funds must be used only to pay for eligible costs. Eligible 
costs are consistent with the cost principles identified in the 
applicable OMB circulars \37\ and in the grant or the loan/grant 
program's authorizing legislation. In addition, costs must be 
reasonable, allocable, necessary to the project, and comply with the 
funding statute requirements. Any application that proposes to use any 
portion of the award funds for any ineligible cost will be rejected.
---------------------------------------------------------------------------

    \37\ For example there is a set of federal principles for 
determining eligible or allowable costs. Allowability of costs will 
be determined in accordance with the cost principles applicable to 
the entity incurring the costs. Thus, allowability of costs incurred 
by state, local or federally-recognized Indian tribal governments is 
determined in accordance with the provisions of OMB Circular A-87, 
``Cost Principles for State, Local and Indian Tribal Governments.'' 
The allowability of costs incurred by non-profit organizations is 
determined in accordance with the provisions of OMB Circular A-122, 
``Cost Principles for Non-Profit Organizations.'' The allowability 
of costs incurred by institutions of higher education is determined 
in accordance with the provisions of OMB Circular A-21, ``Cost 
Principles for Educational Institutions.'' The allowability of costs 
incurred by hospitals is determined in accordance with the 
provisions of Appendix E of 45 CFR pt. 74, ``Principles for 
Determining Costs Applicable to Research and Development under 
Grants and Contracts with Hospitals.'' The allowability of costs 
incurred by commercial organizations and those non-profit 
organizations listed in Attachment C to Circular A-122 is determined 
in accordance with the provisions of the Federal Acquisition 
Regulation (FAR) at 48 CFR pt. 31. See 15 CFR 14.27, 24.22 
(governing the Department of Commerce's implementation of OMB 
requirements).
---------------------------------------------------------------------------

2. Eligible and Ineligible Costs for BIP and BTOP Infrastructure 
Projects
a. Eligible Infrastructure Award Expenses
    Award funds may be used to pay for the following expenses:
    i. To fund the construction or improvement of all facilities 
required to provide broadband service, and for BIP only, including 
facilities required for providing other services over the same 
facilities;
    ii. To fund the cost of leasing facilities required to provide 
broadband service if such lease qualifies as a capital lease under 
GAAP. Award funds may be used to fund the cost of the capital lease for 
no more than the first five years after the date of the first advance 
of award funds;
    iii. To fund reasonable pre-application expenses in an amount not 
to exceed five percent of the award. Pre-application expenses may be 
reimbursed if they are incurred after the publication date of this NOFA 
and prior to the date on which the application is submitted to RUS or 
NTIA; and
    iv. For BTOP only undertaking such other projects and activities as 
the Assistant Secretary finds to be consistent with the purposes for 
which the program is established.
b. Ineligible Award Expenses
    Award funds may not be used for any of the following purposes:
    i. To fund operating expenses of the project, including fixed and 
recurring costs of a project;
    ii. To fund costs incurred prior to the date on which the 
application is submitted, with the exception of eligible pre-
application expenses;
    iii. To fund an acquisition, including the acquisition of the stock 
of an affiliate, or the purchase or acquisition of any facilities or 
equipment of an affiliate;
    iv. To fund the purchase or lease of any vehicle other than those 
used primarily in construction or system improvements;
    v. To fund broadband facilities leased under the terms of an 
operating lease;
    vi. To fund merger or consolidation of entities; and

[[Page 33113]]

    vii. To fund costs incurred in acquiring spectrum as part of an FCC 
auction or in a secondary market acquisition.
3. Eligible and Ineligible Costs for Public Computer Centers and 
Sustainable Broadband Adoption
a. General
    Grantees for BTOP funds under these two project categories are 
required to show how such funding serves the stated purposes of: i. 
Providing broadband education, awareness, training, access, equipment, 
and support to community anchor institutions (e.g., schools, libraries, 
medical and healthcare providers, community colleges and other 
institutions of higher education, and other community support 
organizations), or organizations and agencies serving vulnerable 
populations (e.g., low-income, unemployed, aged), or job-creating 
strategic facilities located in state- or federally-designated economic 
development areas; ii. improving access to, and use of, broadband 
service by public safety agencies; and iii. stimulating the demand for 
broadband, economic growth, and job creation.
b. Eligible Costs for Public Computer Centers
    Grantees may use BTOP funding under this project category to expand 
computer center capacity by:
    i. Acquiring broadband-related equipment, instrumentation, 
networking capability, hardware and software, and digital network 
technology for broadband services;
    ii. Developing and providing training, education, support and 
awareness programs or web-based resources;
    iii. Facilitating access to broadband services, including, but not 
limited to, making public computer centers accessible to the disabled; 
and
    iv. Undertaking such other projects and activities as the Assistant 
Secretary finds to be consistent with the purposes for which the 
program is established.
c. Eligible Costs for Sustainable Broadband Adoption
    Grantees may use BTOP funding under this project category to 
encourage sustainable adoption of broadband services by:
    i. Acquiring broadband-related equipment, hardware and software, 
and digital network technology for broadband services;
    ii. Developing and providing training, education, support and 
awareness programs or web-based content;
    iii. Conducting broadband-related public education, outreach, 
support and awareness campaigns;
    iv. Implementing innovative programs to facilitate greater access 
to broadband service, devices, and equipment; and
    v. Undertaking such other projects and activities as the Assistant 
Secretary finds to be consistent with the purposes for which the 
program is established.
d. Ineligible Costs for Public Computer Centers and Sustainable 
Broadband Adoption
    BTOP grant funds may not be used to fund purchases that are not 
used predominantly for the provision of broadband education, awareness, 
training, access, equipment and support.

E. Use of Program Income

    Grantees are required to account for any program income directly 
generated by projects financed in whole or in part with federal funds. 
Given the Recovery Act's objectives to spur job creation and stimulate 
long-term economic growth and opportunity, projects funded by BIP and 
BTOP grants are expected to convincingly demonstrate the ability to be 
sustained beyond the funding period. While grant funds are intended to 
cover the capital costs of a project as part of the Recovery Act's 
effort to stimulate the economy, grant recipients for all grant 
programs are expected to present projects that will sustain long-term 
growth and viability.
    For purposes of BIP and BTOP, any program income generated by a 
proposed project during the grant period shall be retained by the grant 
recipient and shall be added to the funds committed to the project by 
RUS or NTIA and the recipient. The grant recipient should use program 
income to further eligible project objectives, including reinvestment 
in project facilities. Program income means gross income earned by the 
recipient that is either directly generated by a supported activity, or 
earned as a result of the award during the funding period. Grant 
recipients shall have no obligation to the federal government regarding 
program income earned after the end of the project period. However, the 
federal government retains an interest in property in the event that it 
is sold, consistent with the guidance outlined in section IX of this 
NOFA.\38\
---------------------------------------------------------------------------

    \38\ 2 CFR 215.24; 15 CFR 14.24, 24.25.
---------------------------------------------------------------------------

VI. Application and Submission Information

A. Request for Application Package

    Complete application packages, including required federal forms and 
instructions, will be available at http://www.broadbandusa.gov. 
Additional information for BIP and BTOP can be found in the Application 
Guidelines at http://www.broadbandusa.gov. This Web site will be 
updated regularly.

B. Registration

1. DUNS Number
    All applicants must supply a Dun and Bradstreet Data Universal 
Numbering System (DUNS) number. Applicants can receive a DUNS number at 
no cost by calling the dedicated toll-free DUNS number request line at 
1-866-705-5711 or via the Internet at http://www.dunandbradstreet.com.
2. Central Contractor Registration (CCR)
    All applicants must provide a CCR (CAGE) number evidencing current 
registration in the Central Contractor Registration (CCR) database. If 
the applicant does not have a current CCR (CAGE) number, the applicant 
must register in the CCR system available at http://www.ccr.gov/StartRegistration.aspx.

C. Choosing the Proper Agency and Category for an Application

1. Broadband Infrastructure
a. Choosing BIP or BTOP Broadband Infrastructure
    i. Applications for Rural Areas. All applications to fund broadband 
infrastructure in proposed funded service areas which are at least 75 
percent rural are required to be submitted to RUS for consideration 
under BIP. If such applicants also choose to be considered for BTOP 
funding, they must complete the additional elements required of BTOP 
infrastructure applicants. RUS will consider all applications for 
projects in proposed funded service areas which are at least 75 percent 
rural in accordance with the BIP procedures outlined in this NOFA. If 
the applicant also chooses to be considered under BTOP, NTIA will 
review these applications using its own objective evaluation criteria 
and in accordance with BTOP procedures outlined in this NOFA. NTIA may 
make awards with respect to such applications NTIA determines to be 
meritorious after RUS has reviewed the application and determined not 
to fund it. RUS and NTIA have adopted these application procedures to 
reflect the fact that Congress, in the Recovery Act, intended that RUS 
focus its activities on rural areas and mandated that NTIA funding 
could not be applied in the same area funded by RUS under the Recovery 
Act.

[[Page 33114]]

    ii. Applications for All Other Areas. All applications to fund 
broadband infrastructure projects in proposed funded service areas that 
are less than 75 percent rural must be submitted to NTIA for 
consideration under BTOP. Submissions to BIP of such applications will 
be rejected.
b. BIP Broadband Infrastructure Categories
i. Last Mile Remote Area
    Applications for Last Mile Remote Area projects must predominantly 
provide broadband directly to the premise or to end users within 
completely remote areas, as defined herein. The BIP Program will 
consider applications for grant funds up to 100 percent. For grants 
receiving greater than 80 percent of eligible costs, the Administrator 
must determine that the awardee has a specific financial need that 
justifies funding greater than 80 percent.
ii. Last Mile Non-Remote Projects
    Applications for Last Mile Non-Remote Area projects must 
predominantly provide broadband directly to the premise or to end users 
that are not exclusively within remote areas, as defined herein. Last 
Mile Non-Remote Area projects may encompass both remote and non-remote 
areas, and will be awarded scoring points for remote areas within the 
application. Only those applications for loans or loan/grant 
combinations whose total proposed funded service area contains 75 
percent or more unserved or underserved rural areas, as defined herein, 
will be considered for BIP funding.
iii. Broadband Infrastructure Middle Mile Projects
    Applications for Middle Mile projects must connect at least two 
points without predominantly providing broadband service to the premise 
or end users, and must be capable of bringing broadband service to 
eligible service areas. The BIP program will consider only those 
applications for loans and loan/grant combinations whose total proposed 
funded service area benefits at least 75 percent or more unserved or 
underserved rural areas, as defined herein.
c. BTOP Broadband Infrastructure Categories
i. Last Mile
    For the purposes of BTOP grant funds, applications for Last Mile 
projects must be for unserved or underserved areas and have the 
predominant purpose to provide broadband service to end users or end-
user devices (including homes, businesses, schools, libraries, medical 
and health care providers, community support organizations, public 
safety entities, vulnerable populations and other institutions and 
individuals). Highly responsive Last Mile projects should be 
technically feasible, sustainable, and scalable, and address BTOP's 
priority needs, including offering substantial economic, educational, 
health care, and public safety benefits relative to the costs of 
providing service.
iii. Middle Mile
    For the purposes of BTOP grant funds, applications for Middle Mile 
projects must be for unserved or underserved areas and have a 
predominant purpose other than providing broadband service to end users 
or to end-user devices and may include interoffice transport, backhaul, 
Internet connectivity, or special access. Highly responsive Middle Mile 
projects should be technically feasible, sustainable, and scalable and 
offer substantial benefits to unserved and underserved areas relative 
to the costs of providing service.
2. BTOP--Public Computer Centers
    For the purposes of BTOP grant funds, applicants requesting a 
Public Computer Center grant must have a project that provides 
broadband access to the general public or a specific vulnerable 
population, such as low-income, unemployed, aged, children, minorities 
and people with disabilities. Projects must create or expand a public 
computer center meeting a specific public need for broadband service, 
including but not limited to education, employment, economic 
development, and enhanced service for health-care delivery, children, 
and vulnerable populations. As described below, NTIA will consider 
information related to the demographics, size and scope of the 
populations to be served, as well as the capacity of the proposed 
centers.
3. BTOP--Sustainable Broadband Adoption
    Applications for Sustainable Broadband Adoption projects should 
demonstrate a sustainable increase in demand for and subscribership to 
broadband services. Projects should meet a specific public need for 
broadband service, including, but not limited to, education, 
employment, economic development, and enhanced service for health-care 
delivery, children, and vulnerable populations. Projects should 
describe the barriers to adoption in a given area, especially among 
vulnerable populations, and propose an innovative and persuasive 
solution to encourage adoption. Applicants might show how variations on 
one or more proven demand stimulation strategy--such as awareness-
building, development of relevant content, and demand aggregation--
would promote sustainable adoption.

D. Contents of the Application

1. BIP and BTOP Broadband Infrastructure Project Applications
a. Requirements for Step One of the Application Process
    A complete application will include the following:
    i. The identity of the applicant and general applicant and project 
information including:
    (1) A description of the project that will be made public 
consistent with the requirements of the Recovery Act;
    (2) The Congressional Districts affected by the project;
    (3) The estimated dollar amount of the funding request;
    ii. Verification that the application meets certain eligibility 
factors, including submission of a complete application with all 
supplemental documentation, commitment to substantial completion of the 
project within two years and project completion within three years of 
the award date, demonstration that the project is technically feasible, 
that the applicant will provide broadband service meeting the 
definition in this NOFA, that the applicant agrees to comply with the 
nondiscrimination and interconnection obligations in this NOFA, and 
that the applicant agrees to comply with the last mile coverage 
obligations in this NOFA; for BIP only, that at least 75% of the 
proposed funded service area is a rural area, that the project will be 
fully funded, and that the project is financially feasible; and for 
BTOP only, demonstration that the project advances at least one of 
BTOP's five statutory purposes, commitment to or a waiver for the cost 
matching requirement, demonstration that a project could not be 
completed in the grant period but for federal funding, and that the 
budget is reasonable and all costs are eligible;
    iii. An executive summary of the project, including but not limited 
to the opportunity the proposed system seeks to address; a description 
of the proposed funded service area; number of households and 
businesses passed; number of community anchor institutions, public 
safety entities and critical community organizations to be passed and/
or involved in the project;

[[Page 33115]]

proposed service offerings; how non-discrimination and interconnection 
requirements will be met; the type of broadband system to be deployed; 
qualifications of the applicant; overall infrastructure cost of the 
broadband system; subscriber projections; and the number of jobs the 
project is expected to create or save;
    iv. A description of the proposed funded service area, including: 
(1) A map; (2) data describing the geography and demographics of the 
proposed funded service area, including information as to whether the 
proposed funded service area is unserved or underserved; (3) names of 
the census designated communities and identification of areas not 
within a census designated community within the proposed funded service 
area; (4) information as to whether the communities and areas 
identified in clause (3) are rural or non-rural, remote and unserved, 
underserved or served; (5) the methodology for making the above 
classifications; (6) whether the applicant is seeking a waiver from 
providing less than 100% coverage of any census block; and; (7) for 
middle mile projects, identification of the last mile areas to be 
served;
    v. A description of the proposed service offerings, and the 
associated pricing plan, that the applicant proposes to offer, as well 
as the advertised prices of service offerings by competitors in the 
same area; a description of the applicant's nondiscrimination, 
interconnection, and network management plans; an explanation of why 
the proposed service offerings are affordable; and for BTOP only, an 
estimate of the cost of the project per household;
    vi. The technology type; a description of the system design used to 
deliver the broadband service; a network diagram, which must be 
certified by a professional engineer if the funding request exceeds 
$1,000,000; whether the applicant is seeking a waiver of the Buy 
America provision; and whether the project allows more than one 
provider to serve end users;
    vii. A timeline including key milestones for implementation of the 
project, including a construction schedule, certified by a professional 
engineer if the funding request exceeds $1,000,000, which identifies 
potential challenges and establishes the viability of the project 
timeline and associated milestones for build-out to the census blocks, 
households, businesses, community anchor institutions, and public 
safety entities identified in the proposal; a list of all required 
licenses and regulatory approvals needed for the proposed project; and 
how much the applicant will rely on contractors or vendors to deploy 
the network facilities;
    viii. Resumes of key management personnel, a description of the 
organization's readiness to manage a broadband services network, and an 
organizational chart showing any parent organizations and/or 
subsidiaries and affiliates;
    ix. A legal opinion (as set forth in the application) that: (1) 
Addresses the applicant's ability to enter into the award documents; 
(2) describes all pending litigation matters; and (3) for loan and 
loan/grant combinations, addresses the applicant's ability to pledge 
security as required by the award documents;
    x. Partnerships with public, non-profit, and private sector groups 
and collaboration with other state and federal development programs 
including other Recovery Act programs;
    xi. An itemized budget of the infrastructure costs of the proposed 
project, including if applicable, the ratio of loans to grants, and any 
other source of outside funding, especially any other Recovery Act 
funds under other federal programs, and an explanation of the 
reasonableness of the unit price and total number of units required for 
the project;
    xii. Pro Forma financial analysis related to the sustainability of 
the project, including subscriber estimates and proposed service 
offerings in addition to broadband Internet access; annual financial 
projections including balance sheets, income statements, and cash flow 
statements and supporting assumptions for a five-year forecast period 
as applicable; and a list of committed sources of capital funding;
    xiii. Historical financial statements, Certified Public Accountant 
(CPA) audits if applicable, for the previous two calendar years;
    xiv. Certifications required in the application;
    xv. For BIP applicants only:
    (1) A self-scoring sheet, analyzing the objective scoring criteria 
set forth in this NOFA;
    (2) The pricing package being offered to critical community 
facilities, if any; and
    (3) Evidence that the applicant is a socially and economically 
disadvantaged small business concern (SDB) as defined under section 
8(a) of the SBA.
    xvi. For BTOP applicants only:
    (1) A description of how the applicant will advance the objectives 
of the Recovery Act, as well as the specific objectives of BTOP, (a) to 
provide access to broadband service to consumers residing in unserved 
areas of the country; (b) to provide improved access to broadband 
service to consumers residing in underserved areas of the country; (c) 
to provide broadband access, education, awareness, training, equipment, 
and support to community anchor institutions (e.g., schools, libraries, 
medical facilities), or organizations and agencies serving vulnerable 
populations (e.g., low-income, unemployed, aged), or job-creating 
strategic facilities located in state or federally designated economic 
development areas; (d) to improve access to, and use of, broadband 
service by public safety agencies; and (e) to stimulate the demand for 
broadband, economic growth, and job creation;
    (2) A demonstration of need for grant funding, including 
documentation demonstrating that a project would be unfeasible but for 
federal assistance;
    (3) A description of how the applicant will enhance services for 
health care delivery, education, and children to the greatest 
population of users in the area;
    (4) Additional verification related to the non-discrimination and 
interconnection obligations set forth in this NOFA;
    (5) The percentage of matching funds the applicant will contribute 
to the project, and its percentage of the total cost, as well as the 
specific amounts that are in cash or in-kind;
    (6) Whether the applicant receives any federal support for non-
recurring costs in the proposed funded service area; and
    (7) To the extent applicable, evidence of collaboration with any 
socially and economically disadvantaged small business concern (SDB) as 
defined under section 8(a) of the SBA, that may include a sub-awardee, 
contractor, subcontractor, or vendor, and the source and amount of any 
federal or state funding, including Universal Service Fund funds, that 
applicant has received, or requested, for the activities or projects to 
which the application relates.
b. Verification Filing Requirements for Step Two of the Application 
Process
    As discussed above, those applications that are considered to be 
most highly qualified (i.e., receiving the highest scores), will 
advance to the second step of the review process. Specifically, in the 
``due diligence'' phase, applicants will be asked to submit additional 
information, as appropriate, to further substantiate the 
representations made in their application. Although this ``due 
diligence'' phase applies to all three categories of projects--
Broadband

