1 Rural Development 1400 Independence Ave. Washington, DC Presenter: Mary Campanola Outreach Coordinator Telecommunications Program Rural Development Telecommunications Program Overview Rural Telecon ’07 Conference Springfield, IL October 16, 2007

2 Telecommunications Program Rural America will have access to affordable, reliable, advanced communications services to provide a healthy, safe and prosperous place to live and work. To improve health, safety, education, economic opportunity, and quality of life in rural America through leadership and investment in communications infrastructure and services. Mission Vision

3 Strong Local Leadership in Rural Development State Offices –State Directors and Office Staff work with local communities to identify potential projects and state needs. –State Offices can be identified at: Telecom Program Staff provide Financial and Engineering support and guidance in all 50 states. –28 General Field Representatives monitoring more than 1000 telecom and broadband loan and grant projects across the country. –These same field representatives provide technical assistance to potential applicants and provide information to communities who are interested in broadband deployment. –Identify your local field representative at: Rural Development Utilities Programs Support for Telecommunications Loan and Grant Applicants

4 The RD Telecommunications Program loan and grant programs Infrastructure Loan Program: Loans to local telephone companies for improving telecommunications service in rural communities Broadband Access Loan Program and Community Connect Grant Program: Loans and grants for local telephone companies and other service providers who offer Broadband (high-speed Internet) services in eligible communities Distance Learning/Telemedicine Loan and Grant Program: Loans and grants for providing Distance Learning and Telemedicine services to rural residents Rural Development Utilities Programs

5 Rural Development Telecommunications Program Community Connect Distance Learning and Telemedicine Broadband Loan Program Infrastructure Program Since its inception, the program has provided 148 grants and invested almost $70 million to provide service to local communities. Awarded $8.9 million in grants in FY $306 million in DLT grants and loans have been awarded. In FY 2007, 78 grants and 11 loan/grant combinations were awarded. 699 educational centers and 512 health centers have gained access to improved services. 80 loans have been made, for $1.6 billion, for broadband deployment in more than 1900 communities. More than 1.1 million households will receive broadband access under loans made. Assists the private sector in developing and financing the construction of telecom infrastructure in rural America. $3.7 billion in principal outstanding; 550 borrowers. 92% of borrowers are providing Broadband service. More than $6 billion invested in rural telecom infrastructure since 2001……

6 Broadband Loans… Purpose To provide loans for the cost of construction, improvement, and acquisition of facilities and equipment for broadband services in eligible rural communities.

7 Broadband Loans… FY 2007 Budget Treasury Rate Funding: $998 Million (includes carryover funding from FY 2006)

8 Broadband Loans… Statistics 209 Applications Received Totaling $4,459,301,223 Applications Processed as of September 30, Approved$1,609,432, In Review$ 621,000, Returned $2,240,000,000

9 Broadband Loans… Status and Results (as of 9/30/07) Established by the 2002 Farm Bill Farm Bill reauthorization in process. Originally envisioned to fund $2 billion in rural broadband deployment by To date, 80 loans have been made for approximately $1.6 billion to finance facilities in 40 states. –Projects proposing to serve more than 1.1 million subscribers –1,979 communities 8 projects completed in Kansas, Louisiana, Michigan, North Dakota, Nebraska, South Dakota, Texas and Washington

10 Broadband Loans… Types of Organizations Funded As of 9/30/2007 One Size Does Not Fit All… Private/public partnerships Traditional telephone companies enhancing service offerings Local service providers serving one or a few local communities National service providers providing service to multiple communities, even multiple states Municipalities 33% of applications approved have been from startup companies

11 Broadband Loans… Types of Technologies Funded As of 9/30/07

12 Broadband Loans… Eligible Entities Who is eligible? Corporations Limited Liability Companies Cooperative or Mutual Organizations Indian Tribes Public Body

13 Broadband Loans… Ineligible Entities Who is not eligible? Individuals Partnerships (including LLPs) Any entity serving more than 2% of the telephone subscriber lines installed in the United States

14 Broadband Loans… Direct Cost-of-Money Loans Bear interest at the cost of money to the Treasury for comparable maturities. The interest rate is set at the time of each advance of funds The current rates can be found at:

15 Broadband Loans… Application Information The regulation, application, application guide, and all other relevant information is available on our website at:

16 Broadband Loans… Application Information New Broadband Loans Search Tool Listing of all approved and pending communities: This new search tool is regularly updated.

