Rural Utilities Service, USDA.
Notice of funds availability.
This is to notify interested parties that, during the current fiscal year (FY) 2002, $80 million is available for loans in the Broadband Pilot Loan Program administered by the Rural Utilities Service (RUS). This is a continuation of the Broadband Pilot Loan Program initiated by RUS during FY 2001 to finance the construction of facilities and systems providing broadband transmission service to rural consumers. The program provides financing for facilities serving rural communities of up to 20,000 inhabitants so that rural consumers in those areas may enjoy the same quality and range of telecommunications services as are available in urban and suburban communities. This notice describes the eligibility and application requirements and the criteria RUS will consider in evaluating applications for broadband loans.
RUS currently has applications for broadband loans, submitted in response to the FY 2001 Broadband Pilot Loan Program, in excess of $350 million. Before accepting new applications, RUS will act on those completed applications currently pending. RUS currently has completed applications in the aggregate amount of $150 million. RUS anticipates that the FY 2002 lending authority will be fully committed after it has acted on those completed applications. However, should FY 2002 loan authority remain available thereafter, RUS shall publish a notice advising interested parties that it is accepting additional applications.
New applications will be accepted only if, after processing all pending completed applications, RUS publishes an additional notice announcing that loan funds remain available. See discussion below.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Roberta D. Purcell, Assistant Administrator, Telecommunications Program, Rural Utilities Service, STOP 1590, 1400 Independence Avenue, SW., Washington, DC 20250-1590, Telephone (202) 720-9554, Facsimile (202) 720-0810.End Further Info End Preamble Start Supplemental Information
Information Collection and Recordkeeping Requirements
This notice contains no reporting or recordkeeping provisions requiring Office of Management and Budget (OMB) approval under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) because RUS has already received all information required for analysis of the loans to be considered under this notice.
During FY 2002, $80 million will be made available for loans for the construction of facilities and systems to provide broadband transmission services in rural areas. The Broadband Pilot program is authorized by 7 U.S.C. 950aaa and the Agriculture Appropriations Act, 2002, Public Law 107-76 and is a continuation of the Broadband Pilot Loan Program initiated by RUS during FY 2001 pursuant to a NOFA published December 5, 2000, 65 FR 75920 (Initial NOFA).
The Initial NOFA announced that $100 million in loan funds would be available during FY 2001 on a first-come, first-served basis. The queue for considering and approving loans was established by the date on which the application was determined to be complete by RUS. During FY 2001, RUS approved for funding 12 applications totaling $100 million dollars. RUS currently has pending completed applications for broadband loans, submitted in response to the Initial Start Printed Page 3141NOFA, in the aggregate amount of $150 million.
Except as discussed below under “Response to Terrorist Events,” before accepting new applications for broadband loans, RUS will act on those completed applications it currently has pending based on the date on which RUS determined the application to be complete. Should loan funds remain available thereafter, RUS will publish a notice advising interested parties that it is accepting additional applications.
Drawing on experience gained in reviewing applications over the past year, this notice restates, clarifies, and provides additional information regarding the eligibility and application requirements and criteria RUS will consider in evaluating applications under the Broadband Pilot Loan Program.
After the $80 million provided for in this NOFA is committed, RUS will return any remaining loan applications to their respective applicants. Should financing beyond the $80 million become available for broadband transmission services, RUS will, by separate notice, announce the eligibility and application requirements, priority criterion and approval standards.
Applications from: Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Michigan, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Vermont, Virginia, West Virginia, Wisconsin, Puerto Rico, Virgin Islands: Mr. Kenneth Kuchno, Director, Eastern Area, Telecommunications, Rural Utilities Service, STOP 1599, 1400 Independence Avenue, SW., Washington, DC 20250-1599, Telephone (202) 690-4673.
Applications from: Alaska, Idaho, Iowa, Minnesota, Missouri, Montana, North Dakota, Oregon, South Dakota, Washington, Wyoming: Mr. Jerry Brent, Director, Northwest Area, Telecommunications, Rural Utilities Service, STOP 1595, 1400 Independence Avenue, SW., Washington, DC 20250-1595, Telephone (202) 720-1025.