[[Page 33116]]

Infrastructure, Public Computer Center, and Sustainable Adoption--it is 
most applicable to Broadband Infrastructure Projects. This phase will 
be announced no earlier than September 14, 2009. The following 
information must then be submitted to the agencies online at http://www.broadbandusa.gov by October 15, 2009, or, alternatively, 30 days 
after the applicant has received a request from RUS or NTIA to provide 
such information, whichever is later.
    i. A list of all its outstanding and contingent obligations, 
including copies of existing notes, loan and security agreements, and 
guarantees;
    ii. A detailed description of working capital requirements and the 
source of these funds;
    iii. A detailed description of the proposed technology that will be 
used to provide service at the proposed broadband speed. This 
description must clearly demonstrate that all households and businesses 
in the proposed funded service area will be offered service at the 
proposed broadband speed;
    iv. A detailed construction build-out schedule that includes a 
description of the necessary work force, a timeline demonstrating 
project completion within the required timeframe, a depreciation 
schedule for the proposed facilities;
    v. A completed Environmental Questionnaire, other documentation 
requests, and required environmental authorizations and permits, 
including those required by the National Environmental Policy Act of 
1969, as amended (42 U.S.C. 4321 et seq.) (NEPA), the National Historic 
Preservation Act of 1966, as amended (16 U.S.C. 470 et seq.) (NHPA), 
and the Endangered Species Act of 1973, as amended (16 U.S.C. 1534 et 
seq.) (ESA) as applicable;
    vi. For purposes of the step two due diligence verification 
process, applicants will need to be prepared to provide any of the 
underlying documentation that is referenced in the application, as 
appropriate; and
    vii. For BIP only, a description of measurable service metrics and 
target service level objectives (SLOs) (e.g., the speed with which new 
service will be established, service availability, and response time 
for reports of system failure at a residence) that will be provided to 
the customer, and a description of the approach and methodology for 
monitoring ongoing service delivery and service quality for the 
services being employed.
2. Public Computer Centers Applications
    Applications for Public Computer Center projects must contain the 
following information:
    a. The identity of the applicant and general applicant and project 
information including:
    i. A descriptive title of the project that will be made public 
consistent with the requirements of the Recovery Act,
    ii. The Congressional Districts affected by the project,
    iii. The dollar amount of the funding request;
    b. Verification that the application meets certain eligibility 
factors, including submission of a complete application with all 
supplemental documentation, commitment to substantial completion of the 
project within two years and project completion within three years of 
the award date, demonstration that the project advances at least one of 
BTOP's five statutory purposes, commitment to or a waiver for the cost 
matching requirement, demonstration that a project could not be 
completed in the grant period but for federal funding, demonstration 
that the project is technically feasible, and that the budget is 
reasonable and all costs are eligible;
    c. An executive summary of the project, including the problem or 
need the project addresses and the approach to addressing the need; the 
area to be served, population and demographics of the target area, and 
estimated number of potential users of the public computer center(s); 
qualifications of the applicant; jobs to be created or saved; and 
overall cost of the project;
    d. A description of the project purpose, including the significance 
of the problem to be addressed and the degree to which the proposed 
solution effectively addresses the problem and could be replicated by 
other organizations; the degree to which the problem and proposed 
solution advance at least one of BTOP's five statutory purposes; and 
whether and how the project incorporates more than one BTOP program 
category or BTOP statutory purpose;
    e. A description of any collaboration with Recovery Act or other 
state or federal development programs that leverage the impact of the 
proposed project;
    f. A description of how the program would enhance service for 
health care delivery, education, or children;
    g. Evidence of collaboration with any SDB as defined by section 
8(a) of the SBA, that may include a sub-awardee, contractor, 
subcontractor, or vendor;
    h. The capacity of the proposed public computer center(s) and areas 
and populations to be served, including whether the facility will be 
available to the general public or specific populations, whether the 
center(s) charges membership fees and if so how these charges are 
consistent with the public interest, any restrictions of the use of the 
center(s), how the center will be accessible to persons with 
disabilities, the locations and hours of the center(s), current and 
proposed number of broadband workstations, current and proposed speed 
of the center(s) broadband connection, the size and scope of the target 
population and the populations to be served by the center(s), the 
outreach strategy for the center(s), the equipment and software that 
will be provided, and the training and educational programs that will 
be offered;
    i. A summary as to the viability of the project, including the 
overall technology strategy to be deployed by the project; 
qualifications of the organization and management team, including a 
description of organizational readiness and an organizational chart; a 
list of community organizations, partners, vendors, or contributors of 
in-kind resources involved in the project and whether any of those 
involved entities are socially or economically disadvantaged partners; 
a project timeline that established key milestones for implementation 
of the project as well as potential challenges that could pose delays; 
a list of needed licensing and regulatory approvals; and a legal 
opinion addressing the applicant's ability to enter into the award 
agreement;
    j. Proposed budget and sustainability information from the 
applicant including a narrative explaining the project budget, an 
explanation of why the proposed costs are reasonable, demonstration 
that the project could not have been undertaken during the grant period 
but for federal assistance, organization financial statements for the 
last two years, explanation of how a project will become self-
sustaining, description of the planned matching funds for the project 
or a waiver, as applicable, whether the project is receiving or has 
applied for federal support for non-recurring costs, disclosure of 
other federal or state funding, and whether the applicant is seeking a 
waiver of the Buy American provision; and
    k. Completion of an environmental checklist and applicable 
certifications.

[[Page 33117]]

3. Sustainable Broadband Adoption Applications
    Applications for Sustainable Broadband Adoption projects must 
contain the following information:
    a. The identity of the applicant and general applicant and project 
information including:
    i. A descriptive title of the project that will be made public 
consistent with the requirements of the Recovery Act,
    ii. The Congressional Districts affected by the project,
    iii. The dollar amount of the funding request;
    b. Verification that the application meets certain eligibility 
factors, including submission of a complete application with all 
supplemental documentation, commitment to substantial completion of the 
project within two years and project completion within three years of 
the award date, demonstration that the project advances at least one of 
BTOP's five statutory purposes, commitment to or a waiver for the cost 
matching requirement, demonstration that a project could not be 
completed in the grant period but for federal funding, demonstration 
that the project is technically feasible, and that the budget is 
reasonable and all costs are eligible;
    c. An executive summary of the project, including the problem or 
need the project addresses and the approach to addressing the need, and 
how that approach is innovative; the area to be served, population and 
demographics of the target area, and estimated number of potential 
broadband subscribers the project will reach; qualifications of the 
applicant; jobs to be created or saved; and overall cost of the 
project;
    d. A description of the project purpose, including the significance 
of the problem to be addressed and the degree to which the proposed 
solution effectively addresses the problem and could be replicated by 
other organizations; the degree to which the problem and proposed 
solution advance at least one of BTOP's five statutory purposes; and 
whether and how the project incorporates more than one BTOP program 
category or BTOP statutory purpose;
    e. A description of any collaboration with Recovery Act or other 
state or federal development programs that leverage the impact of the 
proposed project;
    f. A description of how the program would enhance service for 
health care delivery, education, or children;
    g. Evidence of collaboration with any SDB as defined under section 
8(a) of the SBA, that may include a sub-awardee, contractor, 
subcontractor, or vendor;
    h. A description of the project benefits, including how the 
approach to solve the identified problem is innovative; the number of 
new home, business, and institutional broadband subscribers expected to 
be generated; the populations to be served by the project; the total 
cost of the project per new subscriber; if proposing a training or 
educational program, how many people it will reach, the hours of 
training per person, the number of instructors to be employed, and 
planned equipment purchases and overall cost of these devices; if 
proposing an equipment purchase or loan program, the number of 
households, businesses, and institutions that will be provided 
equipment and the total cost to the customer; if proposing an awareness 
campaign, the number of people expected to be reached, the strategies 
to be used in the campaign, how impact of the campaign will be 
measured, and the organization's previous experience with this type of 
campaign;
    i. A summary as to the viability of the project, including an 
explanation of the innovative operational solution proposed, how it 
will create sustainable adoption in the target population, and how it 
could be feasible in other situations; qualifications of the 
organization and management team, including a description of 
organizational readiness and an organizational chart; a list of 
community organizations, partners, vendors, or contributors of in-kind 
resources involved in the project and whether any of those involved 
entities are socially or economically disadvantaged partners; a project 
timeline that established key milestones for implementation of the 
project as well as potential challenges that could pose delays; a list 
of needed licensing and regulatory approvals; and a legal opinion 
addressing the applicant's ability to enter into the award agreement;
    j. Proposed budget and sustainability information from the 
applicant including a narrative explaining the project budget, an 
explanation of why the proposed costs are reasonable, demonstration 
that the project could not have been undertaken during the grant period 
but for federal assistance, organization financial statements for the 
last two years, explanation of how the project will create sustainable 
increases in subscribership and how the project itself could be 
sustained beyond the grant period, description of the planned matching 
funds for the project or a waiver, as applicable, whether the project 
is receiving or has applied for federal support for non-recurring 
costs, disclosure of other federal or state funding, and whether the 
applicant is seeking a waiver of the Buy American provision; and
    k. Completion of an environmental checklist and applicable 
certifications.

E. Filing Instructions

1. Electronic Applications
    Electronic submissions of applications will allow for the 
expeditious review of an applicant's proposal consistent with the goals 
of the Recovery Act. As a result, all applicants requesting more than 
$1 million in assistance (in the form of grants, loans, or a 
combination of grants and loans) must file their application 
electronically. Applicants whose authorized representatives are 
individuals with disabilities, however, may submit a paper application 
irrespective of the funding size of their request. In addition, 
applicants who are requesting less than $1 million in assistance may 
forego the electronic filing requirement if filing electronically would 
impose a hardship on the applicant.
2. Paper Applications
a. Format
    Applicants requesting less than $1 million in assistance (in the 
form of grants, loans, or a combination of grants and loans) may file 
their applications in a paper format if filing electronically would 
impose a hardship on the applicants. Applicants whose authorized 
representatives are individuals with disabilities may file their 
applications in a paper format irrespective of the funding size of 
their request. To the extent that applicants use electronic word 
processing software to create paper submissions, they should include in 
their filing, to the extent possible, an electronic copy of the paper 
application on an appropriate media such as a CD.
    The application package for paper submissions must be completed in 
black or blue ink, signed and mailed to the addresses provided in the 
Mailing Addresses section of this document (section E.2.d.). The 
application must be typed, single-sided, single-spaced, on 8\1/
2\ x 11 paper, excluding diagrams and charts. Use 
a font of no less than 12 points with margins of no less than one inch. 
Reviewers will be instructed to ignore any portion of the application 
that extends beyond the prescribed page limits provided in the 
application.
b. Number of Copies
    Applicants filing paper copies should submit one original and one 
copy of the application for efficient processing.

[[Page 33118]]

c. Proof of Mailing
    Applications must include proof of mailing consisting of one of the 
following:
    i. A legibly dated U.S. Postal Service postmark. Please note that 
the U.S. Postal Service does not uniformly provide a dated postmark. 
Before relying on this method, applicants should check with their local 
post office.
    ii. A legible mail receipt with the date of mailing stamped by the 
U.S. Postal Service.
    iii. A dated shipping label, invoice, or receipt from a commercial 
carrier.
    Neither of the following will be accepted as proof of mailing: a 
private metered postmark; nor a mail receipt that is not dated by the 
U.S. Postal Service.
    Applications with postmarked dates after August 14, 2009, will not 
be considered in the current grant round and will be returned to the 
applicant. Applications will NOT be accepted via facsimile machine 
transmission.
d. Mailing Addresses
    Completed applications must be mailed, shipped, or sent overnight 
express to:
i. NTIA
Broadband Technology Opportunities Program, National Telecommunications 
and Information Administration, U.S. Department of Commerce, 1401 
Constitution Avenue, NW., HCHB, Room 4812, Washington, DC 20230.

    or hand-delivered to:

Broadband Technology Opportunities Program, National Telecommunications 
and Information Administration, U.S. Department of Commerce, HCHB, Room 
1874, 1401 Constitution Avenue, NW., Washington, DC 20230.

    Room 1874 is located at entrance 10 on 15th Street, NW., 
between Pennsylvania and Constitution Avenues.
    United States Postal Service Priority Mail, First Class Mail, and 
Parcel Post packages delivered to the Department of Commerce are 
irradiated. Irradiation could result in damage to the contents, or 
delay the delivery of an application to the BTOP Program Office. Thus, 
applicants are encouraged to consider the impact of these procedures in 
selecting their chosen method for application delivery.
ii. RUS
Broadband Initiatives Program, Rural Utilities Service, U.S. Department 
of Agriculture, 1400 Independence Avenue, SW., Stop 1599, Washington, 
DC 20250.

    or hand-delivered to:

Broadband Initiatives Program, Rural Utilities Service, U.S. Department 
of Agriculture, 1400 Independence Avenue, SW., Room 2868, Washington, 
DC 20250.
iii. Signatures
    Applicants filing in a paper format must submit an original signed 
copy of their application and certifications. Applicants filing 
electronically may submit an electronic signature for their application 
by registering at http://www.ccr.gov.

F. Submission Dates and Times

    Electronic applications must be submitted between July 14, 2009, at 
8 a.m. ET and 5 p.m. ET on August 14, 2009. The electronic application 
system at http://www.broadbandusa.gov will provide a date and time 
stamped confirmation number that will serve as proof of submission. 
Paper submissions must be postmarked no later than August 14, 2009, or 
hand-delivered no later than 5 p.m. ET on August 14, 2009. Applications 
delivered by guaranteed carrier services will be considered postmarked 
on the date they are submitted to the carrier.
    No application will be accepted after the submission date unless: 
1. There was a carrier error and the carrier accepted the application 
for delivery prior to the submission deadline; or 2. there were 
significant weather delays or natural disasters as declared by federal 
or state authorities and the applicant submits proper documentation 
explaining the delay.

G. Material Representations

    The application, including certifications, and all forms submitted 
as part of the application will be treated as a material representation 
of fact upon which RUS and NTIA will rely in awarding grants.

H. Material Revisions

    No material revision will be permitted for any application after 
the submission deadline, unless such revision is requested by RUS and 
NTIA. RUS and NTIA, however, may request clarifications or submissions 
for completeness that are non-material.