17 Broadband Loans… Application Submission Prospective applicants should contact their respective General Field Representative (GFR) prior to submitting the application List of the GFRs and the contact information is included in Application Guide There is no deadline to submit applications Applications will be reviewed and processed on a first-come, first-served basis

18 Broadband Loans… Key Components of an Application Credit Support Business Plan Market Survey Financial Information System Design

19 Proposed Rule Published May 11, 2007; Public Comments Were Due July 10, 2007 Rural Development’s Goals: Our Proposed Rules will…  Promote deployment to rural areas with little or no service  Limit funding in urban areas and areas where a significant share of the market is served by incumbent providers  Clarify and streamline the equity and marketing survey requirements  Increase the transparency of the application process  Promote a better understanding of all application requirements  Ensure that projects funded are keeping pace with increasing demand for bandwidth 2007 Farm Bill Will Also Impact Broadband Program 7 CFR Part 1738: Rural Broadband Access Loan and Loan Guarantee Program Ensure that rural residents have access to affordable and reliable quality broadband service in rural communities Make sound lending decisions and to ensure positive investment of taxpayer dollars

20 What is Community Connect? A nationally competitive grant program to provide broadband service on a “community-oriented connectivity” basis to the most rural and economically challenged communities. Since its inception, the Community Connect program has provided 148 grants and invested almost $70 million to provide service to local communities.

21 Program Basics Serves one Community Community without Broadband Provides a Community Center Free service to Critical Facilities

22 New for 2008 Added Rand McNally as a community qualifier if the Census is not recognizing a community Using MHI based on the state average rather than PCI based on the national level Clarified allowable operating expenses

23 Benefits 1.Fosters economic growth 2.Delivers enhanced: Educational opportunities Health Care Public Safety Services

24 Keys to Success Good management of the project High local involvement; especially local leadership Good service at reasonable rates

25 The DLT Grant and Loan Programs provide rural communities with opportunities to obtain educational and medical services from distant locations utilizing communications technologies. Distance Learning/ Telemedicine Programs

26 DLT… FY 2007 Budget Combination Loan/Grant: $50,000,000 –$45,000,000 Loan/$5,000,000 Grant 9:1 Ratio Maximum Amount: $20,000,000 Minimum Amount: $50,000

27 DLT… FY 2007 Budget ELECTRONIC MEDICAL RECORDS Combination Loan/Grant: $25,000,000 –$20,000,000 Loan/$5,000,000 Grant 4:1 Ratio –Maximum Amount: $1,000,0000 –Minimum Amount: $50,000

28 DLT… FY 2007 Budget 100% DLT LOANS $62,900,000 Maximum Amount: $20,000,000 Minimum Amount: $50,000

29 What Kind of Projects are Eligible for Grants? Just about every type of organization is eligible to apply – except individuals Benefits must flow to rural areas (not urban clusters over 20,000 or urbanized areas) Distance Learning and Telemedicine are defined for the grant program to exclude “on campus” benefit Telecommunications service (the transport mechanism itself) is not eligible for grants Every year the emphasis from applicants changes – in recent years electronic medical technologies, such as Picture Archival and Communications Systems (PACS), have become dominant DLT Grants… Eligibility

30 Distance Learning Project Examples Enabling small rural schools to remain accredited – and viable – by sharing teaching skills and variety of curriculum from larger schools Bringing specialized nonrecurring programs to rural areas NASA space missions Virtual field trips Offering continuing adult education and GED courses Delivering advanced placement college courses to high schools Sharing teaching resources between colleges Bringing accredited professional continuing education courses to hospitals

31 Distance Learning Local Schools University Resources Adult Ed/GED Resources Web Resources

32 Telemedicine Examples Providing teleradiology equipment to small hospitals and clinics to bring imaging capability to rural patients Creating remote treatment/consultation capability with videoconferencing Equipping visiting nurses associations with remote monitoring capability for home patients Establishing remote diagnostic and monitoring capability in ambulances Creating mobile or remote access capability to existing Electronic Medical Records Systems Establishing Picture Archival and Communications Systems for rural hospitals with no radiologist coverage

33 Telemedicine Local Clinics University Resources Electronic Med Records Regional Hospital Local Hospital (Hub) Local Hospital Mobile Computing Home Health Monitoring & Mobile Health Units Schools

34 DLT Program Eligible Organizations Must operate a rural community facility and be qualified to deliver Distance Learning or Telemedicine services. Must be legally organized with capability to contract with USDA Rural Development.

35 DLT Grant Program Eligible Purposes Purchase & Installation of: Inside Wiring Telecom and Data Terminals Audio and Video Equipment Interactive Video Equipment Computer Hardware & Software Medical Equipment for Telemedicine Use Off-the-shelf Instructional Programming

36 DLT Grant Program Applications My impressions: –More Telemedicine applications than ever before, maybe more than Distance Learning –Urbanized Area/Urban Cluster tool is focusing benefit on real rural areas –Fixed site/non-fixed site scoring has leveled the playing field –Site classification improving but an area that needs work –Most applicants are supporting match, Rurality and NSLP scoring –Most applications are from eligible entities

37 DLT… For additional information

38 Rural Development Telecommunications Program Overview Thank You Rural Development 1400 Independence Ave. Washington, DC Mary Campanola Outreach Coordinator Telecommunications Program