Applications from: Arizona, Arkansas, California, Colorado, Hawaii, Kansas, Louisiana, Nebraska, Nevada, New Mexico, Oklahoma, Texas, Utah, American Samoa, Federated States of Micronesia, Guam, Republic of Marshall Islands, Republic of Palau, Commonwealth of the Northern Marianas Islands: Mr. Ken Chandler, Director, Southwest Area, Telecommunications, Rural Utilities Service, STOP 1597, 1400 Independence Avenue, SW., Washington, DC 20250-1597, Telephone (202) 720-0800.
As used in this notice:
Bandwidth means the capacity of the radio frequency band or physical facility needed to carry the broadband transmission services.
Broadband transmission services means providing an information rate equivalent to at least 200 kilobits/second in the consumer's connection to the network, both from the provider to the consumer (downstream) and from the consumer to the provider (upstream).
Eligible applicant shall have the meaning set forth in that paragraph entitled “Eligible Applicant.”
Eligible loan purposes shall have the meaning set forth in that paragraph entitled “Eligible Loan Purposes.”
Loan design shall have the meaning set forth in the paragraph entitled “Loan Design.”
Rural areas means any area of the United States not included within the boundaries of any incorporated or unincorporated city, village, or borough having a population in excess of 20,000 inhabitants.
Spectrum means a defined band of frequencies that will accommodate the broadband transmission services.
To be eligible for a loan, the applicant must meet the following conditions:
(1) The applicant must be a public body; an Indian tribe; a cooperative, nonprofit, limited dividend, or mutual association; an incorporated or limited liability company; or other legally organized entity. The applicant may not be an individual or a partnership.
(2) The applicant must have the legal authority to own and operate the broadband facilities, to enter into contracts, to borrow funds, provide security, and otherwise comply with applicable federal statutes and regulations.
Eligible Loan Purposes
Loans may be approved to finance the improvement, expansion, construction, acquisition and operation of facilities or systems to furnish or improve broadband transmission service in rural areas subject to the following:
(1) Loans may be approved to finance the acquisition of operating lines and facilities only if the acquisition is necessary to furnish or improve broadband transmission service in rural areas;
(2) Loans may be approved to finance the lease or purchase of spectrum rights and bandwidth necessary to provide the broadband transmission services;
(3) Loans may not be approved to finance operating expenses except in limited circumstances, such as for the initial operation of a new system, where RUS determines such financing will enhance feasibility of the loan and no other source of financing is available; and
(4) Loans may not be approved to finance the duplication of existing adequate broadband transmission services provided by others.
Minimum Loan Amount
Loans under this authority will not be made for less than $100,000.
Loans shall bear interest based on the United States Treasury rate for loans with comparable maturities and shall be repaid with interest within a period, not to exceed 10 years, that approximates the expected useful life of the facilities financed.
Except as set forth below under “Response to Terrorist Events,” RUS processes applications for loans for broadband transmission services on a first-come, first-served basis determined by the date on which the applicant submitted a completed application.
A completed application must include the following documentation, studies, reports and information satisfactory to RUS:
(1) Completed Standard Form 424, “Application for Federal Assistance.”
(2) Evidence that applicant is an eligible applicant.
(3) A loan design.
(4) Evidence that the proposed project will not result in the duplication of existing facilities providing adequate broadband transmission service.
(5) Description of the qualifications of applicant's management and key employees including relevant training and work experience.
(6) Financial feasibility studies, as described below.
(7) Proposed security arrangements for the loan.
(8) An environmental report on the project.
(9) Evidence that the applicant and the project will be in compliance with applicable laws.
Upon receipt, RUS reviews an application to determine whether the application is complete. If RUS determines that an application is not complete, it advises the applicant of requirements that must be met. Upon determining that the application is Start Printed Page 3142complete, RUS assigns an application completion date which establishes the order of the application in the loan queue with the earliest application completion dates evaluated first. A determination that an application is complete is not a commitment to approve the application. Applicants are advised in writing of their respective application completion dates and the availability of loan funds.
As of the date of this notice, RUS has a loan queue of completed applications in an aggregate amount well in excess of FY 2002 lending authority. Consequently, RUS is not now accepting additional applications.
A Loan Design should contain the following, satisfactory to RUS:
(1) A narrative discussing the proposed broadband transmission project including the costs of the project, all existing and proposed facilities that are a part of the project, the services to be provided by the project, the proposed service area, and the basis for subscriber forecasts;
(2) Engineering design studies providing an economical and practical engineering design for construction of the applicant's broadband project that includes a detailed description of the facilities to be funded and setting forth technical specifications, data rates, and costs;
(3) A map of the proposed service area reflecting the location of facilities and systems providing similar broadband services owned and operated by other entities; and
(4) Subscriber forecasts and supporting documentation including market surveys.