VII. Application Review Information

A. Evaluation Criteria

    The scoring criteria used to review and analyze BIP and BTOP 
applications are grouped into four categories: 1. Project Purpose; 2. 
Project Benefits; 3. Project Viability; and 4. Project Budget and 
Sustainability. Each application will be scored against the following 
objective criteria, and not against other applications. This section 
describes the evaluation criteria first for BIP Broadband 
Infrastructure projects, then for the three BTOP project categories.
1. BIP Broadband Infrastructure Projects
a. General
    In accordance with the Recovery Act, the priority for BIP is to 
provide and improve broadband service to the highest proportion of 
rural residents who do not have adequate access to broadband service 
for rural development, which RUS defines to mean rural residents who 
reside in unserved and underserved rural areas. Additionally, the 
Recovery Act mandates that priority be given to projects which: i. Give 
end users a choice of providers; ii. serve the highest proportion of 
rural residents that lack access to broadband service; iii. are 
projects of current or former RUS borrowers (Title II borrowers); and 
iv. are fully funded and ready to start once Recovery Act funding is 
received. Lastly, coordination with other federal, state, and local 
programs, including Recovery Act programs, is highly encouraged as a 
way to more efficiently and effectively achieve program objectives.
b. Project Purpose (25 Points)
    i. Proportion of Rural Residents Served in Unserved Areas (5 
points). Points will be awarded for serving rural residents located in 
unserved areas. For every 10,000 unserved households that will receive 
broadband service, one point will be awarded up to a maximum of five 
points.
    ii. Rural Area Targeting (5 points). Points will be awarded for 
exceeding the 75 percent rural area service requirement. For every five 
percent increase in the rural service area above the 75 percent rural 
area service requirement, one point will be awarded up to a maximum of 
five points.
    iii. Remote Area Targeting (5 points). Up to five points will be 
awarded for proposed funded service areas that are at least 50 miles 
from a non-rural area. If at least one proposed funded service area is 
a minimum of 50 miles from a non-rural area, one point will be awarded. 
For each additional 50 miles that at least one proposed funded service 
area is located away from a non-rural area, one additional point will 
be awarded up to a total of five points.
    iv. Title II Borrowers (5 points). Five points will be awarded to 
applications

[[Page 33119]]

which are submitted by entities which have borrowed under Title II of 
the RE Act.
    v. Recovery Act and other governmental collaboration (5 points). 
Points will be awarded for cooperation with other governmental 
development programs as well as coordination with Recovery Act 
construction projects. Examples include the Department of Energy's 
Smart Grid, Investment Program, the Department of Housing and Urban 
Development's Public Housing Capital Fund, the Department of 
Transportation's Capital Assistance for High Speed Rail Corridors and 
Intercity Passenger Service program, and other investments where 
collaboration would lead to greater project efficiencies. In each case, 
the applicant must convincingly demonstrate that these leveraging 
efforts are substantive and meaningful. One point will be awarded for 
each partnered governmental or Recovery Act program that has 
demonstrated such a partnership is substantive and meaningful up to a 
maximum of five points.
c. Project Benefits (25 Points)
    i. Performance of the offered service (10 points). For Last Mile 
Projects: For wireline projects that are constructed to deliver a 
minimum of 20 megabit per second service to the household (upstream 
plus downstream), ten points will be awarded. For wireless projects 
that are constructed to deliver a minimum of two megabits per second 
service to the end user (upstream plus downstream), ten points will be 
awarded. For projects that are a combination of wireline and wireless 
projects, both of the above standards must be met for the corresponding 
parts of the network in order to receive the ten points. For Middle 
Mile Projects: For middle mile projects that are constructed to deliver 
100 megabits per second service to all end points in their network, ten 
points will be awarded.
    ii. Affordability of services offered (5 points). RUS will evaluate 
the level of support that is provided and award up to five points for 
applications that demonstrate that the proposed rates for the broadband 
service are affordable for the targeted audience. The stronger the 
level of support that is provided, the higher the number of points that 
will be awarded.
    iii. Choice of provider (5 points). Five points will be awarded to 
applications that propose to construct infrastructure and implement a 
business plan which would allow more than one provider to serve end 
users in the proposed funded service area.
    iv. Critical community facilities (5 points). For applications that 
are proposing to offer discounted rate packages at least 25 percent 
lower than the advertised rate packages to all critical community 
facilities in the proposed funded service area, five points will be 
awarded.
d. Project Viability (25 Points)
    i. Applicant's organizational capability (12 points). Up to twelve 
points will be awarded based on the strength of the project's 
management team. RUS will evaluate past performance and accomplishments 
and award points accordingly.
    ii. Community support (2 points). Up to two points will be awarded 
if letters of support are received from all communities in the proposed 
funded service area from the designated community leader.
    iii. Ability to promptly start project (10 points). Ten points will 
be awarded if the applicant can provide evidence that the following 
conditions have been satisfied:
    (1) All licenses, franchises and regulatory approvals required to 
operate the system and provide the proposed services have been 
received;
    (2) That the required contractors and vendors necessary to 
implement the project are prepared to enter into contracts as soon as 
funds are made available;
    (3) That all required equity contributions have been transferred 
into the applicant's accounts; and
    (4) That the project timeline and milestones are reasonable.
    iv. Disadvantaged small businesses (1 point). One point will be 
awarded to applicants that meet the definition of a socially and 
economically disadvantaged small business concern under section 8(a) of 
the SBA.
e. Project Budget and Sustainability (25 Points)
    i. Reasonableness of the budget (5 points). Up to five points will 
be awarded based on the clarity and reasonableness of the proposed 
budget.
    ii. Leverage of outside resources (10 points). Up to ten points 
will be awarded based on the amount of outside resources contributed to 
the total financing provided under BIP:
    (1) 10 points if this ratio is greater than 100%
    (2) 7 points if this ratio is between 100% and 75%
    (3) 5 points if this ratio is between 75% and 50%
    (4) 3 points if this ratio is between 50% and 25%
    (5) 1 point if this ratio is lower than 25%.
    iii. Extent of grant funding (10 points). Up to ten points will be 
awarded based on the amount of grants funds requested in relation to 
the amount of loan funds requested (grant funds/loan funds):
    (1) 0 points if grant funds are 100%
    (2) 1 point if this ratio is between 100% and 75%
    (3) 3 points if this ratio is between 75% and 50%
    (4) 5 points if this ratio is lower than 50%
    (5) 10 points if this ratio is zero.
2. BTOP Broadband Infrastructure, Public Computer Center, and 
Sustainable Broadband Adoption Projects
a. General
    The evaluation criteria for BTOP projects will be the same across 
the BTOP project categories except: i. Under the Project Benefits 
section, different evaluation criteria and scoring methodologies are 
applied to each project category; ii. the Technical Feasibility 
criterion under the Project Viability heading is subdivided between 
Sustainable Broadband Adoption projects and all other BTOP project 
categories; and iii. the Sustainability criterion under the Budget and 
Sustainability heading is similarly subdivided between Sustainable 
Broadband Adoption projects and all other BTOP project categories. 
These variations are detailed in the descriptions of the evaluation 
criteria below.
b. Project Purpose (30 Points)
    i. Fit with statutory purposes. Applications will be evaluated with 
respect to each of BTOP's statutory purposes.\39\ Reviewers will 
consider, relative to each purpose, whether the applicant is addressing 
a compelling problem of the sort that the statute is intended to 
resolve, whether the applicant has offered an effective solution to 
that problem, and whether the proposed solution is of broad 
significance and includes developments that can be replicated to 
improve future projects. Additional consideration will be given to 
projects located partially or wholly unserved or underserved areas

[[Page 33120]]

of a state as described by the state submission in the State Broadband 
Data and Development Grant Program or as otherwise determined by NTIA. 
Additional consideration will also be given to applicants that address 
more than one statutory purpose and project category (e.g., Broadband 
Infrastructure, Public Computer Centers, or Sustainable Broadband 
Adoption) in a convincing manner.
---------------------------------------------------------------------------

    \39\ See Recovery Act Sec.  6001(b), 123 Stat. at 512-13 (to 
provide broadband access to unserved areas; to provide improved 
broadband access to underserved areas; to provide broadband access, 
education, and support to community anchor institutions, or 
organizations and agencies serving vulnerable populations, or job-
creating strategic facilities located in state- or federally 
designated economic development areas; to improve access to, and use 
of, broadband service by public safety agencies; and to stimulate 
the demand for broadband, economic growth, and job creation).
---------------------------------------------------------------------------

    ii. Recovery Act and other governmental collaboration. Applicants 
will be evaluated on their collaboration with Recovery Act or other 
federal or state development programs that leverage the impact of the 
proposed project. Examples include the Department of Energy's Smart 
Grid Investment Program, the Department of Housing and Urban 
Development's Public Housing Capital Fund, the Department of 
Transportation's Capital Assistance for High-Speed Rail Corridors and 
Intercity Passenger Service program, and other investments where 
collaboration would lead to greater project efficiencies. In each case, 
the applicant must convincingly demonstrate that these leveraging 
efforts are substantive and meaningful.
    iii. Enhanced service for health care delivery, education, and 
children. Reviewers will assess the depth and breadth of the project's 
ability to enhance broadband service for health care delivery, 
education, and children as contemplated by the Recovery Act.\40\ 
Projects would need to demonstrate that they go beyond providing access 
to broadband to include more robust educational, health care, or 
related broadband service delivery.
---------------------------------------------------------------------------

    \40\ See id. Sec.  6001(h)(2)(C), 123 Stat. at 515.
---------------------------------------------------------------------------

    iv. Socially and economically disadvantaged small businesses. 
Reviewers will grant consideration to applicants that certify they meet 
the statutory definition of a socially and economically disadvantaged 
small business concern, or that have established agreements in 
principle to contract with socially and economically disadvantaged 
businesses that meet that definition.
c. Project Benefits (25 Points)
    Reviewers will evaluate the various benefits that the proposed 
project will provide. This criterion will be focused primarily on 
measuring the benefits of the proposed project. Due to the broad scope 
of the three project categories and the expected diversity of proposed 
projects, the specific elements to be evaluated under this heading vary 
from one project category to another, as described below.
i. BTOP Broadband Infrastructure Last Mile Projects
    (1) Cost-effectiveness. Applications will be scored on the 
project's cost-efficiency based on the ratio of the total cost of the 
project to households passed.
    (2) Performance of the offered service. Applications will be scored 
for the extent to which the advertised speed for the network's highest 
offered speed tier exceeds the minimum speed requirement for broadband 
service (768 kbps downstream and 200 kbps upstream). Networks will be 
graded on a sliding scale with higher end-user speeds receiving a 
higher score. Proposed networks with high latency will be viewed 
unfavorably. Applicants may gain additional consideration if the 
applicant can demonstrate a clear and affordable upgrade path for the 
network.
    (3) Affordability of services offered. Projects will be evaluated 
on the pricing of the services offered compared to existing broadband 
services in the proposed funded service area. If there are no existing 
broadband services in the proposed funded service area, projects will 
be evaluated on the ability of the applicant to convincingly 
demonstrate that their proposed pricing is appropriate for the service 
area.
    (4) Nondiscrimination, interconnection, and choice of provider. 
Applications will be scored on the extent to which the applicant 
commits to exceeding the minimum requirements for interconnection and 
nondiscrimination established in section V.C.2.b. of this NOFA. 
Additional consideration will be given for displaying the network's 
nondiscrimination and interconnection policies in a prominent location 
on the service provider's Web page, and providing notice to customers 
of changes to these policies. Additional consideration will be given to 
applicants that commit to offering wholesale access to the project 
facilities at reasonable rates and terms. Additional consideration will 
also be given to applicants that commit to binding private arbitration 
of disputes concerning the awardees' interconnection obligations as 
explained above in section V.C.2.b of this NOFA. Reviewers will also 
consider whether the application proposes to construct infrastructure 
and implement a business plan which would allow more than one provider 
to serve end users in the proposed funded service area.
ii. BTOP Broadband Infrastructure Middle Mile Projects
    For purposes of evaluating BTOP Middle Mile projects, applicants 
should define the area that will directly benefit from the project, 
including the community anchor institutions and end users that may 
receive broadband service through the proposed middle mile network.
    (1) Impact on the area. Applications will be scored on how great an 
impact they would have on the area. Reviewers will consider the number 
of end-points and points of interconnection the network will offer and 
the proposed connections to last mile networks, community anchor 
institutions, or public safety entities, as well as the projected 
number of new end users served by those proposed connections.
    (2) Level of need in the area. Applications will be scored on the 
level of need for a middle mile network in the area. Reviewers will 
consider whether there are middle mile providers already present in all 
or part of the area, as well as the pricing and available capacity of 
those providers. Reviewers will also consider what proportion of the 
network's end-points, points of interconnection, and projected end 
users are located in unserved or underserved areas. In addition, 
reviewers will also consider applicants' explanation of why their 
proposed project is well-suited to address the needs of the area.
    (3) Network capacity. Applicants will be evaluated on the capacity 
of the network. The network should provide capacity sufficient to serve 
the anticipated last mile networks, community anchor institutions, and 
public safety entities, and the number of end users served by them, as 
projected by the applicant, taking into consideration the nature of the 
services that these institutions and end users are likely to seek to 
utilize the network for. Reviewers will give additional consideration 
to projects that will be scalable to meet the future needs of the area.
    (4) Affordability of services offered. Projects will be evaluated 
on the pricing of the services offered compared to existing broadband 
services in the proposed funded service area. If there are no existing 
broadband services in the proposed funded service area, projects will 
be evaluated on the ability of the applicant to convincingly 
demonstrate that their proposed pricing for middle mile services is 
appropriate for the proposed funded service area.
    (5) Nondiscrimination, interconnection, and choice of provider. 
Applications will be scored on the extent to which the applicant 
commits to exceeding the minimum requirements for interconnection and 
nondiscrimination established in

[[Page 33121]]

section V.C.2.b. of this NOFA. Additional consideration will be given 
for displaying the network's nondiscrimination and interconnection 
policies in a prominent location on the service provider's web page, 
and providing notice to customers of changes to these policies. 
Additional consideration will be given to applicants that commit to 
offering wholesale access to network components and services such as 
wavelength or fibers at reasonable rates and terms. Additional 
consideration will also be given to applicants that commit to binding 
private arbitration of disputes concerning the awardees' 
interconnection obligations as explained above in section V.C.2.b of 
this NOFA. Reviewers will also consider whether the application 
proposes to construct infrastructure and implement a business plan 
which would allow more than one provider to serve end users in the 
proposed funded service area.
iii. BTOP Public Computer Center Projects
    (1) Availability to the public. Applications will be scored on the 
availability of the computer center to the public. Reviewers will 
consider the capacity of the computer center, its hours of 
availability, any membership or usage fees charged, restrictions on 
usage, the proportionality of the computer center's capacity and hours 
of availability to the population the applicant proposes to serve, 
public outreach, and the computer center's accessibility to persons 
with disabilities, accounting for both the physical accessibility of 
the facility and the accessibility of the computer equipment and 
software.
    (2) Training and educational programs offered. Applicants will be 
scored on the availability, accessibility, and quality of training and 
educational programs offered through the computer center. Reviewers 
will consider the degree to which the programs meet the relevant needs 
of the community.
    (3) Availability and qualifications of consulting and teaching 
staff. Applications will be evaluated on the strength of the consulting 
and teaching staff at the computer center. Reviewers will consider the 
qualifications and training required of such staff as well as whether 
the number of available staff is sufficient for the capacity of the 
computer center.
iv. BTOP Sustainable Broadband Adoption
    (1) Number of new users. Applications will be scored on the number 
of new broadband subscribers and other regular users the project will 
generate. Reviewers will take into consideration both the overall 
number of new subscribers and users and the proportion that these new 
subscribers and users represent of the number of non-subscribers and 
non-users in the relevant area.
    (2) Cost per new user. Applications will be evaluated on the cost-
effectiveness of the program. Reviewers will consider cost per 
projected new subscriber or other regular user, taking into account the 
applicant's explanation of why the approach selected is a cost-
effective approach given the particular circumstances of the project.
    (3) Innovation. Applications will be evaluated on the degree to 
which the project demonstrates replicable new ideas, approaches, and 
methods to encourage sustainable broadband adoption.
d. Project Viability (25 Points)
    i. The technical feasibility of the proposed project. For BTOP 
Broadband Infrastructure and Public Computer Center projects: 
applications will be scored on the comprehensiveness and 
appropriateness of the technical solution and the clarity, level of 
detail, and coherence of the system designs. In order to receive a full 
score, applicants must demonstrate that the project includes 
developments that will be feasible in other situations. For Sustainable 
Broadband Adoption projects: reviewers will assess the mechanics and 
operational details of the project. Applicants will be scored on the 
clarity and detail of their project plan, how convincing the rationale 
behind the plan is, and whether they can demonstrate that the plan 
includes innovative solutions that would be feasible in other 
situations.
    ii. Applicant's organizational capability. Reviewers will assess 
whether the applicant has the organizational capability necessary to 
undertake and complete the project. Reviewers will consider the years 
of experience and expertise of the project management team, and the 
past track record of the organization with projects of a similar size 
and scope, as well as the organization's capacity and readiness.
    iii. The level of community involvement in the project. Reviewers 
will evaluate linkages to unaffiliated organizations in the project 
area (from the public, non-profit, and private sectors), particularly 
community anchor institutions and public safety organizations, as an 
ongoing and integral part of the project planning and operation. In 
order to receive the full score for this criterion, at least one 
partner should meet the definition of a socially and economically 
disadvantaged small business concern under section 8(a) of the SBA--
these partners must be distinct from any contractor or related entity 
specified for the purposes of the socially disadvantaged small 
businesses criterion in Project Purpose. Applicants should demonstrate 
that each linkage is substantial and meaningful.
    iv. Ability to promptly start project. Projects will be evaluated 
on whether they will be able to start promptly and be completed in an 
appropriate timeframe for the size and scope of the project. Reviewers 
will consider the planned start date of the project, the reasonableness 
of the project timeline and associated milestones, whether the 
applicant has secured all licenses, franchises, and regulatory 
approvals required to complete the project, and whether the required 
contractors and vendors necessary to implement the project are prepared 
to enter into contracts as soon as the funds are made available.
e. Project Budget and Sustainability (20 Points)
    i. Reasonableness of the budget. Reviewers will evaluate the 
reasonableness of the budget based on its clarity, level of detail, 
comprehensiveness, appropriateness to the proposed technical and 
programmatic solutions, the reasonableness of its costs, and whether 
the allocation of funds is sufficient to complete the tasks outlined in 
the project plan.
    ii. Sustainability of the project. For BTOP Broadband 
Infrastructure and Public Computer Center projects: Applicants must 
convincingly demonstrate the ability of the project to be sustained 
beyond the funding period. Reviewers will consider business plans, 
market projections, third-party funding commitments, and other data as 
may be appropriate to the nature of the applicant and the proposed 
project. For Sustainable Broadband Adoption projects: Reviewers will 
consider both whether the project will be sustained beyond the funding 
period and whether the increases in broadband adoption rates in the 
project area caused by the project will be sustained beyond the 
conclusion of the project.
    iii. Leverage of outside resources. The applicant must demonstrate 
the ability to provide, from non-federal sources, funds required to 
meet or exceed the 20 percent matching funds requirement unless a 
waiver of that requirement has been requested. Reviewers will give

[[Page 33122]]

additional consideration to proposals that exceed the minimum matching 
requirement, provide cash matches, or receive matching funds from 
acceptable federal sources as described in section V.C.4.b of this 
NOFA. For purposes of this evaluation, applicants that have received a 
full or partial waiver of the cost-matching requirement will be treated 
as having provided a 20 percent non-cash match.

