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Local Dial-Up Internet Grants

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Rural Utilities Service, USDA.


Notice of funds availability.


The Rural Utilities Service (RUS) announces the availability of grant funds to finance the acquisition, construction and installation of equipment, facilities and systems to provide local dial-up Internet access services in rural America. Two and a half million dollars in grant funds is available, through a Pilot Program, to encourage eligible entities to provide Internet service to rural consumers where such service does not currently exist. This program will provide grant funds, on a competitive basis, to entities serving communities up to 20,000 inhabitants to ensure rural consumers enjoy the same quality and range of telecommunications services that are available in urban and suburban communities. Applications for grant funds will be accepted through August 20, 2002.


Applications for grants will be accepted as of the date of this notice through August 20, 2002. All applications must be delivered to RUS or bear postmark no later than August 20, 2002.


Applications are to be submitted to the Rural Utilities Service, U.S. Department of Agriculture, 1400 Independence Avenue, SW., STOP 1590, Room 4056 South Building, Washington, DC 20250-1590.

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Roberta D. Purcell, Assistant Administrator, Telecommunications Program, Rural Utilities Service, 1400 Independence Avenue, SW., STOP 1590, Washington, DC 20250-1590, Telephone (202) 720-9554, Facsimile (202) 720-0810.

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Information Collection and Recordkeeping Requirements

The reporting and recordkeeping requirements of this Notice have been approved by the Office of Management and Budget (OMB) under Control Number 0572-0125 pursuant to the Paperwork Reductions Act of 1995 (44 U.S.C. Chapter 35).

General Information

For FY 2002, $2.5 million in grants will be made available for the construction and installation of facilities and for other costs as RUS deems necessary to provide local dial-up Internet services in rural areas where it currently does not exist. This program is authorized by 7 U.S.C. 950 aaa.


Applications will be accepted as discussed previously in the Dates section of this notice. All interested parties are strongly encouraged to contact the RUS official listed in the For Further Information Contact section of this notice to discuss its financial needs and eligibility, prior to sending an application to the address listed in the Addresses section of this notice. RUS will make available, to interested applicants, an application guide that further details the requirements and procedures for submitting an application. Applications will be scored and processed on a competitive basis.

Use of Grant Funds

Grant funds may be used to finance the acquisition, construction, and installation of equipment, facilities, and systems to provide local dial-up Internet service in rural areas where it currently does not exist. Grant funds may also be used to fund lease costs for transmission equipment, facilities, and systems for up to two years.

Size of Grants

The maximum amount of a grant award to an applicant under this program is $400,000. The minimum amount to be considered is $10,000.

Definition of Internet

As used in this notice, the term Internet means a world wide collection of interconnected computer networks and users that share a compatible means of interacting with one another for the purpose of exchanging electronic data.

Definition of Local Dial-Up Internet Services

As used in this notice, the term local dial-up Internet service means a connection to the internet made using a voice grade circuit to the local public switched telephone network (PSTN) that does not incur any additional or per call charges. Where the PSTN does not support, as an engineering matter, local dial-up access, the Administrator of RUS will consider satellite or other methods of access as meeting the intent of this definition.

Definition of Rural Area

As used in this notice, rural area 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.

Grant Terms

For FY 2002, $2.5 million in grants will be made available to eligible applicants. Grants will be awarded to eligible applicants based on their score (starting with the highest scoring application) in comparison to other applications until the $2.5 million appropriation is utilized in its entirety. The grants will be awarded on a competitive basis, based on the scoring criteria outlined below.

Eligible Applicants

Grants may be made to legally organized entities providing, or proposing to provide, local dial-up Internet services in rural areas. Eligible entities may be public bodies, commercial companies including limited liability companies, cooperatives, nonprofits, and limited dividend or mutual associations.

Matching Funding

No match funding is required.

RUS Findings

(1) Project Sustainability. An applicant shall provide RUS with satisfactory evidence to enable the Administrator to determine that the project utilizing grant funds will be sustainable for a minimum of five years. Factors used in making this determination include, but are not limited to:

(i) Evidence of sufficient revenues from the system in excess of operating expenditures (including maintenance and replacement); and

(ii) Reasonable assurance of achieving market penetration projections upon which the grant is based.

(2) Nonduplication. An applicant shall provide RUS with satisfactory evidence to enable the Administrator to determine that no local dial-up internet service, without regard to quality of such service, exists in the area proposed to be served by the applicant using grant funds.

Grant Application

Applications should be prepared in conformance with the provisions of this notice and applicable USDA regulations including 7 CFR parts 3015, 3016, and 3019. Applicants must submit a completed Standard Form 424, “Application for Federal Assistance,” a narrative grant proposal, and all required supporting information and documents. An application must include a project description that contains plant designs, a subscriber forecast, and the basis for that forecast. The narrative must also specifically and Start Printed Page 42234clearly address the scoring criteria set out below. Other items include:

(1) Certified financial statements, if available;

(2) 5 years of pro-forma financial information, evidencing the sustainability of the project;

(3) An environmental report, satisfactory to RUS;

(4) Depreciation rates, based on current industry standards, for the equipment being financed (acceptance of such rates will be subject to RUS approval);

(5) A sketch or map showing existing and proposed service areas;

(6) A description of the current level of service available;

(7) Information on the owners and principal employees' relevant work experience that would ensure the success of the project; and

(8) All other required forms for Federal assistance and compliance with other applicable Federal statutes.

Review of Grant Applications

All applications for grants must be delivered to RUS at the address listed above or postmarked no later than August 20, 2002 to be considered eligible for FY 2002 grant funding. RUS will review each application for conformance with the provisions of this Notice. RUS may contact the applicant for additional information or clarification. Incomplete applications will not be considered. Applications conforming with this Notice will then be evaluated competitively by a panel of RUS employees selected by the Administrator and points awarded as described in the Scoring Criteria section below. The applications will be ranked and grants awarded in rank order until all grant funds are expended.

Scoring Criteria

Grant awards will be made based on the following scoring criteria as determined by RUS:

(1) The need for services and benefits derived from services (up to 40 points). This criterion will be used by RUS to score applications based on the documentation in support of the need for services, benefits derived from the services proposed by the project, and local community involvement in planning, implementing, and financial assistance of the project. RUS will consider the extent of the applicant's documentation explaining the challenges facing the community; the applicant's proposed plan to address these challenges; how the grant can help; and why the applicant cannot complete the project without a grant.

(2) The economic need of the applicant's service area as determined by per capita personal income by County, as determined by the Bureau of Economic Analysis, U.S. Department of Commerce, at​bea/​regional/​reis/​ (up to 40 points). Applicants will be awarded points as outlined below for service provided in each county where the per capita personal income (PCI) is less than 70 percent of the national average per capita personal income (NAPCI):

(i) PCI is 70 percent or greater of NAPCI; 0 points;

(ii) PCI is less than 70 percent and greater than or equal to 60 percent of NAPCI; 10 points;

(iii) PCI is less than 60 percent and greater than or equal to 50 percent of NAPCI; 20 points;

(iv) PCI is less than 50 percent and greater than or equal to 40 percent of NAPCI; 30 points;

(v) PCI is less than 40 percent of NAPCI; 40 points;

If an applicant proposes significant service in more than one county, an average score will be calculated based on each counties' individual scores.

(3) Project services USDA designated EZ/ECs (Empowerment Zone and Enterprise Communities) (10 points) or USDA designated Champion Communities (5 points).

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Dated: June 13, 2002.

Hilda Gay Legg,

Administrator, Rural Utilities Service.

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[FR Doc. 02-15720 Filed 6-20-02; 8:45 am]