The USDA just announced a new round of ReConnect grants. These are grants that can only be used to serve the most rural places in the country, and one of the qualifications is the distance between the grant market and the nearest towns.

The new program provides $600 million in new funding, as follows:

• $150 million in grants that must include at least 25% matching
• $150 million is being offered as 100% grants with no matching for tribal areas
• $100 million is available as 50% grant and 50% USDA loan
• $200 million is available as 100% USDA loans.

There are a lot of grant scoring points awarded for serving areas with high poverty rates or that are socially vulnerable. The grants also favor projects that pay prevailing wages.

The homes served by the grants must not have any broadband available at speeds of at least 25/3 Mbps. A grantee must serve every home in a grant area. Anybody who has been following my blogs about the broadband maps knows that it’s not going to be easy to find a grant area that is rural and that has no homes where ISPs claim the capability to deliver speeds of at least 25/3 Mbps. A few other consultants I’ve talked to are wondering if there will be enough markets that can meet the ReConnect grant parameters.

But the oddest thing about these grants is the timing. This grant program was announced just as states are gearing up to award the much larger BEAD grants. Having both grant programs running concurrently is going to cause all sorts of problems for both ISPs and State Broadband Offices.

Two years ago, the Biden administration directed the FCC, the NTIA, and the USDA to coordinate everything associated with federal funding for broadband. It’s pretty obvious that there is no coordination happening.

Last year, the FCC released its A-CAM order only three weeks after the NTIA announced the BEAD allocations that would go to each State. The A-CAM program provides a subsidy to small, regulated telephone companies from the Universal Service Fund to upgrade rural broadband to speeds of at least 100/20 Mbps. The timing of the FCC announcement made no sense because the allocation of BEAD funding to states would have changed significantly had the A-CAM locations been removed from the universe of unserved locations before the allocation to states.

The timing of the FCC announcement gave the appearance of the FCC wanting headlines about how it’s tackling rural broadband right after NTIA got all of the headlines. It’s impossible to believe that the FCC couldn’t have provided this information to NTIA before the $42.5 billion was allocated.

It’s hard to imagine how State Broadband Offices can handle the concurrent grant program. What does a State do with an area where there is a pending ReConnect grant? They can’t take it off the table because the ISP might not win the ReConnect grant. If the State awards a BEAD grant in the same area as a ReConnect award, they will probably be duplicating or overlapping the ReConnect grant.

An ISP considering a ReConnect grant has a similar dilemma. Should they also apply for a BEAD grant for the same area to be safe? What does an ISP do if a State awards a BEAD grant in some portion of the ReConnect area before the ReConnect awards are announced?

It’s not hard to understand why the USDA did this because once BEAD grants start getting awarded, there might not be many places left that meet the ReConnect eligibility rules. Both grant programs provide grants to the same areas.

It’s clear that the FCC and USDA ignored the White House directive to coordinate grants and have done the opposite. I have to frankly wonder how much of this boils down to policymakers who want to make grant awards for the headlines and photo ops at ribbon cuttings. This duplicate effort is not making it any easier to solve the rural broadband gaps.