B. Notice of Proposed Funded Service Areas

    RUS and NTIA will post a Public Notice of the proposed funded 
service areas of each Broadband Infrastructure application at http://www.broadbandusa.gov for a 30-day period. The Public Notice will 
provide existing service providers an opportunity to submit to the 
agencies information regarding their service offerings. If an existing 
service provider submits a response outside the timeframe specified in 
this NOFA, it will not be considered an existing service provider for 
determining whether the applicant's service area is eligible, but will 
still be considered with respect to the agencies' other applicable 
eligibility requirements. The information submitted by an existing 
service provider will be treated as proprietary and confidential to the 
extent permitted under applicable law.
    If the information submitted by an existing service provider 
demonstrates that the applicant's proposed funded service area is not 
unserved, both RUS and NTIA reserve the right to reclassify the 
application and consider the proposed area as underserved if the 
application meets the criteria in the underserved definition. If the 
information submitted by an existing service provider establishes that 
the applicant's proposed funded service area is not underserved, both 
RUS and NTIA may reject the application.

VIII. Anticipated Announcement and Award Dates

A. Announcement Date

    RUS and NTIA intend to announce the awards starting on or about 
November 7, 2009.

B. RUS Loan and Grant Document Distribution Date

    RUS intends to make grant, loan, and loan/grant combination 
documents available to successful applicants within 30 days of the 
award announcement. RUS expects compliance with all documentation 
requirements from successful applicants, and intends to schedule the 
closings within 60 days of award announcement.

C. BTOP Grants

    NTIA intends to make award documents available to successful 
applicants within 30 days of the award announcement. NTIA expects 
compliance with all documentation requirements from successful 
applicants within 60 days of award announcement.

IX. Award Administration Information

A. Award Notices

1. BIP
    Successful applicants will receive award documents from RUS 
following award notification. Applicants may view sample documents on 
BIP at http://www.broadbandusa.gov.
2. BTOP
    Applicants will be notified in writing by the DOC's Grants Officer 
if their applications are selected for an award. If the application is 
selected for funding, the DOC's Grants Officer will issue the grant 
award (Form CD-450), which is the authorizing financial assistance 
award document. By signing the Form CD-450, the awardee agrees to 
comply with all award provisions. NTIA will provide the Form CD-450 by 
mail or overnight delivery to the appropriate business office of the 
recipient's organization. The awardee must sign and return the Form CD-
450 without modification within 30 days of receipt.
    If an applicant is awarded funding, neither the DOC nor NTIA is 
under any obligation to provide any additional future funding in 
connection with that award or to make any future award(s). Amendment or 
renewal of an award to increase funding or to extend the period of 
performance is at the discretion of the DOC and of NTIA.

B. Administrative Requirements

1. BIP
    a. Pre-award Conditions. No funds will be disbursed under this 
program until all other sources of funding have been obtained and any 
other pre-award conditions have been met. Failure to obtain one or more 
sources of funding committed to in the application or to fulfill any 
other pre-award condition within 30 days of award announcement will 
result in withdrawal of the award.
    b. Failure To Comply With Award Requirements. If an awardee fails 
to comply with the terms of the award as specified in the award 
documents, RUS may exercise rights and remedies.
    c. Advance Procedures. RUS loan and grant advances are made at the 
request of the awardee according to the procedures stipulated in the 
award documents. Loan/grant combination funds are advanced in 
proportion to the amount of the award made in the form of loans and 
grants. Remote areas project grant funds are advanced independent of 
the loan/grant combination funds.
    d. Contracting. Contracting is to be done at the awardee's 
discretion, using private contracts or RUS's form contracts, however 
equal employment opportunity, civil rights, etc. requirements must 
still be met.
    e. Accounting, Monitoring, and Reporting Requirements. Awardees 
must follow RUS's accounting, monitoring, and reporting requirements. 
These requirements, which are specified in the award documents, 
include, but are not limited to, the following:
    i. Awardees must adopt a GAAP system of accounts acceptable to RUS;
    ii. Awardees must submit annual audited financial statements along 
with a report on compliance and on internal control over financial 
reporting, and a management letter in accordance with the requirements 
of 7 CFR 1773. The CPA conducting the annual audit is selected by the 
awardee and must be approved by RUS as set forth in 7 CFR Sec.  1773.4;
    iii. Awardees must submit to RUS the information as specified in 
section IX.D.2;
    iv. Awardees must comply with all reasonable RUS requests to 
support ongoing monitoring efforts. The awardee shall afford RUS, 
through its representatives and representatives of the USDA Office of 
Inspector General reasonable opportunity, at all times during business 
hours and upon prior notice, to have access to and the right to inspect 
the broadband system, and any other property encumbered by the mortgage 
or security agreement, and any or all books, records, accounts, 
invoices, contracts, leases, payrolls, timesheets, cancelled checks, 
statements, and other documents, electronic or paper of every kind 
belonging to or in the possession of the awardee or in any way 
pertaining to its property or business, including its subsidiaries, if 
any, and to make copies or extracts therefrom.
    f. Assistance Instruments.
    i. Terms and conditions of loan/grant combinations are set forth in 
the non-negotiable standard loan/grant contract, note, and/or mortgage 
found at http://www.broadbandusa.gov.
    ii. Terms and conditions of loans are set forth in the non-
negotiable standard loan contract, note, and/or mortgage found at 
http://www.broadbandusa.gov.
    iii. Terms of the remote area end-user grant are set forth in a 
nonnegotiable

[[Page 33123]]

grant agreement found at http://www.broadbandusa.gov.
    iv. Loan and grant documents appropriate to the project must be 
executed prior to any advance of funds.
    v. Sample loan documents and grant agreements can be found at 
http://www.broadbandusa.gov.
    g. Loan Terms and Conditions. For loan/grant combinations, 
applicants must indicate the amount of the award to be requested in the 
form of a loan, and the amount to be requested in the form of a grant. 
The grant component must not exceed the loan component. The scoring 
criteria reward those applicants that reduce the percentage of the 
funds requested in the form of a grant. Applicants may request a 100 
percent loan. The following terms shall apply to the loans, as well as 
other terms that are specified in the loan documents:
    i. Interest rate. Loans shall bear interest at a rate equal to the 
cost of borrowing to the Department of Treasury for obligations of 
comparable maturity. The applicable interest rate will be set at the 
time of each advance.
    ii. Repayment period. Unless the applicant requests a shorter 
repayment period, broadband loans must be repaid with interest within a 
period that, rounded to the nearest whole year, is equal to the 
expected Composite Economic Life of the assets to be financed, as 
determined by RUS based upon acceptable depreciation rates.
    iii. Amortization period. Interest begins accruing on the date of 
each loan advance and interest payments are due monthly. Upon 
completion of the build-out, or a date certain that is determined at 
closing, whichever occurs first, monthly principal payments will be 
established in an amount that amortizes the outstanding balance over 
the remaining term of the loan.
    iv. Fidelity bonding. Applicants must agree to obtain a fidelity 
bond for 15 percent of the loan amount. The fidelity bond must be 
obtained as a condition of loan closing. RUS may reduce the percentage 
required if it determines that 15 percent is not commensurate with the 
risk involved.
    v. Security. The loan portion of the award must be adequately 
secured, as determined by RUS.
    (1) The loan and loan/grant combination must be secured by the 
assets purchased with the loan or loan/grant funds, as well as all 
other assets of the applicant and any other signer of the loan 
documents that are available to be pledged to RUS.
    (2) RUS must be given an exclusive first lien, in form and 
substance satisfactory to RUS, on all of the assets purchased with the 
loan or loan/grant funds. RUS may share its first lien position with 
one or more lenders on a pari passu basis if security arrangements are 
acceptable to RUS.
    (3) Unless otherwise approved by the RUS, all property purchased 
with award funds must be owned by the awardee.
    (4) In the case of awards that include financing of facilities that 
do not constitute self-contained operating systems, the applicant shall 
furnish assurance, satisfactory to RUS, that continuous and efficient 
service at the broadband funding speed will be rendered.
2. BTOP
    Administrative and national policy requirements for BTOP grant 
funding, inter alia, are contained in the Pre-Award Notification 
Requirements for Grants and Cooperative Agreements (DOC Pre-Award 
Notification), published in the Federal Register on February 11, 2008 
(73 FR 7696), as amended. All BTOP applicants are required to comply 
with all applicable provisions set forth in the DOC Pre-Award 
Notification.

C. Award Terms and Conditions

1. Scope
    Awardees, including all contractors and subcontractors, are 
required to comply with the obligations set forth in the Recovery Act 
and the requirements established herein. Any obligation that applies to 
the awardee shall extend for the life of the award-funded facilities.
2. Sale or Lease of Project Assets
    The sale or lease of any portion of the award-funded broadband 
facilities during their life is prohibited, except as provided herein. 
The agencies may approve a sale or lease if it is: a. For adequate 
consideration; b. the purchaser or lessee agrees to fulfill the terms 
and conditions relating to the project after such sale or lease; and c. 
either: i. the sale or lease is set forth in the original application 
and is part of the applicant's proposal for funds; or ii. the agencies 
waive this provision for any sale or lease occurring after the tenth 
year from the date of issuance of the grant, loan or loan/grant award. 
Awardees are required to notify the agencies in the event of a proposed 
transfer of award-funded facilities. Nothing in this section is meant 
to limit Broadband Infrastructure awardees from leasing facilities to 
another service provider for the provision of broadband services.
3. For BTOP Only, Access to Records for Audits, Site Visits, Monitoring 
and Law Enforcement Purposes
    The Inspector General of the DOC, or any of his or her duly 
authorized representatives, and NTIA representatives, or any of their 
duly authorized representatives, shall have access to and the right to 
inspect the broadband system and any other property funded by the 
grant, any and all books, records, accounts, invoices, contracts, 
leases, payrolls, time sheets, canceled checks, statements, and other 
documents, papers and records of the parties to a grant, including 
their subsidiaries, if any, whether written, printed, recorded, 
produced, or reproduced by any electronic, mechanical, magnetic or 
other process or medium, in order to make audits, inspections, site 
visits, excerpts, transcripts, copies, or other examinations as 
authorized by law. An audit of an award may be conducted at any 
time.\41\
---------------------------------------------------------------------------

    \41\ Note that section 1515 of the Recovery Act also authorizes 
the Inspector General to examine records and interview officers and 
employees of the grantee and other entities regarding the award of 
funds. See Recovery Act Sec.  1515, 123 Stat. at 289.
---------------------------------------------------------------------------

4. Broadband Data Collection
    All BTOP Broadband Infrastructure awardees that offer Internet 
access service to the public for a fee must agree to participate in the 
State Broadband Data and Development Grant Program pursuant to the BDIA 
and section 6001(l) of the Recovery Act. With respect to BIP awardees, 
RUS will provide to NTIA data supplied by awardees to support the 
development of the broadband mapping project conducted pursuant to 
section 6001(l) of the Recovery Act. This data would include:
    a. The availability of broadband service within service area. For 
wireline-based systems, the form of the broadband (e.g., DSL) and the 
advertised speeds up and down available within the service area and the 
number of residents, small businesses, large businesses, and public 
facilities. For wireless-based systems, the advertised and typical 
speeds up and down within the wireless' carriers license area, and the 
spectrum on which it's provided.
    b. The residential average revenue per user.
    c. The first point of aggregation for last mile connection points 
(e.g., remote terminals or cable headends).
    d. Middle mile interconnection points.
    e. A list of community anchor institutions to which service is 
provided.

[[Page 33124]]

5. Certifications
    a. The applicant must certify that he or she is authorized to 
submit the application on behalf of the eligible entity(ies) listed on 
the application, that the applicant has examined the application, that 
all of the information in the application, including certifications and 
forms submitted, all of which are part of the application, are material 
representations of fact and true and correct to the best of his or her 
knowledge, that the entity(ies) that is requesting funding pursuant to 
the application and any subawardees will comply with the terms, 
conditions, purposes, and federal requirements of the program; that no 
kickbacks were paid to anyone; and that a false, fictitious, or 
fradulent statements or claims on this application is grounds for 
denial or termination of an award, and/or possible punishment by a fine 
or imprisonment as provided in 18 U.S.C. 1001 and civil violations of 
the False Claims Act (31 U.S.C. 3729 et seq.);
    b. The applicant certifies that the entity(ies) he or she 
represents have and will comply with all applicable Federal, state, and 
local laws, rules, regulations, ordinances, codes, orders, and 
programmatic rules and requirements relating to the project.\42\ The 
applicant acknowledges that failure to do so may result in rejection or 
deobligation of the award. The applicant acknowledges that failure to 
comply with all federal and program rules could result in civil or 
criminal prosecution by the appropriate law enforcement authorities;
---------------------------------------------------------------------------

    \42\ See Recovery Act Sec.  6001(e)(4), 123 Stat. at 514.
---------------------------------------------------------------------------

    c. If requesting BTOP funding, the applicant certifies that the 
entity(ies) he or she represents has and will comply with all 
applicable administrative and federal statutory, regulatory, and policy 
requirements set forth in the DOC Pre-Award Notification; DOC Financial 
Assistance Standard Terms and Conditions (Mar. 8, 2009); DOC American 
Recovery and Reinvestment Act Award Terms (Apr. 9, 2009); and any 
Special Award Terms and Conditions that are included by the Grants 
Officer in the award.

D. Reporting Requirements

1. General Recovery Act Requirements
a. OMB Reporting Requirements Implementing the Recovery Act
    Any grant, loan, or loan/grant combination awarded under this NOFA 
shall be subject to the applicable statutes and regulations regarding 
reporting on Recovery Act funds.\43\ If Recovery Act funds are combined 
with other funds to fund or complete projects and activities, Recovery 
Act funds must be accounted for separately from other funds and 
reported to RUS or NTIA or any federal Web site established for 
Recovery Act reporting purposes. Moreover, recipients of funds under 
this NOFA must also comply with the accounting requirements as 
established or referred to in this NOFA.
---------------------------------------------------------------------------

    \43\ See, e.g., 2 CFR pt. 176; OMB, Interim Final Guidance for 
Federal Financial Assistance, 74 FR 18449 (Apr. 23, 2009); 
Implementing Guidance for Reports on Use of Funds Pursuant to the 
American Recovery and Reinvestment Act of 2009 (OMB M-09-21 June 22, 
2009).
---------------------------------------------------------------------------

b. Required Data Elements
    The awardee and each contractor engaged by the awardee must submit 
the following information to the relevant agency:
    i. The total amount of Recovery Act funds received;
    ii. The amount of Recovery Act funds received that were expended or 
obligated to projects or activities;
    iii. A detailed list of all projects or activities for which 
Recovery Act funds were expended or obligated, including: (1) The name 
of the project or activity; (2) a description of the project or 
activity; (3) an evaluation of the completion status of the project or 
activity; (4) an estimate of the number of jobs created and the number 
of jobs retained by the project or activity; and (5) for infrastructure 
investments made by state and local governments, the purpose, total 
cost, and rationale of the agency for funding the infrastructure 
investment with Recovery Act funds, and name of the person to contact 
at the agency if there are concerns with the infrastructure investment; 
and
    iv. Detailed information on any subcontracts or subgrants awarded 
by the awardee to include the data elements required to comply with the 
Federal Funding Accountability and Transparency Act of 2006 (Pub. L. 
109-282, 120 Stat. 1186 (to be codified at 31 U.S.C. Sec.  6101 note)), 
allowing aggregate reporting on awards below $25,000 or to 
individuals.\44\
---------------------------------------------------------------------------

    \44\ Recovery Act Sec.  1512(c), 123 Stat. at 287.
---------------------------------------------------------------------------

    Awardees that must report information according to paragraph (iv) 
above (re: subcontracts or subgrants) must register with the CCR 
database (http://www.ccr.gov/) or complete other registration 
requirements as determined by the Director of OMB.
c. Reporting Deadlines
    Recovery Act reports are due to the agencies ten days after the 
quarter in which the award was issued ends and, unless otherwise noted, 
each quarter thereafter until a final report is made at the end of 
three years. The final report should summarize the awardee's quarterly 
filings and state whether the project's goals have been satisfied. 
Pursuant to OMB Guidelines, reports should be submitted electronically 
to http://www.federalreporting.gov. If the awardee fails to submit an 
acceptable quarterly report or audited financial statement within the 
timeframe designated in the grant or loan award, the agencies may 
suspend further payments until the awardee complies with the reporting 
requirements. Additional information regarding reporting requirements 
will be specified at the time the award is issued.
2. BIP-Specific Reporting Requirements
    In addition to the general Recovery Act reporting requirements, BIP 
awardees shall also report on the information requested below.
    a. Awardees must submit to RUS 30 calendar days after the end of 
each calendar year quarter, balance sheets, income statements, 
statements of cash flow, rate package summaries, and the number of 
customers taking broadband service on a per community basis utilizing 
RUS's Broadband Collection and Analysis System (BCAS). BCAS is an 
electronic reporting system that is accessed through the Internet.
    b. Annually on January 31, starting the first January 31 after 
completion of the project, awardees must submit to RUS, using the 
electronic reporting system provided by RUS:
    i. Number of households and businesses subscribing to broadband 
service;
    ii. Number of households and businesses subscribing to broadband 
service that receive improved access; and
    iii. Number of educational, library, health care, and public safety 
providers receiving either new or improved access to broadband service.
    c. Awardee shall specifically state in the applicable quarter when 
they have received 67 percent of the award funds. Reaching this 
threshold will indicate that the awardee has substantially completed 
its project.
3. BTOP-Specific Reporting Requirements
    In addition to the general Recovery Act reporting requirements, 
BTOP awardees must also report quarterly on the information requested 
below.\45\ The information requested will vary depending on the type of 
project being funded.
---------------------------------------------------------------------------

    \45\ See id. Sec.  6001(i)(2), 123 Stat. at 515.

