Satellite Broadband Money a Major Step for Industry, Executives Say
The $100 million that RUS set aside to pay for satellite broadband projects in the second round of broadband stimulus funding is a significant recognition that the technology can play a role in U.S. broadband extension efforts, said satellite broadband executives. Still, many first-round applicants are underwhelmed over the amount RUS allotted to satellite broadband in the second round, they said.
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The $100 million allotted by the notice of funds availability (NOFA) is relatively small, considering RUS can give out about $2.2 billion in stimulus funds, first-round funding applicants said. While largely pleased with the new rules, WildBlue General Counsel Lisa Scalpone expects about 10 million people to remain unserved once the last-mile and middle-mile money is given out, leaving “not a lot of money per subscriber,” she said: “Demand in this country is so strong and affordability is a factor. If there is more money in the bucket, more people will sign up.” The allotment may increase as “any and all funds not obligated for last-mile and middle-mile projects” will go toward satellite projects, the NOFA said.
RUS will give out the money as grants to provide satellite broadband service to unserved rural areas by funding customer equipment, terrestrial equipment and/or discounted broadband service for at least one year, it said. The funds may not go toward satellite launch, construction, purchase, or leasing of transponder space, the agency said.
The agency also adjusted its first round one loan per market rule to allow regional coverage, something satellite providers pushed hard for. The new rules allow satellite providers to serve one or more regions per project. While first-round satellite broadband applicants have yet to hear if their projects were chosen, most don’t expect to receive any of the initial-round funding, in part because the one loan per market rule left satellite providers at a disadvantage, several applicants told us.
RUS will publish a request for proposals after March 15, the final day to apply for funds supporting last-mile and middle-mile projects. The request will outline further technical requirements and the total amount set aside for satellite projects.
The new NOFA creates an important precedent as the FCC considers a National Broadband Plan, said industry executives. “If this really works it will give great argument in [Universal Service Fund reform] or further stimulus programs,” a satellite broadband executive said. The new rules are akin to admitting there are households no other technology is willing to reach and satellite will have to play a role, the executive said: “I see that as a very big win. Is it a high enough dollar amount? It never is.”
- Tim Warren