RUS will approve a loan only if, in RUS’ sole judgment, the loan will be repaid according to its terms within the time agreed. The applicant must provide RUS with studies, satisfactory to RUS, addressing the financial feasibility of the broadband project. The applicant should include in its application:
(1) Financial statements of the applicant for the last three years or for so long as the applicant has been in business if the applicant has not been in business for three years;
(2) A loan budget showing all costs of the proposed project and the amount of loan and nonloan funds to be used;
(3) A pro-forma five-year financial forecast including all revenues and expenses for the five-year period, a subscriber penetration forecast, and a detailed description of all associated assumptions;
(4) Depreciation rates for the equipment being financed; and
(5) Such additional information relating to financial feasibility as the borrower may choose to include after consulting with RUS.
RUS will approve a loan only if, in RUS’ sole judgment, the security therefore is reasonably adequate. Generally, RUS requires as security a first lien on all of the real and personal property that is part of the project financed by the loan, including any additional property relating to the project acquired after the date of the loan. RUS may require additional security, including, without limitation, a first lien on all real and personal property of applicant, and pledges of stock or other ownership interests in the applicant. RUS may also require that the applicant provide equity as a part of project or system financing.
RUS loan documents set forth additional requirements on the applicant with respect to providing and maintaining security including operational, financial, and investment covenants and controls.
RUS will consider, for approval, completed applications on a first-come, first-served basis as discussed above under “Application”. In order to approve a loan, RUS must determine that the application satisfies the following criteria:
(1) The project will provide broadband transmission services in rural areas in an efficient and economical manner;
(2) Loan funds will be used for eligible loan purposes;
(3) The applicant has the necessary expertise and experience to successfully complete and operate the project;
(4) The project is financially feasible and the loan will be repaid according to its terms;
(5) The security for the loan is reasonably adequate; and
(6) The applicant and the project will be in compliance with applicable laws.
If RUS concludes that the application satisfies the above criteria, RUS may approve the application, in whole or part, and prescribe terms and conditions applicable to the loan.
The applicant will be advised in writing of RUS loan approval and the expected timetable for delivery of loan documents for execution by the borrower.
If RUS does not approve the application, RUS will so advise the applicant in writing.
The terms and conditions of loans shall be set forth in loan documents prepared by RUS. On request, RUS will provide applicants with examples of notes, loan agreements, and security instruments developed for use in the Broadband Pilot Loan Program. However, the terms and conditions of each loan shall be determined on a case-by-case basis.
Among other matters, RUS may prescribe conditions to the advance of funds that address concerns regarding the feasibility of and the security for the loan. RUS may also prescribe terms and conditions applicable to the construction and operation of the project and the delivery of broadband transmission services to rural areas.
Other Federal Statutes and Regulations
Loan applications will be required to demonstrate compliance with all applicable federal statutes and regulations, including, among others, those relating to nondiscrimination in federally assisted programs, government wide debarment and suspension (non-procurement), government wide requirements for drug-free workplace, restrictions on lobbying, audits, architectural barriers, flood hazard precautions, and delinquent debt.
Applicants should contact the appropriate office identified above under “Agency Contacts” for additional information regarding any federal statutes and regulations which may apply to the project covered by the application.
Response to Terrorist Events
Current RUS borrowers are advised that section 770 of FY 2002 Appropriations Act, Public Law 107-76, provides as follows:
Notwithstanding any other provision of law, from the funds appropriated to the Rural Utilities Service by this Act, any current Rural Utilities Service borrower within 100 miles of New York City shall be eligible for additional financing, refinancing, collateral flexibility, and deferrals on an expedited basis without regard to population limitations for any financially feasible telecommunications, energy or water project that assists endeavors related to the rehabilitation, prevention, relocation, site preparation, or relief efforts resulting from the terrorist events of September 11, 2001.
Current borrowers qualifying under section 770 should contact the appropriate office identified above under “Agency Contacts” for additional information. Start Printed Page 3143Start Signature
Dated: January 11, 2002.
Hilda Gay Legg,
Administrator, Rural Utilities Service.
[FR Doc. 02-1666 Filed 1-22-02; 8:45 am]
BILLING CODE 3410-15-P