---------------------------------------------------------------------------

[[Page 33125]]

a. All BTOP Awardees
    All BTOP awardees must report on:
    i. Their progress in achieving the project goals, objectives, and 
milestones as set forth in its application;
    ii. Expenditure of grant funds and how much of the award remains;
    iii. How much non-federal investment is being added to complete the 
project;
    iv. Whether the awardee is on schedule to substantially complete 
its projects within two years of the award and complete its project 
within three years of the award;
    v. The number and type of entities (as set forth in section 
6001(b)(3) and (4) of the Recovery Act) receiving new access to 
broadband services; and
    vi. The number and type of entities (as set forth in section 
6001(b)(3) and (4) of the Recovery Act) receiving improved access to 
broadband services.
    Awardees shall specifically state in the applicable quarter when 
they have met 67 percent of their milestones and received 67 percent of 
their award funds. Reaching these thresholds will indicate that the 
awardees have ``substantially completed'' their projects consistent 
with the Recovery Act.\46\
---------------------------------------------------------------------------

    \46\ Id. Sec.  6001(d)(3), 123 Stat. at 513.
---------------------------------------------------------------------------

b. BTOP Broadband Infrastructure Awardees
    Awardees receiving Last Mile or Middle Mile Broadband 
Infrastructure grants must report, for each specific BTOP project, on 
the following:
    i. The terms of any interconnection agreements entered into during 
the reporting period;
    ii. Traffic exchange relationships (e.g., peering) and terms;
    iii. Broadband equipment purchases;
    iv. Total and peak utilization of access links;
    v. Total and peak utilization on interconnection links to other 
networks;
    vi. Internet protocol address utilization and IPv6 implementation;
    vii. Any changes or updates to their network management practices;
    viii. Average end-user and middle mile megabit per second increase;
    ix. Availability of their broadband offering (including the 
technology used, location of infrastructure, area served, and the 
number of households passed);
    x. The total number of households and businesses subscribing to 
broadband service;
    xi. The number of households and businesses subscribing to new 
broadband service;
    xii. The number of households and businesses subscribing to 
broadband service that receive improved access;
    xiii. Advertised and averaged broadband speeds; and
    xiv. The price of the broadband services.
c. Public Computer Center Awardees
    Awardees receiving Public Computer Center grants must report on:
    i. The number of work stations available to the public;
    ii. The total hours of operation per week that the public computer 
center is open;
    iii. The speed of broadband to the public computer center;
    iv. The primary uses of the public computer center;
    v. The average number of users per day in the public computer 
center;
    vi. The total hours per week of training provided at the public 
computer center; and
    vii. the number and cost of any broadband equipment deployed.
d. Sustainable Broadband Adoption Awardees
    Awardees receiving Sustainable Broadband Adoption grants must 
report on:
    i. The technology being fostered;
    ii. Efforts to aggregate demand for each location, including the 
role of the local community;
    iii. The increase in the number of households, businesses, and 
community anchor institutions subscribing to broadband service;
    iv. The number and type of awareness campaigns provided, including 
the total number individuals reached; and
    v. The number and cost of any broadband customer premises equipment 
or end-user devices deployed.

X. Other Information

A. Funding Rounds

    Both agencies envision this as the first of three funding rounds. 
Subsequent rounds will be developed in part based on each agency's 
experience with this NOFA. While the fundamental nature of subsequent 
NOFAs is expected to remain similar, some additional targeting is 
anticipated. Potential applicants are urged to begin planning now in 
anticipation of future funding availability.

B. Discretionary Awards

    The government is not obligated to make any award as a result of 
this announcement, and will fund only projects that are deemed likely 
to achieve the program's goals and for which funds are available.

C. Third Party Beneficiaries

    The BTOP is a discretionary grant program that is not intended to 
and does not create any rights enforceable by third party 
beneficiaries.

D. Limitation on Expenditures

    The Recovery Act imposes an additional limitation on the use of 
funds expended or obligated from appropriations made pursuant to its 
provisions. Specifically, for purposes of this NOFA, none of the funds 
appropriated or otherwise made available under the Recovery Act may be 
used by any state or local government, or any private entity, for any 
casino or other gambling establishment, aquarium, zoo, golf course, or 
swimming pool.\47\
---------------------------------------------------------------------------

    \47\ Id. Sec.  1604, 123 Stat. at 303.
---------------------------------------------------------------------------

E. Recovery Act Logo

    All projects that are funded by the Recovery Act shall display 
signage that features the Primary Emblem throughout the construction 
phase. The signage should be displayed in a prominent location on site. 
Some exclusions may apply. The Primary Emblem should not be displayed 
at a size less than six inches in diameter.

F. Environmental and National Historic Preservation Requirements

    Awarding agencies are required to analyze the potential 
environmental impacts, as required by the NEPA and the NHPA for 
applicant projects or proposals seeking Recovery Act funding. All 
applicants are required to complete the Environmental Questionnaire 
under the description of program activities and to submit all other 
required environmental documentation during step two of the application 
process.
    It is the applicant's responsibility to obtain all necessary 
federal, state, and local governmental permits and approvals necessary 
for the proposed work to be conducted. Applicants are expected to 
design their projects so that they minimize the potential for adverse 
impacts to the environment. Applicants also will be required to 
cooperate with the granting agencies in identifying feasible measures 
to reduce or avoid any identified adverse environmental impacts of 
their proposed projects. The failure to do so may be grounds for not 
making an award.
    Applications will be reviewed to ensure that they contain 
sufficient information to allow agency staff to conduct a NEPA analysis 
so that appropriate NEPA documentation can be submitted to the 
agencies, along with

[[Page 33126]]

the recommendation for funding of the selected applications. Applicants 
proposing activities that cannot be covered by existing environmental 
compliance procedures will be informed after the technical review stage 
whether NEPA compliance and other environmental requirements can 
otherwise be expeditiously met so that a project can proceed within the 
timeframes anticipated under the Recovery Act.
    If additional information is required after an application is 
accepted for funding, funds can be withheld by the agencies under a 
special award condition requiring the awardee to submit additional 
environmental compliance information sufficient for the agency to make 
an assessment of any impacts that a project may have on the 
environment.

G. Davis-Bacon Wage Requirements

    Pursuant to section 1606 of the Recovery Act, any project using 
Recovery Act funds requires the payment of not less than the prevailing 
wages for ``all laborers and mechanics employed by contractors and 
subcontractors on projects funded directly by or assisted in whole or 
in part by and through the Federal Government.'' \48\
---------------------------------------------------------------------------

    \48\ Id. Sec.  1606, 123 Stat. at 303.
---------------------------------------------------------------------------

H. Financial and Audit Requirements

    To maximize the transparency and accountability of funds authorized 
under the Recovery Act, all applicants are required to comply with the 
applicable regulations set forth in OMB's Interim Final Guidance for 
Federal Financial Assistance.\49\
---------------------------------------------------------------------------

    \49\ See OMB, Interim Final Guidance for Federal Financial 
Assistance, 74 FR 18449 (Apr. 23, 2009).
---------------------------------------------------------------------------

    Recipients that expend $500,000 or more of federal funds during 
their fiscal year are required to submit an organization-wide financial 
and compliance audit report. The audit must be performed in accordance 
with the U.S. General Accountability Office, Government Auditing 
Standards, located at http://www.gao.gov/govaud/ybk01.htm, and OMB 
Circular A-133, Audits of States, Local Governments, and Non-Profit 
Organizations, located at http://www.whitehouse.gov/omb/circulars/a133/a133.html. Awardees are responsible for ensuring that sub-recipient 
audit reports are received and for resolving any audit findings.

I. Deobligation

    The RUS and NTIA reserve the right to deobligate awards to 
recipients under this NOFA that demonstrate an insufficient level of 
performance, or wasteful or fraudulent spending, and award these funds 
competitively to new or existing applicants.

J. Confidentiality of Applicant Information

    Applicants are encouraged to identify and label any confidential 
and proprietary information contained in their applications. The 
agencies will protect confidential and proprietary information from 
public disclosure to the fullest extent authorized by applicable law, 
including the Freedom of Information Act, as amended (5 U.S.C. 552), 
the Trade Secrets Act, as amended (18 U.S.C. 1905), and the Economic 
Espionage Act of 1996 (18 U.S.C. 1831 et seq.). Applicants should be 
aware, however, that the Recovery Act requires substantial 
transparency. For example, RUS and NTIA are required to make publicly 
available on the Internet a list of each entity that has applied for a 
grant, a description of each application, the status of each 
application, the name of each entity receiving funds, the purpose for 
which the entity is receiving the funds, each quarterly report, and 
other information.\50\
---------------------------------------------------------------------------

    \50\ See Recovery Act Sec.  6001(i)(5), 123 Stat. at 515.
---------------------------------------------------------------------------

K. Policy on Sectarian Activities

    NTIA encourages applications from faith-based organizations. On 
December 22, 1995, NTIA issued a Notice in the Federal Register on its 
policy with regard to sectarian activities. Under NTIA's policy, while 
religious activities cannot be the essential thrust of a grant, an 
application will be eligible for a grant under this program where 
sectarian activities are only incidental or attenuated to the overall 
project purpose for which funding is requested. Applicants for whom 
this policy may be relevant can access it through the Federal Register 
at 60 FR 66491 (Dec. 22, 1995).

L. Disposition of Unsuccessful Applications

    Applications accepted for review for the Fiscal Year 2009 BIP and 
BTOP programs will be retained for two years, after which they will be 
destroyed.

M. State Certifications

    With respect to funds made available under the Recovery Act to 
state or local governments for infrastructure investments, the 
governor, mayor, or other chief executive, as appropriate, must certify 
that the infrastructure investment has received the full review and 
vetting required by law and that the chief executive accepts 
responsibility that the infrastructure investment is an appropriate use 
of taxpayer dollars. This certification must include a description of 
the investment, the estimated total cost, and the amount of funds to be 
used, and must be posted on the recipient's Web site and linked to 
http://www.recovery.gov. A state or local agency may not receive 
infrastructure investment funding from funds made available under the 
Recovery Act unless this certification is made and posted.\51\
---------------------------------------------------------------------------

    \51\ See id. Sec. Sec.  1511, 1526, 123 Stat. at 287, 293.
---------------------------------------------------------------------------

N. Waiver Authority

    It is the general intent of NTIA not to waive any of the provisions 
set forth in this NOFA. However, under extraordinary circumstances and 
when it is in the best interest of the federal government, NTIA, upon 
its own initiative or when requested, may waive the provisions in this 
NOFA. Waivers may only be granted for requirements that are 
discretionary and not mandated by statute or other applicable law. Any 
request for a waiver must set forth the extraordinary circumstances for 
the request and be included in the application or sent to the address 
provided in section VI.E.

O. Compliance With Applicable Laws

    Any recipient of funds under this NOFA shall be required to comply 
with all applicable federal and state laws, including but not limited 
to: i. The nondiscrimination and equal employment opportunity 
requirements of Title VI of the Civil Rights Act of 1964, as amended 
(42 U.S.C. 2000e et seq., 7 CFR pt. 15); ii. section 504 of the 
Rehabilitation Act (29 U.S.C. 794 et seq.; 7 CFR pt. 15b); iii. The Age 
Discrimination Act of 1975, as amended (42 U.S.C. 6101 et seq.; 45 CFR 
pt. 90); iv. Executive Order 11375, amending Executive Order 11246, 
Relating to Equal Employment Opportunity (3 CFR pt. 102). See 7 CFR 
pts. 15 and 15b and 45 CFR pt. 90, RUS Bulletin 1790-1 
(``Nondiscrimination among Beneficiaries of RUS Programs''), and RUS 
Bulletin 20-15:320-15 (``Equal Employment Opportunity in Construction 
Financed with RUS Loans''). The RUS Bulletins are available at http://www.broadbandusa.gov.; v. The Architectural Barriers Act of 1968, as 
amended (42 U.S.C. 4151 et seq.); vi. The Uniform Federal Accessibility 
Standards (UFAS) (Appendix A to 41 CFR subpart 101-19.6); and vii. The 
Council on Environmental Quality Regulations for Implementing the 
Procedural Provisions of NEPA and

[[Page 33127]]

certain related federal environmental laws, statutes, regulations, and 
Executive Orders found in 7 CFR 1794. A more complete list of such 
requirements can be found in the applicable grant agreement or loan 
contract.

P. Communications Laws

    Awardees, and in particular, Broadband Infrastructure awardees, 
will be required to comply with all applicable federal and state 
communications laws and regulation as applicable, including, for 
example, the Communications Act of 1934, as amended (47 U.S.C. 151 et 
seq.), the Telecommunications Act of 1996, as amended (Pub. L. 104-104, 
110 Stat. 56 (1996), and the Communications Assistance for Law 
Enforcement Act (47 U.S.C. 1001 et seq.) (CALEA). For further 
information, see http://www.fcc.gov.

Q. Buy American Notice

1. General Prohibition and Waiver
    None of the funds appropriated or otherwise made available by the 
Recovery Act may be used for the construction, alteration, maintenance, 
or repair of a public building or public work (as such terms are 
defined in 2 CFR 176.140) unless all of the iron, steel, and 
manufacturing goods used in the project are produced in the United 
States.\52\ On July 1, 2009, the Department of Agriculture and the 
Department of Commerce published notices in the Federal Register 
stating that the Secretary of Agriculture and Secretary of Commerce 
have separately reached conclusions that applying the Buy American 
provision for the use of certain broadband equipment in public BIP and 
BTOP projects would be inconsistent with the public interest.
---------------------------------------------------------------------------

    \52\ Id. Sec.  1605, 123 Stat. at 303.
---------------------------------------------------------------------------

    As explained below, to the extent that an applicant wishes to use 
broadband equipment or goods that are not covered by the Secretaries' 
waivers, it may seek an additional waiver on a case-by-case basis as 
part of its application for Recovery Act funds.
2. OMB Buy American Notice Requirement
    Pursuant to OMB guidance on the Recovery Act,\53\ RUS and NTIA are 
required to provide the following notice:
---------------------------------------------------------------------------

    \53\ See 2 CFR pt. 176.
---------------------------------------------------------------------------

Section 176.170 Notice of Required Use of American Iron, Steel, and 
Manufactured Goods (Covered Under International Agreements)--Section 
1605 of the American Recovery and Reinvestment Act of 2009

    When requesting applications or proposals for Recovery Act programs 
or activities that may involve construction, alteration, maintenance, 
or repair of a public building or public work, and involve iron, steel, 
and/or manufactured goods covered under international agreements, the 
agency shall use the notice described in the following paragraphs in 
the solicitation:
    (a) Definitions. Designated country iron, steel, and/or 
manufactured goods, foreign iron, steel, and/or manufactured good, 
manufactured good, public building and public work, and steel, as used 
in this provision, are defined in 2 CFR 176.160(a).
    (b) Requests for determinations of inapplicability. A prospective 
applicant requesting a determination regarding the inapplicability of 
section 1605 of the American Recovery and Reinvestment Act of 2009 
(Pub. L. 111-5) (Recovery Act) should submit the request to the award 
official in time to allow a determination before submission of 
applications or proposals. The prospective applicant shall include the 
information and applicable supporting data required by 2 CFR 176.160(c) 
and (d) in the request. If an applicant has not requested a 
determination regarding the inapplicability of section 1605 of the 
Recovery Act before submitting its application or proposal, or has not 
received a response to a previous request, the applicant shall include 
the information and supporting data in the application or proposal.
    (c) Evaluation of project proposals. If the Federal Government 
determines that an exception based on unreasonable cost of domestic 
iron, steel, and/or manufactured goods applies, the Federal Government 
will evaluate a project requesting exception to the requirements of 
section 1605 of the Recovery Act by adding to the estimated total cost 
of the project 25 percent of the project cost if foreign iron, steel, 
or manufactured goods are used based on unreasonable cost of comparable 
domestic iron, steel, or manufactured goods.
    (d) Alternate project proposals.
    (1) When a project proposal includes foreign iron, steel, and/or 
manufactured goods, other than designated country iron, steel, and/or 
manufactured goods, that are not listed by the Federal Government in 
this Buy American notice in the request for applications or proposals, 
the applicant may submit an alternate proposal based on use of 
equivalent domestic or designated country iron, steel, and/or 
manufactured goods.
    (2) If an alternate proposal is submitted, the applicant shall 
submit a separate cost comparison table prepared in accordance with 
paragraphs 2 CFR 176.160(c) and (d) for the proposal that is based on 
the use of any foreign iron, steel, and/or manufactured goods for which 
the Federal Government has not yet determined an exception applies.
    (3) If the Federal Government determines that a particular 
exception requested in accordance with 2 CFR 176.160(b) does not apply, 
the Federal Government will evaluate only those proposals based on use 
of the equivalent domestic or designated country iron, steel, and/or 
manufactured goods, and the applicant shall be required to furnish such 
domestic or designated country items.

