Tag Archives: USDA

The End of ReConnect?

USDA has proposed a budget for the next fiscal year, starting October 1, which contains drastic cuts for broadband. Overall, the agency is proposing to cut its overall discretionary funding by $4.9 billion, a 19% reduction. The cuts align with the proposed White House budget recommendations for the next fiscal year, that includes the following language:

USDA’s Rural Development programs are streamlined to focus on programs that have demonstrated efficient results and are an appropriate Federal role. . . No new USDA funding is needed for broadband expansion, as existing balances and other Federal resources are meeting planned growth. The Budget would also eliminate programs that are duplicative, too small to have macro-economic impact, costly to deliver, in limited demand, available through the private sector, or conceived as temporary. These include rural business programs, single family housing direct loans, self-help housing grants, telecommunications loans, and rural housing vouchers. Rural Development salaries and expenses are reduced commensurately.

Probably the biggest headline in the proposed USDA budget is that it completely eliminates the ReConnect grant program. The agency argues that ReConnect funding would be duplicative since  BEAD and other grant programs have eliminated the need for additional rural broadband infrastructure spending.

There is still $230 million remaining in the proposed budget for rural broadband, including $200 million in new broadband loans and $30 million in rural telehealth grants. The new budget claws back $40 million in unused funds still sitting unclaimed in the ReConnect pilot program.

This may not be the end of the ReConnect story, since Congress has the ultimate say in the budget. The program is still very popular with politicians. There have been several occasions in the past when Congress added funding for Reconnect during the reconciliation of the annual agriculture budget. As recently as November 2025, Senators Roger Marshall (R-Kansas) and Peter Welch (D-Vermont) introduced a bill that would provide $650 million annually through 2030 for ReConnect. But unless something like that bill happens this summer, the ReConnect program would be officially dead in October.

If ReConnect dies, there will be almost no remaining federal broadband grant programs. There is still $500 million available to NTIA for Tribal grants, but that’s the only remaining funding I am aware of. It would be a shame to see broadband grants disappear. Everybody who understands rural broadband knows that there will still be plenty of broadband gaps after BEAD grants are finally awarded. Some of these gaps will come from grant defaults. I’m hearing rumblings of BEAD defaults where ISPs will walk away from BEAD rather than sign the BEAD contracts. There will likely be more defaults of RDOF. There are a lot of projects funded by ARPA and the Capital Project Fund that won’t finish construction before the funding dries up at the end of this calendar year.

Defaulted grants aren’t the only places that won’t have good broadband. Jim Stegean, the president and CEO of CostQuest, which manages the FCC broadband maps, recently estimated there will be 2.1 million unserved or underserved locations left after BEAD. I think that number is conservatively small due to ISPs that claim 100/20 Mbps or faster in the FCC maps, but are delivering something slower. Not included in this estimate are the many urban MDUs that don’t have adequate broadband – something that was theoretically addressable by BEAD.

We’ll have to wait out the Congressional budget cycle, but unless somebody in Congress works hard to resurrect BEAD, the last broadband infrastructure grant program will soon be dead.

A New ReConnect

Senators Roger Marshall (R-Kansas) and Peter Welch (D-Vermont) have introduced a new bill that would fund USDA ReConnect grants with $650 million annually through 2030. It seems probable that, if passed, this would be the only federal grant program for the foreseeable future.

The requirements listed in the bill are pretty basic and reminiscent of prior rounds of ReConnect:

  • The funding can only be used in rural areas.
  • At least 75% of households in a grant area must be unable to buy broadband of at least 100/20 Mbps. Grants applicants will get priority if 90% of locations don’t meet that speed.
  • Constructed networks must provide speeds of at least symmetrical 100 Mbps.
  • The money can be awarded as grants, loans, or grant/loan combinations.
  • Applicants must make a 25% match, but this can be waived.
  • Grantees have five years to construct the network.

As I wrote recently, I believe there will still be many millions of locations left behind after the BEAD grants. But there are a few issues that will stop the proposed new ReConnect grants if not remedied:

  • If satellite is considered when looking at existing broadband coverage, then every place in the U.S. will be considered to have adequate broadband. The last round of ReConnect allowed applicants to disregard locations where the only fast broadband came from satellite and unlicensed fixed wireless. Without a similar exclusion, there will be no chance of creating a ReConnect grant serving area.
  • I believe there are many millions of locations where an ISP claims the capability to provide 100/20 Mbps in the FCC mapping data, but delivers slower speeds. Applicants need to have some reasonable way to challenge exaggerated FCC map data. In the last round of ReConnect, USDA largely accepted the FCC maps as gospel.
  • The requirement to propose service areas where at least 75% of locations don’t have fast broadband is based on an assumption that there are still entire neighborhoods that don’t have good broadband. The reality on the ground is that most places are a jumble of served and unserved locations mixed across the geography. The only way the 75% rule can be realistically met is if ISPs can cobble together a dozen little pockets of folks with poor broadband into a single grant application. USDA theoretically allows that, but practically, they have made this difficult. This will be totally impossible if USDA sticks with looking at broadband coverage at the hexagon level instead of at individual homes.

