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Financing BPL Steven E. Collier Vice President, Emerging Technologies
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FINANCING BPL OPTIONS Internal Resources Rural Lenders Commercial Lenders JV Partners
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Rural Broadband Access Loans and Loan Guarantee Program OBJECTIVE: “... loans and loan guarantees to fund the cost of construction, improvement, or acquisition of facilities and equipment for the provision of broadband service in eligible rural communities.” OBJECTIVE: “... loans and loan guarantees to fund the cost of construction, improvement, or acquisition of facilities and equipment for the provision of broadband service in eligible rural communities.”
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Rural Broadband Access Loans and Loan Guarantee Program FOCUS: Residential broadband service FOCUS: Residential broadband service
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Rural Broadband Access Loans and Loan Guarantee Program TECHNOLOGY: Neutral TECHNOLOGY: Neutral
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Rural Broadband Access Loans and Loan Guarantee Program CONSIDERATIONS: “... not only whether broadband [is] physically available but also the quality of any existing broadband service.” CONSIDERATIONS: “... not only whether broadband [is] physically available but also the quality of any existing broadband service.”
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FUNDING $1.45 billion designated as “no year money” (available until distributed) including: –$80 million as 4-percent direct loans –$80 million as loan guarantees An additional $196 million proposed for fiscal year 2004 (Oct 1 – Sept 30) FUNDING $1.45 billion designated as “no year money” (available until distributed) including: –$80 million as 4-percent direct loans –$80 million as loan guarantees An additional $196 million proposed for fiscal year 2004 (Oct 1 – Sept 30) Rural Broadband Access Loans and Loan Guarantee Program
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ELIGIBLE BORROWERS Cooperatives Non-profit organizations Limited dividend or mutual associations Limited liability companies Commercial organizations Indian tribes or tribal organizations ELIGIBLE BORROWERS Cooperatives Non-profit organizations Limited dividend or mutual associations Limited liability companies Commercial organizations Indian tribes or tribal organizations Rural Broadband Access Loans and Loan Guarantee Program
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DEFINITIONS Broadband: Transmit data enabling send and receive of high-quality voice, data, graphics, and video –FCC standard of 200kbps up and down –May be revised upwards in the future Rural Broadband Access Loans and Loan Guarantee Program
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DEFINITIONS Eligible Community: – 20,000 inhabitants or fewer For Four-percent Loan program, 2,500 or less –Not in a standard metropolitan statistical area Rural Broadband Access Loans and Loan Guarantee Program
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PRIORITY Eligible rural communities in which broadband is not available Where no entity is committed to provide such service Rural Broadband Access Loans and Loan Guarantee Program
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RESTRICTIONS To provide service in the same area as another applicant To acquire stock, facilities or equipment of an applicant affiliate Rural Broadband Access Loans and Loan Guarantee Program
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RESTRICTIONS Existing RUS borrowers who petition –demonstrate intent to provide broadband service within 2 years –petition within 90 days of a loan application from another potential provider Rural Broadband Access Loans and Loan Guarantee Program
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RESTRICTIONS For operating expenses, customer terminal equipment (owned by consumer), or vehicles not used primarily in construction Rural Broadband Access Loans and Loan Guarantee Program
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RESTRICTIONS More requirements than Broadband Pilot Program Rural Broadband Access Loans and Loan Guarantee Program
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APPLICATION RUS Form 532 Market survey Detailed business plan Certified system design Rural Broadband Access Loans and Loan Guarantee Program
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APPLICATION Financial statements and forecasts Environmental report Certification of availability of broadband service Evidence of legal notification Rural Broadband Access Loans and Loan Guarantee Program
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APPLICATION http://www.usda.gov/rus/telecom/broadband.htm Rural Broadband Access Loans and Loan Guarantee Program
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And then you wait... Rural Broadband Access Loans and Loan Guarantee Program
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CONTACT Deborah Jackson Broadband Team, Telecommunications Program, Rural Utilities Service Djackson@rus.usda.gov 202-720-8454 CONTACT Deborah Jackson Broadband Team, Telecommunications Program, Rural Utilities Service Djackson@rus.usda.gov 202-720-8454 Rural Broadband Access Loans and Loan Guarantee Program
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