R. Executive Order 12866

    This notice has been determined to be ``economically significant'' 
under Executive Order 12866. The Recovery Act appropriates $4.7 billion 
to NTIA for broadband grants and other purposes. The Recovery Act also 
appropriates $2.5 billion to RUS for broadband grants and loans. Awards 
must be made no later than September 30, 2010. In accordance with 
Executive Order 12866, an economic analysis was completed outlining the 
costs and benefits of implementing each of these programs. The complete 
analyses are available from RUS and NTIA, respectively, upon request.

S. Executive Order 13132

    It has been determined that this notice does not contain policies 
with federalism implications as that term is defined in Executive Order 
13132.

T. Administrative Procedure Act Statement

    This NOFA is being issued without advance rulemaking or public 
comment. The Administrative Procedure Act of 1946, as amended (5 U.S.C. 
553) (APA), has several exemptions to rulemaking requirements. Among 
them is an exemption for ``good cause'' found at 5 U.S.C. 553(b)(B), 
which allows effective government action without rulemaking procedures 
where withholding the action would be ``impracticable, unnecessary, or 
contrary to the public interest.''
    USDA and the DOC have determined, consistent with the APA that 
making these funds available under this NOFA for broadband development, 
as

[[Page 33128]]

mandated by the Recovery Act, is in the public interest. Given the 
emergency nature of the Recovery Act and the extremely short time 
period within which all funds must be obligated, withholding this NOFA 
to provide for public notice and comment would unduly delay the 
provision of benefits associated with these broadband initiatives and 
be contrary to the public interest.
    For the same reasons, the agencies find good cause under 5 U.S.C. 
553(d)(3) to waive the 30-day delay in effectiveness for this action. 
Because notice and opportunity for comment are not required pursuant to 
5 U.S.C. 553(d)(3) or any other law, the analytical requirements of the 
Regulatory Flexibility Act of 1980, as amended (5 U.S.C. 601 et seq.) 
are inapplicable. Therefore, a regulatory flexibility analysis is not 
required and has not been prepared.

U. Congressional Review Act

    NTIA has submitted this NOFA to the Congress and the Government 
Accountability Office under the Congressional Review of Agency 
Rulemaking Act, 5 U.S.C. 801 et seq. It has been determined that this 
NOFA is a ``major action'' within the meaning of the Act because it 
will result in an annual effect on the economy of $100,000,000 or more. 
This NOFA sets out the administrative procedures for making grants, 
loans, and loan/grant combinations totaling $3 billion to implement a 
nationwide broadband initiative to expand the reach and quality of 
broadband services in the United States.
    With funds made available through the Recovery Act, BIP will 
provide $2.5 billion of budget authority for RUS to extend grants, 
loans, and loan/grant combinations to facilitate broadband deployment 
in rural areas. At the same time, BTOP will provide $4.7 billion 
through NTIA to provide broadband grants throughout the United States 
for unserved and underserved communities, to increase public computer 
center capacity, and to encourage sustainable adoption of broadband 
services. The Recovery Act provides that BTOP awards must be made no 
later than September 30, 2010. Moreover, projects funded under these 
programs must be substantially completed no later than two years 
following the date of issuance of the award. A 60-day delay in 
implementing this NOFA would hamper RUS and NTIA's missions to 
expeditiously provide assistance to eligible entities to begin and 
complete projects within the statutory requirements of the Recovery 
Act.
    Thus, RUS and NTIA find good cause under 5 U.S.C. 808(2) that prior 
notice and public procedure are impracticable, unnecessary, and 
contrary to the public interest. To the extent that RUS and NTIA 
provided a 60-day delay in effectiveness pursuant to the Congressional 
Review Act, the agencies would not be able to execute the statutory 
duties required by the Recovery Act in a timely manner. This finding is 
consistent with the objectives of the Recovery Act, which specifically 
provides clear preferences for rapid agency action and quick-start 
activities designed to spur job creation and economic benefit. 
Accordingly, this NOFA shall take effect upon publication in the 
Federal Register.

V. Paperwork Reduction Act

1. Reporting and Registration Requirement Under Section 1512 of the 
Recovery Act

    a. This award requires the recipient to complete projects or 
activities which are funded under the Recovery Act and to report on use 
of Recovery Act funds provided through this award. Information from 
these reports will be made available to the public.
    b. The first report is due no later than ten calendar days after 
the initial calendar quarter in which the recipient receives the 
assistance award funded in whole or in part by the Recovery Act, or by 
October 10, 2009. Thereafter, reports shall be submitted no later than 
the tenth day after the end of each calendar quarter.
    c. Recipients and their first-tier recipients must maintain current 
registrations in the CCR (http://www.ccr.gov) at all times during which 
they have active federal awards funded with Recovery Act funds. A DUNS 
number is one of the requirements for registration in the CCR.
    d. The recipient shall report the information described in section 
1512(c) using the reporting instructions and data elements that will be 
provided online at http://www.FederalReporting.gov, unless the 
information is pre-populated.

2. Agencies' Additional Paperwork Reduction Act Analysis

    Copies of all forms, regulations, and instructions referenced in 
this NOFA may be obtained from RUS or NTIA. Data furnished by the 
applicants will be used to determine eligibility for program benefits. 
Furnishing the data is voluntary; however, the failure to provide data 
could result in program benefits being withheld or denied.
    The collection of information is vital to RUS and NTIA to ensure 
compliance with the provisions of this Notice and to fulfill the 
requirements of the Recovery Act. In summary, the collection of 
information is necessary in order to implement this program.
    The following estimates are based on the average over the first 
three years the program is in place.
    BIP Infrastructure:
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 116 hours per response.
    Respondents: Business or other for profits; Not-for-profit 
institutions; and State, local, and Tribal.
    Estimated Number of Respondents: 500.
    Estimated Number of Responses per Respondent: 3.28.
    Estimated Number of Responses: 1,639.
    Estimated Total Annual Burden (hours) on Respondents: 189,837.
    BTOP Infrastructure:
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 117 hours per response.
    Respondents: 1,500.
    Estimated Number of Respondents: 1,500.
    Estimated Number of Responses per Respondent: 2.11.
    Estimated Number of Responses: 3,164.
    Estimated Total Annual Burden (hours) on Respondents: 371,187.
    Public Computer Center:
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 47.6 hours per response.
    Respondents: 2,500.
    Estimated Number of Respondents: 2,500.
    Estimated Number of Responses per Respondent: 1.1.
    Estimated Number of Responses: 2,750.
    Estimated Total Annual Burden (hours) on Respondents: 130,750.
    Sustainable Adoption:
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 23.9 hours per response.
    Respondents: 2,500.
    Estimated Number of Respondents: 2,500.
    Estimated Number of Responses per Respondent: 1.1.
    Estimated Number of Responses: 2,750.
    Estimated Total Annual Burden (hours) on Respondents: 65,750.
    Copies of this information collection can be obtained from Michele 
Brooks,

[[Page 33129]]

Rural Utilities Service, at (202) 690-1078 and Gwellnar Banks, DOC/OS, 
at (202) 482-3781.
    Comments. Comments are invited regarding: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of RUS or NTIA, including whether the information will 
have practical utility; (b) the accuracy of the agencies' estimate of 
the burden of the proposed collection of information including the 
validity of the methodology and assumptions used; (c) ways to enhance 
the quality, utility and clarity of the information to be collected; 
and (d) ways to minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology. Comments for BIP 
may be sent to Michele Brooks, Rural Utilities Service, USDA, Rural 
Development, Stop 1530, 1400 Independence Ave., SW., Washington, DC 
20250-1530 and for BTOP to Gwellnar Banks, 1401 Constitution Avenue, 
NW., Washington, DC 20230. All responses to this Notice will be 
summarized and included in the request for OMB approval. All comments 
will also become a matter of public record.
    The grant application forms for BTOP Infrastructure, Public 
Computer Centers, and Sustainable Broadband Adoption projects and the 
subsequent step two filing are being reviewed and will be approved by 
the Office of Management and Budget under the Paperwork Reduction Act 
of 1995. OMB control numbers will be assigned and published in separate 
Federal Register notices. Notwithstanding any other provision of law, 
no person is required to respond to, nor shall any person be subject to 
a penalty for failure to comply with a collection of information 
subject to the Paperwork Reduction Act unless that collection displays 
a currently valid OMB Control Number.

W. Recovery Act

    Additional information about the Recovery Act is available at 
http://www.Recovery.gov.

X. Authorized Signatories

    Only authorized grant and loan officers can bind the Government to 
the expenditure of funds.

Appendix to Notice of Funds Availability--Broadband Initiatives Program 
and Broadband Technology Opportunities Program

Policy Justification

Definition of ``Broadband''
    BTOP contains five core purposes, all of which relate to deployment 
of, access to, or support for ``broadband service.'' \1\ The Recovery 
Act does not expressly define the term ``broadband,'' instead it tasks 
NTIA with defining what constitutes a ``broadband service'' eligible 
for BTOP support. The Recovery Act expands RUS's existing authority to 
make loans and provides new authority to make grants to facilitate 
broadband deployment in rural areas. Thus, the term ``broadband'' 
figures prominently in both agencies' statutory purposes and requires 
that RUS and NTIA agree to a common understanding of the term.
---------------------------------------------------------------------------

    \1\ See Recovery Act Sec.  6001(b), 123 Stat. at 512.
---------------------------------------------------------------------------

    Most commenters suggest a minimum transmission speed, ranging from 
200 kilobits per second (kbps) \2\ to over 100 megabits per second 
(mbps).\3\ A substantial contingent encourage NTIA to adopt a minimum 
speed of 768 kbps downstream, equivalent to the ``Tier 1'' threshold in 
the current FCC broadband data collection process.\4\ Many commenters 
encourage additional consideration for applicants promising speeds 
greater than the minimum.\5\ Some commenters prefer that NTIA evaluate 
speed against the project's overall benefits,\6\ establish different 
speeds for rural and urban areas,\7\ or establish different speeds for 
different price points.\8\ Some wireless providers argue for different 
speed thresholds for wireless and fixed services.\9\ Other commenters 
favor a definition of broadband based upon the applications that would 
be supported.\10\ A number of commenters favor symmetrical speeds,\11\ 
but many providers claim that asymmetrical technologies are often more 
cost effective and efficient.\12\ Several commenters encourage NTIA to 
consider latency in addition to bandwidth when evaluating 
proposals.\13\ Several also encourage NTIA to consider not only current 
demand, but also the needs of future consumers.\14\
---------------------------------------------------------------------------

    \2\ See Harris Corp. at 8-9 (Apr. 13, 2009); Independent 
Telephone & Telecommunications Alliance (ITTA) at 4 (Apr. 13, 2009).
    \3\ See Virginia Internet Service Providers Alliance at 5 (Apr. 
10, 2009).
    \4\ See, e.g., Farmers Mutual Telephone Company (Farmers Mutual) 
at 12 (Apr. 13, 2009); Motorola, Inc. at 9 (Apr. 13, 2009); 
Gardonville Cooperative Telephone Association (Gardonville Coop.) at 
12 (Apr. 13, 2009); Northern Valley Communications (Northern Valley) 
at 10 (Apr. 13, 2009); AT&T at 10-11 (Apr. 13, 2009); Progress & 
Freedom Foundation at 5 (Apr. 10, 2009); Telecommunications Industry 
Association (TIA) at 13 (Apr. 10, 2009); Free Press at 13 (Apr. 13, 
2009) (proposing a reduction in points for ``networks that are 
highly asymmetric''); WildBlue Communications at 4-5 (Apr. 13, 
2009); Harris Corp. at 8-9; Alcatel-Lucent Corp. (Alcatel-Lucent) at 
27 (Apr. 13, 2009); Western Telecommunications Alliance at 4-5 (Apr. 
10, 2009); Cricket Communications (Cricket) at 8 (Apr. 13, 2009).
    \5\ See, e.g., AT&T at 10-11.
    \6\ See, e.g., Native American Telecom at 5 (Apr. 13, 2009); 
Alaska Communications Systems at 10 (Apr. 13, 2009).
    \7\ See, e.g., Joe Cremin of Starwire Technologies in webform 
(Apr. 8, 2009).
    \8\ See, e.g., Rural Telecommunications Congress at 9 (Apr. 13, 
2009).
    \9\ See, e.g., Wireless Communications Association 
International, Inc. (WCA) at 3 (Apr. 9, 2009); Utopian Wireless 
Corp. at 3 (Apr. 13, 2009); Alvarion, Inc. at 9 (Apr. 14, 2009).
    \10\ See, e.g., Buck Graham of Occam Networks (Graham) in 
webform (recommending 5 Mbps bi-directional) (Mar. 18, 2009); 
EvenLink, LLC at 3 (Apr. 13, 2009) (advocating a standard of 5 mbps 
bi-directional, but suggesting a lower-speed definition for rural 
areas); William Wells Jr. of True Broadband Networks (Wells) (Mar. 
17, 2009) (advocating a standard of 10 mbps bi-directional to 
``allow real-time bi-directional transmission of simultaneous voice, 
video and data services'').
    \11\ See, e.g., Link Shadley at 1 (Mar. 20, 2009); Stratum 
Broadband at 32 (Mar. 31, 2009); Univ. of Nebraska at 6 (Apr. 10, 
2009); Graham at webform; Wells at webform; U.S. TelePacific et al. 
at 3-4, 6 (Apr. 13, 2009) (discussing business users' need for 
symmetrical speeds for video teleconferencing, multiline VOIP, web 
hosting, and large email files).
    \12\ See, e.g., ITTA at 35-36 (arguing that an asymmetrical 
threshold would be ``consistent with the preferences expressed by 
consumers and providers alike through their behavior in the 
market''); WCA at 12 (``requiring symmetrical speeds for all product 
markets would disserve consumers and would not be technologically 
neutral''); Starwire at webform; General Communication, Inc. (GCI) 
at 14-15 (Apr. 13, 2009); NetAccess System Technologies (NetAccess) 
at 9 (Apr. 10, 2009).
    \13\ See, e.g., Regulatory Commission of Alaska at 12 (Apr. 13, 
2009); Michael Blair of Blair Technologies at webform; Univ. of 
Nebraska at 2 (stating that grant selection ``[c]riteria should 
include speed, price/Mbps, latency, reliability, interoperability, 
coverage, sustainability, current capacity and growth capacity''); 
Libbey Scheible of INOSS, Inc. (INOSS) at 6-7, 10 (suggesting a 
minimum latency of 20 milliseconds) (Apr. 10, 2009); ADTRAN at 
Appendix 1 (Apr. 13, 2009).
    \14\ See, e.g., Montana Independent Telecom Systems at 3 
(referring to ``the anticipated requirements for tomorrow's 
applications and consumers'') (Apr. 13, 2009); Fiber Tower Corp. at 
11-12 (Apr. 13, 2009).
---------------------------------------------------------------------------

    RUS and NTIA conclude that ``broadband service'' should be defined 
as the provision of two-way data transmission with advertised speeds of 
at least 768 kilobits per second (kbps) downstream and 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.
    RUS and NTIA favor this broadband speed threshold because it 
leverages the FCC's expertise, utilizes an established standard, 
facilitates the use of many

[[Page 33130]]

currently common broadband applications (e.g., web browsing, VOIP, and 
one-way video), allows for consideration of cost-effective solutions 
for difficult-to-serve areas, and is the most technology-neutral option 
(because it encompasses all major wired and wireless technologies). For 
these same reasons, RUS and NTIA decline to impose a latency 
requirement or technology-specific definitions. RUS and NTIA intend to 
provide additional consideration to applications exceeding the minimum 
speed threshold or offering superior upgradeability. This approach 
offers the greatest flexibility for the agencies and simplicity for 
applicants, while still expressing a preference for higher-capacity 
projects. An area that has access to service at 768 kbps may still 
qualify as ``underserved,'' and an area that has only high-latency 
satellite service will still qualify as ``unserved.''
Definition of ``Unserved''
    One of the five core purposes of BTOP is ``to provide access to 
broadband service to consumers residing in unserved areas of the United 
States.'' \15\ The Recovery Act does not expressly define the term 
``unserved,'' instead it tasks NTIA with developing a definition that 
targets specific geographic areas and advances the program's purposes. 
Grants under RUS's Broadband Initiatives Program (BIP) are to be used 
to provide funds to applications proposing to exclusively serve remote, 
``unserved'' rural areas.
---------------------------------------------------------------------------

