USDA Rural Development ReConnect Program
In December 2019, the USDA announced the application period for its 2020 ReConnect Program which will provide grants and loans totaling $550 million for broadband deployment in areas lacking sufficient broadband. The 2020 funding round will include awards in the same three funding categories: 100% grant, 50%/50% grant loan and 100% loan. The budget for each category will be "up to $200 million." The application period will be the same for all three types of applications for second-round funding: January 31 to March 16, 2020. Similar to the first ReConnect round in 2019, the maximum loan amount that can be requested is $50 million and the maximum grant amount that can be requested is $25 million. Those requesting grant funding must provide a matching contribution equal to 25% of the overall project cost. More details are in the announcement in the Federal Register.
Federal Funding Guide
BroadbandUSA, the National Telecommunications and Information Administration's broadband website, has issued a resource on federal funding available for broadband projects. See the BroadbandUSA: Guide to Federal Funding of Broadband Projects publication.
USDA-RUS Community Connect Program
In 2019, the Community Connect Program is offering grants of between $100,000 and $3 million for the construction of broadband service of at least 25 Mbps download and 3 Mbps upload to currently unserved, lower income and extremely rural areas. Recipients must offer service at no charge for two years to critical community facilities and to a community center that offers at least two computer access points. A local match of at least 15 percent is required. More information is available on the RUS website.
Broadband Grants for Healthcare
The Federal Communications Commission's Rural Health Care Fund supports healthcare facilities in rural areas. The program is administered by the Universal Service Administrative Company (USAC). To learn more about funding opportunities, see the USAC website.
Community Reinvestment Act and Public Welfare Investments
The Community Reinvestment Act (CRA) is a law that encourages banks to make loans and investments and provide services to low- and moderate-income (LMI) communities. The federal oversight agencies recently updated their guidance on what types of community development lending and investments may receive CRA consideration, clarifying that broadband investments are eligible. The rationale is twofold. First, more and more banking activities are online; to ensure that low and moderate income individuals have access to banking activities, broadband investment is eligible. Second, broadband infrastructure is recognized as being important to economic development for revitalizing and stabilizing LMI communities. The Federal Reserve Bank of Dallas has a publication on Closing the Digital Divide: A Framework of Meeting CRA Obligations.
The Public Welfare Investment (PWI) Authority allows national banks to make investments that are not otherwise expressly permitted under the National Bank Act. National banks may make investments that are primarily designed to promote the public welfare if those investments primarily benefit low- and moderate-income individuals, low- and moderate-income areas, or other areas targeted by a government entity for redevelopment, or if the investments would receive consideration under CRA. PWI investments can be used to show CRA compliance. There are limits on the amount of PWI investments that can be made. (A bank’s aggregate public welfare investments and outstanding commitments, including the proposed investment, cannot exceed 15 percent of its capital and surplus.)
If you are investigating funding for a broadband project, you may want to contact your local bank(s) to explore CRA or PWI as possible options.