It would be very beneficial for USDA if the proposed bill gives the agency the authority to put together study areas that ignore satellite and that provide a reasonable way for applicants to ignore faulty FCC maps. I fear that, without that specific guidance in the new Bill, there is a decent chance that USDA will find itself paralyzed and unable to find grants that can work.

It’s not hard to picture the three broadband arms of the government at odds with each other in the near future concerning the definition of broadband. NTIA won’t want to see ReConnect used to ‘overbuild’ areas where BEAD awarded grants to satellite. It’s easy to imagine the FCC defending the broadband maps and not making it easy for USDA to ignore exaggerated speed claims.

I see this bill as a positive move. It’s bipartisan, which has normally been the case for rural broadband policy. But there are some real challenges to make this work, and if the legislation is the only guiding document for the USDA, I’m not sure it is enough to make a viable future ReConnect program.

The Future of ReConnect

I have to wonder if there is any practical future for USDA’s ReConnect grants. I raise this question after noting that the Senate Appropriations Committee recently approved the fiscal year 2026 budget for the Department of Agriculture. Buried within that budget is $100 million dollars for new ReConnect loans or grants. It’s still early in the federal budget process, and the $100 million slated for next year is a preliminary number, but it’s already lower than previous annual allocations to the program.

ReConnect has been a popular program, particularly with cooperatives and small telcos. ReConnect was launched in December 2018 by Congress with an initial budget of $600 million. Additional funds continue to be allocated, including $550 million in 2020 and $1.15 billion in 2021. USDA is still sitting on $980 million of remaining appropriated funds, but is also sitting on $3 billion in funding requests.

ReConnect has always been an interesting program. USDA can use the funding for grants, loans, or a combination of the two. The program is intended to bring broadband to unserved rural locations, and the ReConnect process gives extra consideration to locations that are not close to any towns or cities.

I ask if ReConnect will still be relevant in upcoming years for several reasons. First, if you believe the hype about BEAD grants, every location in the country will soon be slated to get broadband of at least 100/20 Mbps. According to the NTIA, every location that has been excluded from BEAD is already served by at least one ISP claiming 100/20 Mbps. That can be for any technology, including fiber, cable, DSL, fixed wireless, FWA cellular wireless, or satellite.

But ignoring that promise from BEAD, there will still be remaining unserved locations around the country. For example, there have been some recent defaults of RDOF subsidies that were defaulted too late to be included in BEAD, and there will be more. There will likely be defaults on funding commitments from other state and federal grant programs, including some from the BEAD program. It’s also possible ISPs could go out of business and leave rural customers with no option at 100/20 Mbps. This is certainly possible for WISPs if the FCC meddles with the CBRS and 6 GHz spectrum.

I’m also positive that there are a lot of locations where ISPs claim 100/20 Mbps or faster in the FCC maps but are delivering something slower. Perhaps future ReConnect grants will allow ISPs to ask for funding in areas where they can prove the FCC map is wrong.

Another issue with ReConnect is that the grant rules in the past have insisted on contiguous grant areas of unserved locations. Because of the odd rules of many of the existing grant and subsidy programs, particularly RDOF, there will probably be no big contiguous unserved areas after BEAD grants have been awarded. Any future ReConnect grant is going to require cobbling together scattered locations into a single grant request, and that will require changes in the ReConnect rules.

But I think the fundamental challenge for BEAD is that the FCC is likely to declare soon that the rural broadband gap has been solved and every rural home in the country is able to buy adequate broadband. I’m not sure the USDA will be able to overcome that presumption.

Eliminating Reconnect?

This is the third blog in a row about killing a federal broadband program – hopefully that’s it for a while. The most recent White House Budget proposes to eliminate the ReConnect grant program that is administered by the Rural Utilities Service (RUS), a branch of the U.S. Department of Agriculture. ReConnect has been a popular funding program in rural areas, and when it began was one of the few sources of federal broadband grants. ReConnect is an interesting program because awards include both grants and low-interest rate loans.

ReConnect has been funded in several different ways. The program was started in 2018 with a $600 million appropriation as part of funding the Department of Agriculture. Appropriations continued and provided $550 million in 2019, $655 million in 2020, and $437 million in 2022. In 2022, the program also got a giant boost of $1.926 billion through the Infrastructure Investment and Jobs Act, which also funded BEAD grants.