    \15\ Recovery Act Sec.  6001(b)(1), 123 Stat. at 512.
---------------------------------------------------------------------------

    The majority of commenters favor defining ``unserved area'' as a 
whole area lacking access to a certain quality of Internet service,\16\ 
or lacking access to technologies other than dial-up and satellite 
service.\17\ Some commenters, however, offer definitions based on a 
percentage of the population lacking such access.\18\ Some suggest that 
an area should be considered unserved if no mobile wireless broadband 
service is available.\19\ Finally, still others encourage the adoption 
of a definition of ``unserved area'' that encompasses communities where 
broadband infrastructure is available, but where barriers such as 
affordability effectively prevent residents from receiving broadband 
service.\20\
---------------------------------------------------------------------------

    \16\ See, e.g., Farmers Mutual at 12 (less than 768 kbps bi-
directional peak load); American Fiber Systems at 4 (Apr. 13, 2009) 
(10 mbps or less from 2 or fewer providers); ATSI Communications, 
Inc. at 11 (Apr. 13, 2009) (no provider of duplex broadband at more 
than 256 kpbs in either direction).
    \17\ See, e.g., Alaska Federation of Natives at 8 (Apr. 13, 
2009); Michigan Public Service Commission (Michigan PSC) at 19 (Apr. 
13, 2009); Communications Workers of America (CWA) at 21-22 (Apr. 
13, 2009); Univ. of Nebraska at 1; NetAccess at 9.
    \18\ See, e.g., XO Communications, LLC and Nextlink Wireless, 
Inc. (XO and Nextlink) at 7 (Apr. 13, 2009) (90% of consumers to be 
served lack access to a provider of Current Generation Broadband 
Transmission Service, to be defined separately for wireline/fixed 
access and mobile wireless); Premium Choice Broadband at 3 (less 
than 25% availability of 768 kbps); Fiber-to-the-Home Council (FTTH 
Council) at 9 (Apr. 13, 2009) (20% lack access to broadband).
    \19\ See, e.g., WCA at 10.
    \20\ See, e.g., City and County of San Francisco (San Francisco) 
at 25 (Apr. 13, 2009) (``If broadband service is not affordable, it 
effectively is not available.''); Institute for Local Self-Reliance 
at 8 (Apr. 13, 2009).
---------------------------------------------------------------------------

    RUS and NTIA conclude that an appropriate definition of ``unserved 
area'' is a proposed funded service area (i.e., one or more contiguous 
census blocks, as discussed below) where at least 90 percent of 
households lack access to facilities-based, terrestrial broadband 
service, either fixed or mobile, at the minimum broadband transmission 
speed of 768 kbps downstream and 200 kbps upstream. A household has 
access to such broadband service if it can readily subscribe to that 
service upon request.
    Defining an unserved area by reference to the definition of 
broadband that RUS and NTIA adopt will ensure consistency between the 
needs in areas targeted for infrastructure funding and the improved 
access that will be provided by infrastructure projects that receive 
grants. RUS and NTIA believe that a definition requiring that 100 
percent of households lack access to broadband service could prove 
overly restrictive and risk inadvertently excluding populations that 
should properly fall within the ``unserved'' definition. For example, 
an area should not be considered served merely because one or two 
households in that area have access to broadband service. Establishing 
a 90 percent threshold acknowledges that a de minimis level of 
broadband service may exist in portions of the area, while also seeking 
to minimize the risk of unintentionally excluding an entire area from 
funding under the BTOP program.
    RUS and NTIA do not include existing satellite service in defining 
whether a given area is unserved, even though such service may meet the 
threshold speed level to qualify as broadband service under the 
definition adopted in this NOFA. Because the general reach of satellite 
service can extend to the entire country, it is excluded as a factor in 
the unserved definition to avoid a finding that no area in the United 
States would be considered unserved. Such a finding would render the 
term meaningless.
Definition of ``Underserved''
    Another of BTOP's five core purposes is to ``provide improved 
access to broadband service to consumers residing in underserved areas 
of the United States.'' \21\ The term ``underserved'' is not a common 
term in telecommunications, although it is commonly applied in other 
fields, such as healthcare, education, social services and retail, to 
denote populations lacking access to critical services. As with the 
``unserved'' definition, the Recovery Act does not define 
``underserved,'' instead it tasks NTIA with developing a definition 
that targets specific geographic areas and advances the program's 
purposes. Under RUS's BIP program, loan and loan/grant combination 
funds are to be used to provide funding to applications proposing to 
serve non-remote and ``underserved'' rural areas.
---------------------------------------------------------------------------

    \21\ Recovery Act Sec.  6001(b)(2), 123 Stat. at 512.
---------------------------------------------------------------------------

    The majority of commenters favor definitions based on one or more 
of the following factors: availability of broadband service at a 
certain threshold speed,\22\ affordability,\23\ number of broadband 
service providers,\24\ and

[[Page 33131]]

subscribership or adoption rates.\25\ Some commenters also suggest 
definitions that would include areas where major community institutions 
lack sufficient broadband access.\26\ Several others also encourage the 
agencies to consider the particular needs of public safety.\27\ Many 
commenters propose multi-pronged definitions that include multiple ways 
an area could qualify as underserved \28\ while others argue that the 
agencies should adopt a presumption that certain types of areas are 
underserved.\29\
---------------------------------------------------------------------------

    \22\ See, e.g., American Fiber Systems at 4 (defining 
``underserved area'' as a ``geographical area where 90% or less of 
the population currently has access to a service at a speed less 
than 100 megabits from a single provider''); Gardonville Coop. at 12 
(defining ``underserved area'' as an area ``currently only able to 
receive broadband service at a speed of 768 Kbps to less than 12 
Mbps, bi-directional, during peak-hour load''); WCA at 4 (suggesting 
that a market is underserved if it ``does not have access to mobile 
wireless broadband capable of delivering at least 3 mbps downlink 
and 768 kbps uplink speeds''); Nebraska Rural Independent Companies 
at 9 (Apr. 13, 2009) (defining ``underserved area'' as ``any 
geographical area * * * where only broadband service with download 
speeds between 56 Kbps and 768 Kbps exist today''); National Cable & 
Telecommunications Association (NCTA) at 23 (Apr. 13, 2009) (``An 
`underserved area' should be defined as an area where no households 
have access to at least one provider of Internet access with current 
generation broadband transmission speeds, e.g., maximum transmission 
speeds of at least 3 Mbps downstream and 768 kbps upstream. 
Satellite broadband service, which already is available throughout 
most of the country, should not be considered in applying this 
definition.'').
    \23\ See, e.g., National Association of Telecommunications 
Officers and Advisors (NATOA) at 34 (``Unaffordable broadband 
services are unavailable.''); Cricket at 3 (``For millions of 
Americans * * * both wireline and wireless service options may be 
available just outside their door, but they nevertheless remain 
hopelessly out of reach at current prices or terms of service.''); 
Consortium for School Networking et al. at 6 (Apr. 13, 2009).
    \24\ See, e.g., JAB Wireless, Inc. at 2 (Apr. 9, 2009) (``An 
underserved area should be defined as an area where a resident does 
not have a choice of at least 2 broadband service providers 
providing minimum speeds of 3 Meg down.''); segTEL at 7-8 (Apr. 13, 
2009); U.S. Telepacific et al. at 5.
    \25\ See, e.g., Wisconsin Department of Commerce at 2 (Apr. 8, 
2009) (``An `underserved area' should be defined as an applicant 
area in which at least 50% of households do not subscribe to a cable 
or DSL broadband service provider, regardless of whether or not 
broadband service is available, or an applicant area in which at 
least 50% of households have access to no more than one broadband 
internet service provider.''); New Jersey Division of Rate Counsel 
at 2 (Apr. 8, 2009); One Economy Corporation at 4 (Apr. 13, 2009); 
Association of Public Television Stations at 9 (Apr. 13, 2009); San 
Francisco at 23-24.
    \26\ See, e.g., FTTH Council at 11 (``Underserved area means * * 
* a geographic area described by Census Tracts where more than 25% 
of the Community Anchor Institutions to be served by the project 
currently lack access to a provider of Advanced Broadband Wireline 
Service); eCLIC, the Emergency Communications Leadership and 
Innovation Center at 5 (Apr. 8, 2009) (`` `Underserved' would be any 
area lacking a digital hub and/or broadband infrastructure 
connecting LANs inside the rooms and grounds of schools, libraries, 
public safety and governmental institutions.''); AT&T at 12.
    \27\ See, e.g., Intrado Inc. and Intrado Communications Inc. at 
5-6; National Emergency Number Association at 17 (Apr. 13, 2009).
    \28\ See, e.g., XO and Nextlink at 8 (``Underserved Area means: 
(1)(i) a geographic area that is not an unserved area where at least 
90% of the customers to be served by the project lack access to more 
than one provider of Current Generation Broadband Transmission 
Service (which is to be determined separately for wireline/fixed 
wireless or mobile wireless providers) or (ii) a geographic area 
that is not an unserved area where at least 90% of the customers to 
be served by the project lack access to a provider of Advanced 
Broadband Transmission Service (which is to be determined separately 
for wireline/fixed wireless or mobile wireless providers); (2) a 
geographic area where at least 90% of the Community Anchor 
Institutions to be served by the project lack access to a provider 
of wireline/fixed wireless Advanced Broadband Transmission Service; 
or (3) any census tract which is located in (i) an empowerment zone 
or enterprise community designated under section 1391, (ii) the 
District of Columbia Enterprise Zone established under section 1400, 
(iii) a renewal community designated under section 1400E, or (iv) a 
low-income community designated under section 45D.'').
    \29\ See, e.g., Matthew R. Rantanen, Director of Technology, 
Southern California Tribal Chairmen's Association in webform (Apr. 
13, 2009) (tribal lands); Pulse Broadband LLC at 4-5 (Apr. 13, 2009) 
(rural areas); Broadpoint, Inc. at 4 (Apr. 13, 2009) (the Gulf of 
Mexico).
---------------------------------------------------------------------------

    Several commenters urge the adoption of a separate definition of 
``underserved'' for broadband adoption programs, focusing on the 
characteristics of the population to be served rather than on the 
characteristics of a geographic area.\30\ Many commenters draw 
attention to types of users they believe should be considered 
underserved.\31\
---------------------------------------------------------------------------

    \30\ See, e.g., ZeroDivide at 13 (Apr. 13, 2009) (citing 
``barriers to adoption including, race, ethnicity, language, 
physical capacity, economic conditions, and geography'' and ``low-
income population as determined by state or federal guidelines, such 
as residents of low-income housing, area with a high rate of 
participation in free and reduced price lunch/breakfast program''); 
Michigan PSC at 19. But see, e.g., Free Press at 6 (``Using the 
income of an area as the basis for an `underserved' definition is 
common in markets such as health care but is perhaps less fitting 
for infrastructure-based services such as broadband.'').
    \31\ See, e.g., City of Milwaukee in web form (Apr. 13, 2009) 
(citing ``computer literacy, internet literacy, ethnic and language 
diversity''); Carl and Ruth Shapiro Family National Center for 
Accessible Media at WGBH (NCAM) and Inclusive Technologies at 5-6 
(Apr. 13, 2009) (``People with disabilities MUST be included in the 
definition of the underserved and unserved population and inclusion 
of their needs should be explicitly stated in all RFPs issued by 
NTIA.''); Covad Communications Co. at 4 (Apr. 10, 2009) (urging NTIA 
to deem all small businesses underserved); NCTA at 23 (``[B]efore 
funding construction in underserved areas, NTIA and RUS should 
provide funding for programs that assist underserved populations 
(low-income, seniors) to acquire and make use of broadband 
service.'').
---------------------------------------------------------------------------

    RUS and NTIA conclude that the extent to which a proposed funded 
service area is underserved will be evaluated using several criteria 
that are grouped to reflect the two distinct components of the 
Broadband Infrastructure category of eligible projects--Last Mile and 
Middle Mile (as defined in this NOFA)--and take account of both 
advertised broadband speeds and availability of broadband service. 
Specifically, a proposed funded service area (i.e., one or more 
contiguous census blocks) may qualify as underserved for Last Mile 
projects if at least one of the following factors is met, though the 
presumption will be that more than one factor is present: i) no more 
than 50 percent 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 of 768 kbps 
downstream and 200 kbps upstream; ii) no fixed or mobile broadband 
service provider advertises broadband transmission speeds of at least 
three megabits per second (``mbps'') downstream in the proposed funded 
service area; or iii) the rate of broadband subscribership for the 
proposed funded service area is 40 percent of households or less. A 
proposed funded service area may qualify as underserved for Middle Mile 
projects if one interconnection point terminates in a proposed funded 
service area that qualifies as unserved or underserved for Last Mile 
projects.
    RUS and NTIA recognize that in some areas of the country, 
particularly in rural areas, many of the underserved criteria for Last 
Mile projects will apply. The underserved definition includes a 
broadband speed criterion to recognize that a proposed funded service 
area can have the minimum level of broadband service available (defined 
as 768 kbps downstream and 200 kbps upstream), but still be considered 
``underserved.'' NTIA and RUS do not want to exclude proposals to 
improve the broadband speeds available in a proposed funded service 
area simply because the threshold broadband speed is already available.
    RUS and NTIA decline to define ``underserved'' according to 
particular pricing plans, median income, or demographic characteristics 
because the adopted definition uses the criteria of low levels of 
broadband subscribership as a proxy for these factors. Studies suggest 
a strong, direct correlation between income levels and broadband 
subscribership; thus, lower broadband subscribership rates will tend to 
reflect lower income households. Low broadband subscribership rates 
also tend to be seen among seniors, minorities, and other vulnerable or 
disadvantaged population groups.
    NTIA will use the definition of ``underserved'' only for purposes 
of evaluating Broadband Infrastructure proposals under BTOP. For Public 
Computer Center and Sustainable Broadband Adoption proposals, NTIA will 
evaluate the characteristics of the population to be served, rather 
than the Internet services available, in the geographic areas where the 
programs are located. Service to vulnerable (rather than 
``underserved'') populations will be a critical factor in evaluating 
such proposals. NTIA, therefore, interprets comments advocating 
inclusion of certain categories of users as ``underserved'' for the 
purposes of such programs as arguments for recognition of these 
categories as ``vulnerable populations.'' \32\
---------------------------------------------------------------------------

    \32\ See, e.g., Barling Bay, LLC and Caption Colorado at 13-14 
(Apr. 13, 2009) (arguing for recognition of deaf and hard of hearing 
students and rural students in poor school districts as unserved or 
underserved for purposes of broadband adoption programs).
---------------------------------------------------------------------------

Utilizing Census Blocks To Define Proposed Funded Service Areas

    The geographic area used to assess the degree of broadband coverage 
is a key element in defining the terms ``unserved'' and ``underserved'' 
found in the BTOP provisions discussed in the preceding sections. 
Additionally, the Recovery Act allows RUS to fund a

[[Page 33132]]

broadband project with Recovery Act funds only if ``at least 75 percent 
of the area to be served [is] in a rural area without sufficient access 
to high speed broadband service to facilitate rural economic 
development, as determined by the Secretary of Agriculture.'' \33\ As a 
result, RUS must also define the relevant ``area'' to which it would 
apply the criteria for sufficiency of access to broadband service.
---------------------------------------------------------------------------

    \33\ Recovery Act div. A, tit. I, 123 Stat. at 118.
---------------------------------------------------------------------------

    Most commenters suggest defining ``area'' according to government-
recognized boundaries. For example, multiple commenters suggest the use 
of census tracts,\34\ pointing out that the FCC already collects 
service data at the census tract level \35\ and that census tracts are 
relatively small.\36\ Rural Cellular Association also points out that 
government-defined boundaries are technologically neutral because they 
do not correspond to the existing service areas for any particular 
technology.\37\ Multiple commenters also state a preference for census 
blocks, or the smallest geographic designation possible, so that 
proposals for service to all truly underserved geographic locations 
qualify for BTOP funding.\38\
---------------------------------------------------------------------------

    \34\ See, e.g., FTTH Council at 10-11.
    \35\ See, e.g., American Cable Association at 6 (Apr. 14, 2009); 
Rural Cellular Association at 42 (Apr. 13, 2009); XO and Nextlink at 
6, n. 14.
    \36\ See, e.g., American Cable Association at 6; Rural Cellular 
Association at 42.
    \37\ Rural Cellular Association at 42.
    \38\ See, e.g., Wireless Internet Service Providers Association 
(WISPA) at 8 (Apr. 10, 2009) (supporting census blocks as the basic 
geographical unit and stating, ``No `unserved' or `underserved' 
community should be disqualified because it is too small.''); 
Frontier Communications at 12 (Apr. 13, 2009) (``An `area' should be 
determined at as small a geographic level as possible. Using entire 
census communities or census blocks will disadvantage many unserved 
areas that are adjacent to served areas.''). See also Smith Bagley, 
Inc. at 3-4 (Apr. 13, 2009) (suggesting that NTIA require applicants 
to submit a spreadsheet of census blocks with estimates of unserved 
and underserved households and businesses).
---------------------------------------------------------------------------

    In contrast, some commenters encourage the agencies to allow 
applicants to define their own service areas to be evaluated against 
the criteria established for ``unserved'' or ``underserved'' areas.\39\ 
Many of these commenters express concern that requiring pre-defined 
geographic units to qualify as ``unserved'' or ``underserved'' areas 
will exclude regions within those geographic units that actually lack 
access to broadband service.\40\
---------------------------------------------------------------------------

    \39\ See, e.g., ITTA at 2-3 (``Each applicant should be able to 
define its proposed service area, including aggregating both 
adjacent and non-contiguous clusters of unserved homes.''); Embarq 
at 18 (Apr. 13, 2009); CWA at 22.
    \40\ See, e.g., Windstream Communications, Inc., (Windstream) at 
28 (Apr. 14, 2009) (``Pockets of unserved and underserved customers 
are unlikely to fall neatly within existing, arbitrary geographic 
units, such as ZIP codes or census blocks.'').
---------------------------------------------------------------------------

    RUS and NTIA conclude that applicants should be allowed to define 
their own proposed funded service areas, which are composed of one or 
more contiguous census blocks. RUS and NTIA believe that employing 
census blocks, a standardized, technologically neutral geographic unit, 
will facilitate the comparison of data from applicants proposing to 
serve overlapping regions and will facilitate compliance with the 
statutory prohibition against providing BTOP and BIP funding for the 
same project in the same area.\41\ RUS and NTIA have attempted to 
accommodate commenters' concerns about the inadvertent exclusion of 
areas in need of broadband service by adopting a very granular 
definition of proposed funded service area and defining ``unserved'' 
and ``underserved,'' and ``without sufficient access to high speed 
broadband service to facilitate rural economic development'' in terms 
of the percentages of a proposed funded service area meeting the 
definitional criteria.
---------------------------------------------------------------------------

    \41\ See Recovery Act div. A, tit. I, 123 Stat. at 119.
---------------------------------------------------------------------------

    An applicant must identify the census block(s) selected for the 
project and provide documentation supporting the applicant's 
determination that the proposed funded service area is either unserved 
or underserved. There is a presumption that the applicant will provide 
service to the entire territory of each census block included in the 
proposed funded service area, unless the applicant files a waiver and 
provides a reasoned explanation as to why providing coverage for the 
entire census block is infeasible. Applicants may be permitted to serve 
less than the entire census block under certain conditions. For 
example, an applicant might seek a waiver if the census block exceeds 
100 square miles or more or is larger than the applicant's authorized 
operating territory, e.g., it splits a rural incumbent local exchange 
carrier's (ILEC) study area or exceeds the boundaries of a wireless 
carrier's licensed territory.