The rules for ReConnect have always focused on very rural places. Eligibility for the awards improve based on the distance between a grant area and the nearest significant population center. One criticism I’ve heard about the program is that it has favored ISPs who were already borrowers from the RUS loan program, and reviews of awards tended to show some validity of that assertion. I think this was aligned with the RUS’s desire to make safe awards to companies that will fulfill the projects they commit to build.

The stated reason for curtailing ReConnect is to consolidate federal broadband grant programs. There is also another reason. Once BEAD grants are finally awarded, it’s going to be increasingly difficult, and maybe impossible, to find any large tracts of unserved rural locations that fit the ReConnect criteria. A new iteration of ReConnect would require a significantly different definition of eligible areas.

ISPs have liked ReConnect because the staff at RUS is more knowledgeable about the issues of building broadband in rural America than folks at NTIA or the FCC. One of the aspects that doesn’t get discussed much is the administration of grant funding after awards are made. ISPs want to work with a grant office that understands the technology and the components of building a broadband network. I’m sure that ISPs who are currently working with RUS on existing ReConnect awards will be hoping that grant administration doesn’t change to another agency in midstream.

Congress purposefully put the ReConnect program at the RUS. The agency has been making loans for rural communications infrastructure since 1949. The loan program was one of the major funders for rural cooperatives and small telephone companies over the decades. The property units that a lot of industry engineers still use in designing networks were developed by the RUS many decades ago.

I don’t think we’re done with the need for broadband loans and grants. I think there will be many millions of rural locations that will still need better broadband after the dust settles from BEAD and other grant programs. The process of determining areas eligible for BEAD was a disaster. I could be wrong, and it’s possible that satellite broadband can beef up speeds and capacity to serve every rural home that wants good broadband. But if not, we’re still going to want additional future grants to finish what BEAD has started.

There is no guarantee that asking for the elimination of ReConnect in a budget means this is a done deal. But there is some sense in consolidating the federal effort focused on rural broadband. If this comes to pass, I’ll be a little sad that the folks who have been doing this since 1949 might not the ones to help finish the job.

Our Balkanized Broadband Leadership

Congress inserted an interesting requirement into the bill that reauthorizes the funding for the National Telecommunications and Information Administration (NTIA). Both the House and Senate added language that would require that a national broadband plan be created that would try to put the FCC, the NTIA, USDA, and other agencies on the same page. This legislation makes sense, because it’s clear that the three agencies do not coordinate in trying to solve broadband gaps – if anything they are competing and trying to one-up each other.

The House version of the new legislation was sponsored by Reps. Tim Walberg (R-MI.) and Annie Kuster (D-NH). The Senate version of the language was sponsored by Sens. Roger Wicker (R-Miss.), Ben Ray Luján (D-NM), John Thune (R-SD), and Peter Welch (D-VT.).

The genesis of the plan came from a GAO report from 2022 that said that there was a balkanized approach to federal funding programs aimed at solving the rural digital divide. That is putting it mildly. The three agencies seems to be stepping over each other trying to get headlines.

Just consider the last year. The NTIA has been working on getting the BEAD grant program going (at a pace that has been widely criticized as being far too slow and meticulous). Immediately after the NTIA announced the amount of BEAD funding that was to be allocated to each State, the FCC announced the new EA-CAM subsidy program for small telephone companies that covered many of the same locations that are eligible for BEAD. There is no conceivable excuse for the two agencies not to have coordinated this – and had the FCC announcement been considered, the BEAD funding would have been allocated differently to States.

The USDA also recently closed a new round of ReConnect grants on the eve of States getting ready to finally launch BEAD grants. This puts State Broadband Offices in a quandary with how to treat areas with a pending ReConnect grant – they won’t be able to make any grant awards for these area until Reconnect is resolved.

The GAO’s use of the word balkanized is now my favorite word for describing the federal broadband effort. The FCC’s RDOF program was a disaster from the beginning. A third of awarded RDOF subsidies ended up being canceled by the FCC or turned back in by ISPs. There are still ISPs defaulting on BEAD several years later, with recent announcements by Charter and Altice walking away from some RDOF areas. Even where RDOF was awarded, it butchered the rural landscape by creating a checkerboard (or Swiss cheese) in many counties of places covered and not covered by RDOF – making it incredibly hard to design a broadband solution for the remaining unserved pockets. The FCC also gave ISPs far too long to implement an RDOF solution – in some cases until 2028 – and a huge number of counties are still wondering today if the ISPs that won RDOF in their county will show up.

All of the grant and subsidy programs suffer by relying on faulty FCC broadband maps. I would rate the maps used to allocated RDOF as maybe a 2 out of 10. The FCC knew these maps were faulty but blazed ahead with a subsidy program that pretended the maps were perfect. It’s impossible in many cases to see any difference between areas included in RDOF and neighboring Census blocks.