Interconnection and Non-Discrimination Requirements

    The Recovery Act requires NTIA to establish ``non-discrimination 
and network interconnection obligations that shall be contractual 
conditions of grants * * * including, at a minimum, adherence to the 
principles contained in the [FCC's] broadband policy statement.'' \42\ 
The Recovery Act does not require RUS to impose these obligations on 
its grantees or borrowers.
---------------------------------------------------------------------------

    \42\ Recovery Act Sec.  6001(j), 123 Stat. at 512.
---------------------------------------------------------------------------

    Major incumbent service providers, rural carriers, and their trade 
associations urge that the interconnection and non-discrimination 
obligations be limited to the FCC Internet Policy Statement.\43\ These 
operators emphasize that imposing new requirements in the BTOP process 
would cause uncertainty and deter applicants from applying for grants. 
Major equipment manufacturers share this view.\44\ Cellular operators 
and CTIA assert that wireless networks need the ability to prioritize 
traffic due to limited capacity.\45\ Content owners argue that non-
discrimination obligations should not preclude copyright 
enforcement.\46\ On the other side, public interest groups \47\ and 
potential new entrants \48\ advocate additional obligations, generally 
some combination of interconnection language from Title II of the 
Communications Act and non-discrimination requirements precluding 
degradation or inferior treatment of applications, content, and 
services. Many states \49\ and most of the cities filing comments \50\ 
urge the inclusion of some open access or non-discrimination 
obligations.
---------------------------------------------------------------------------

    \43\ See, e.g., Verizon at 13 (Apr. 13, 2009); AT&T at 14-16; 
OPASTCO at 11-12 (Apr. 13, 2009); National Exchange Carrier Assoc. 
(NECA) at 6 (Apr. 13, 2009).
    \44\ See, e.g., Motorola at 13-15; Cisco at 9 (Apr. 13, 2009).
    \45\ See, e.g., CTIA at 8 (Apr. 13, 2009).
    \46\ See, e.g., MPAA, RIAA et al. at 3 (Apr. 13, 2009).
    \47\ See, e.g., Free Press at 18; Open Internet Coalition at 2 
(Mar. 10, 2009); Center for Democracy & Technology at 3-5 (Apr. 13, 
2009); EDUCAUSE at 4-5 (Apr. 13, 2009).
    \48\ See Clearwire Corp. at 14-15 (Apr. 10, 2009); Earthlink and 
NewEdge at 4-5 (Apr. 13, 2009).
    \49\ See, e.g., Michigan PSC at 8; State of Arizona at 11 (Apr. 
13, 2009).
    \50\ See, e.g., City of Palo Alto at 19-20 (Apr. 13, 2009).
---------------------------------------------------------------------------

    RUS and NTIA require applicants to commit to five obligations. 
These requirements, discussed in more depth below, are subject to the 
needs of law enforcement and reasonable network management practices.
    (1) Adhere to the principles contained in the FCC's Broadband 
Policy Statement (FCC 05-151 adopted Aug. 5, 2005).
    This requirement is specified in the Recovery Act.\51\
---------------------------------------------------------------------------

    \51\ Recovery Act Sec.  6001(j), 123 Stat. at 515.
---------------------------------------------------------------------------

    (2) Not favor any lawful Internet applications or content over 
others.
    This requirement ensures neutral traffic routing. Without a non-
discrimination condition, network

[[Page 33133]]

operators could give preferential treatment to affiliated services, or 
charge some application and content providers for ``fast lanes'' that 
would put others at a competitive disadvantage. The standard used here 
is a more general version of the one the FCC imposed in the AT&T/
BellSouth merger conditions, which specified no differential treatment 
of packets based on source, destination, or ownership.\52\ Awardees may 
employ generally accepted technical measures to provide acceptable 
service levels to all customers, such as caching and application-
neutral bandwidth allocation, as well as measures to address spam, 
denial of service attacks, illegal content, and other harmful 
activities. They also may comply with applicable statutes such as the 
Communications Assistance to Law Enforcement Act (CALEA).\53\
---------------------------------------------------------------------------

    \52\ See In the Matter of AT&T Inc. and BellSouth Corporation, 
WC Docket No. 06-74, Memorandum Opinion and Order, FCC 06-189, App. 
F at 154 (Mar. 26, 2007), http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-189A1.pdf.
    \53\ See 47 U.S.C. 1001 et seq.
---------------------------------------------------------------------------

    Furthermore, this requirement applies only to Internet applications 
and content, that is, those that traverse the public Internet. Awardees 
may offer managed services such as telemedicine, public safety 
communications, and distance learning, which use private connections or 
virtual private networks, rather than the public Internet. This 
approach ensures that awardees do not distort the Internet's neutral 
environment for applications and content, while giving them the 
flexibility to design their networks in a technically efficient manner 
and the ability to provide services that may require enhanced quality 
of service or separate connections for privacy and security reasons.
    (3) Display network management policies in a prominent location on 
the service provider's Web page and provide notice to customers of 
changes to these policies (awardees must describe any business 
practices or technical mechanisms they employ, other than standard best 
efforts Internet delivery, to allocate capacity; differentiate among 
applications, providers, or sources; limit usage; and manage or block 
access to illegal or harmful content).
    This public notice requirement is intended to provide full 
disclosure of these network management practices to users and potential 
users to enable them to make informed decisions regarding how their 
usage may be impacted by current policies and any modifications that 
are subsequently made.
    (4) Connect to the public Internet directly or indirectly, such 
that the project is not an entirely private closed network.
    An entirely private closed network would make the interconnection 
and non-discrimination obligations moot, since the project would not 
offer access to Internet applications and content.
    (5) Offer interconnection, where technically feasible, on 
reasonable rates and terms to be negotiated with requesting parties. 
This includes both the ability to connect to the public Internet and 
physical interconnection for the exchange of traffic.
    The Recovery Act mandates conditions for ``network 
interconnection,'' \54\ which the FCC Policy Statement and non-
discrimination conditions alone do not address. Moreover, an 
interconnection condition promotes competition in end-user service 
provision, consistent with the Recovery Act's directives. Specifically, 
the fourth prong of the FCC Policy Statement states that users are 
entitled to a choice of service providers.\55\ The Recovery Act 
incorporates this element by reference, because it requires applicants 
to meet the Policy Statement's principles as a minimum condition. The 
Recovery Act also requires RUS to give priority to projects offering a 
choice of end-user service providers,\56\ which is only possible if 
funded projects offer interconnection. As a general policy matter, 
interconnection allows synergies where others can benefit from 
subsidized infrastructure. Wholesale service may also generate 
additional revenue for recipients, and increase capital efficiency by 
maximizing utilization of network capacity. Where not inconsistent with 
other Recovery Act goals, RUS and NTIA will seek the greatest possible 
expansion of broadband from its investment.
---------------------------------------------------------------------------

    \54\ Recovery Act Sec.  6001(j), 123 Stat. at 512.
    \55\ Internet Policy Statement, FCC 05-15, adopted Aug. 5, 2005.
    \56\ Recovery Act div. A, tit. I, 123 Stat. at 118. This 
language does not appear in the BTOP section of the Recovery Act, 
but is consistent with the network interconnection and non-
discrimination obligations specified there.
---------------------------------------------------------------------------

    An awardee may satisfy the requirement for interconnection by 
negotiating in good faith with all bona fide requesting parties that 
wish to connect to the public Internet using the awardee's network or 
to exchange traffic. Interconnection must take place where technically 
feasible and without exceeding current or anticipated capacity 
limitations. The awardee and requesting party may negotiate terms such 
as business arrangements, capacity limits, financial terms, and 
technical conditions for interconnection. If the awardee and requesting 
party cannot reach agreement, they may voluntarily seek an 
interpretation by the FCC of any FCC rules implicated in the dispute. 
If an agreement cannot be reached within 90 days, the party requesting 
interconnection may notify RUS or NTIA in writing of the failure to 
reach satisfactory terms with the awardee. The 90-day limit is to 
encourage the parties to resolve differences through negotiation.
    This approach encourages interconnection without requiring 
micromanagement of private negotiations. Appropriate interconnection 
terms will vary depending on the type of project, the technologies 
involved, the type of provider requesting interconnection, and the 
dynamics of the local market. There is no need to enforce uniform terms 
or pricing standards, so long as parties negotiate in good faith to 
reach mutually-beneficial business agreements. A more formal 
interconnection regime would require enforcement resources beyond the 
scope of BTOP.
    Entities that successfully reach an agreement to interconnect with 
a system funded under BIP may not use that interconnection agreement to 
provide services that duplicate services provided by projects funded by 
outstanding telecommunications loans made under the Rural 
Electrification Act. Further, interconnection may not result in a BIP-
funded facility being used for ineligible purposes under the Recovery 
Act. These limitations are needed to comply with pre-existing loan 
agreements and Recovery Act language for RUS, but do not apply to BTOP.
    With respect to non-discrimination, those who believe an awardee 
has failed to meet the non-discrimination obligations should first seek 
action at the FCC of any FCC rules implicated in the dispute. If the 
FCC chooses to take no action, those seeking recourse may notify RUS 
and NTIA in writing about the alleged failure to adhere to commitments 
of the award.
    Overall, these five requirements ensure that public funds will 
support the public goal of open networks. The standards chosen echo 
established FCC rules, but avoid detailed regulation and allow for 
flexibility when network management requires differential treatment or 
exclusivity. The standards chosen are technologically neutral and 
appropriate for the widest possible range of applications, because the 
definition of reasonable network management may differ based on the

[[Page 33134]]

network technology used and other dimensions of the project. Applicants 
are required to disclose interconnection, nondiscrimination, and 
network management plans with their applications, and provide regular 
network reporting, to facilitate compliance and better understanding of 
appropriate network management techniques. As noted above, applicants 
are required to provide clear and prominent public disclosure of 
network management policies to customers. Additional scoring points 
will be awarded for clear and prominent public disclosure of 
interconnection and nondiscrimination policies to customers.
    These conditions will apply for the life of the awardee's 
facilities used in the project and not to any existing network 
arrangements. The conditions apply to any contractors or subcontractors 
of such awardees employed to deploy or operate the network facilities 
for the infrastructure project. To the extent that the FCC takes action 
in this area, such as by modifying its Internet Policy Statement or by 
adopting additional or different rules or policies, awardees will 
become subject to FCC rules and policies in lieu of the conditions set 
forth only to the extent that the FCC rules or policies effectively 
supersede the conditions set forth above. Recipients that fail to 
accept or comply with the terms listed above may be considered in 
default or breach of their loan or grant agreements. RUS and NTIA may 
exercise all available remedies to cure the default.

Eligibility

    Section 6001(e)(1) of the Recovery Act expressly identifies the 
types of entities that are eligible for BTOP grants and authorizes the 
Assistant Secretary to find by rule that it may be in the public 
interest for any other entity, including a broadband service or 
infrastructure provider, to be eligible. Section 6001(e)(1)(C) also 
requires that ``[i]n establishing such rule, the Assistant Secretary 
shall to the extent practicable promote the purposes of [BTOP] in a 
technologically neutral manner.'' The Recovery Act does not explicitly 
identify the entities that are eligible for RUS broadband funding.
    The comments of service providers of all types,\57\ equipment 
suppliers,\58\ and various other entities \59\ state that private, for-
profit companies should generally be eligible for BTOP funding. Some 
service providers propose automatic eligibility for service providers 
who already hold a license or franchise or who already provide 
broadband service.\60\ Several non-profits, government entities, and 
small providers argue that no for-profit entity should be eligible 
without a public interest showing, either individualized \61\ or based 
on its agreement to adhere to additional conditions,\62\ or otherwise 
favor only limited for-profit eligibility.\63\
---------------------------------------------------------------------------

    \57\ See, e.g., Qwest Communications (Qwest) at 9-13 (Apr. 13, 
2009); NCTA at 6; Bresnan Communications et al., at 5 (Apr. 13, 
2009).
    \58\ See, e.g., Alcatel-Lucent at 15.
    \59\ See, e.g., CWA at 6; EDUCAUSE at 4; Georgia Technology 
Authority at 4 (Apr. 13, 2009); State of Alabama at 7 (Apr. 13, 
2009); State of Wyoming at 2 (Apr. 10, 2009).
    \60\ See, e.g., Windstream at 8-9; American Cable Association at 
5-6.
    \61\ See, e.g., Kentucky Municipal Utilities Association at 7-8 
(Apr. 13, 2009); National Rural Electrical Cooperative Association 
at 8-9 (Apr. 13, 2009); NATOA at 8-11.
    \62\ See, e.g., The Benton Foundation at 14-19 (Mar. 20, 2009).
    \63\ For example, several commenters proposed that private firms 
should receive grants only in areas where government or non-profit 
entities do not apply. See, e.g., SEDA Council of Governments at 1 
(Mar. 24, 2009); NATOA at 9. Some small rural telephone companies 
favored limiting eligibility for large providers. See, e.g., 
National Telecommunications Cooperative Association at 3-4 (Apr. 13, 
2009).
---------------------------------------------------------------------------

    Through this NOFA, the Assistant Secretary of Commerce for 
Communications and Information has found it to be in the public 
interest to permit for-profit corporations and non-profit entities (not 
otherwise encompassed by section 6001(e)(1)(A)) that are willing to 
promote the goals of the Recovery Act and comply with the statutory 
requirements of BTOP to be eligible for a grant. By adopting this broad 
approach, the Assistant Secretary intends to invite a diverse group of 
applicants to participate in BTOP, which reflects his desire to expand 
broadband capabilities in the United States in a technology-neutral 
manner. This approach is consistent with Congressional intent in this 
regard.\64\ This finding is reasonable because of the positive impact 
that the inclusion of for-profit corporations will have on the 
administrative and programmatic requirements of this program. Many for-
profit corporations have expertise in deployment and sustainable 
operation of telecommunications facilities,\65\ which may lead to the 
creation of more efficient and sophisticated broadband networks that 
consumers will be able to access in a shorter period of time. In some 
cases, for-profit corporations also may have the resources to deploy 
new infrastructure more quickly or efficiently than other types of 
entities.\66\ Moreover, for-profit corporations provide economic growth 
and job creation, which is consistent with many of the key purposes of 
the Recovery Act.\67\
---------------------------------------------------------------------------

    \64\ See Conf. Rep. at 775 (stating that ``as many entities as 
possible [should] be eligible to apply for a competitive grant, 
including wireless carriers, wireline carriers, backhaul providers, 
satellite carriers, private-public partnerships, and tower 
companies'').
    \65\ See Qwest at 10-12; NCTA at 6; Windstream at 9.
    \66\ See Qwest at 10-14; Windstream at 9.
    \67\ See State of Alabama at 7.

    Dated: July 1, 2009.
James R. Newby,
Acting Administrator, Rural Utilities Service.
Thomas C. Power,
Chief of Staff, National Telecommunications and Information 
Administration.
[FR Doc. E9-16268 Filed 7-8-09; 8:45 am]
BILLING CODE 3410-15-P