The maps being used for BEAD have probably improved to a 5 out of 10. The biggest flaw in the BEAD maps is the inexplicable decision of the FCC to still allow ISPs to claim marketing speeds rather than something closer to actual speeds. There is a large number of rural ISPs that miraculously claim a speed of exactly 100/20 Mbps in the FCC maps, which blocks others from pursuing BEAD grants. The FCC thinks they have accounted for this problem by allowing for a map challenge process, without realizing that the counties that have the biggest broadband gaps are also the ones with barely any staff or budget – so the places that should have undertaken map challenges are doing nothing. The NTIA piled on top of the situation by creating a map challenge process for BEAD that is so technical and obscure that even well-funded counties can’t come close to putting up a decent challenge for places that everybody agrees don’t have good broadband.

Local governments are increasingly irate with all three agencies tackling broadband. The word balkanized doesn’t come close to describing the behavior of each agency that not only ignores what the other agencies are doing but seems hell-bent on sticking a thumb in each other’s eyes.

I have very little faith that the broadband coordination proposed by Congress will do the slightest bit of good. When President Biden came into office, he ordered the three agencies to coordinate efforts, which obviously fell on deaf ears. The only way to make the three agencies work together would be to put them under the same boss – and that’s not likely to happen.

I’ve predicted for quite some time that BEAD is going to miss millions of homes that should be classified as unserved and underserved. I have to think the federal agencies are already planning on how to blame each other when BEAD doesn’t work as promised.

Why ReConnect Now?

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.

Farming Use of Broadband

The U.S. Department of Agriculture (USDA) released its 2023 report on Technology Use (Farm Computer Usage and Ownership). USDA has released this report every two years since 2005. This year’s report was completed by surveying over 14,000 farms across the country. There are just under 2 million farms nationwide in 2023, down 9,300 since 2021.

Every report since 2005 has shown growing computer usage on farms. Following are the key statistics from the latest report and some comparisons to the past.

69% of farms now have a computer or tablet, up from 67% in 2021. This has grown from 55% in 2005.

85% of farms have some form of Internet access in 2023, up from 82% in 2021. This is up from 55% in 2005. Following are the forms of access at farms in 2021 and 2023 – note that farms can have more than one type of access.

‘                                                            2021    2023

Dial-up                                                  2%       2%

Broadband                                          50%     51%

Cellular                                                70%     75%

Satellite                                               19%     23%

Other                                                     2%       2%

The broadband category includes DSL, cable broadband, and fiber. The report doesn’t mention if the cellular category includes the new FWA cellular broadband offered by big cellular companies like T-Mobile and Verizon. It likely does since an additional 5% of all farms nationwide claim to have cellular connections in 2023 compared to 2021. It’s also likely that the increase in satellite usage is from Starlink, with 4% of all farms adding a satellite connection from 2021 to 2023. It seems likely that the Other category is mostly fixed wireless, but the 2% penetration seems low to me – I encounter a lot of farms using the technology.

31% of farms used the Internet to buy farm inputs (raw materials) in 2023, up from 29% in 2021.

23% of farms use the Internet to market and sell agricultural activity, up from 21% in 2021.

27% of farms in 2023 use precision agriculture, up from 25% in 2021. In some midwestern states – Illinois, Nebraska, North Dakota, and South Dakota – the percentage of farms that use precision agriculture has grown to over 50% of all farms.

What this report doesn’t talk about is the percentage of farms that want broadband and can’t get it. A huge amount of the areas covered by BEAD grants are in agricultural areas. My consulting firm does surveys and interviews, and we’ve heard from a lot of farmers who would do more with broadband if they had a better broadband connection.

A report at this high level also doesn’t discuss the creativity that we see with farmers. Many farmers have used a landline broadband connection and have extended it using homemade wireless networks to reach barns, silos, and structures around the farm.

The report also doesn’t talk about the complex software being used by many farms. I’ve interviewed several farmers over the last year who say that. many days. they feel more like an IT professional than a farmer.

It’s going to be interesting in another four or five years to see how many farmers are using broadband after rural grant broadband networks have been constructed.

Reinventing ReConnect

Your guess is as good as mine about whether Congress will ever pass the draft annual Agriculture Reauthorization Bill as written. It’s my understanding that the legislation includes new money for the ReConnect grant program that is administered by the Rural Utility Service (RUS), which is part of the Department of Agriculture.

This has been a successful grant program, and I know of quite a few rural projects that have been funded through these grants. The ReConnect grants only fund areas that are remote and include a test that gives priorities to grant areas that are the farthest distance from towns and cities.

There have been changes in the broadband industry that have made it harder each year to define a ReConnect grant area. The RUS grant rules favor grant requests that cover large contiguous areas. You can cobble together grant service areas that include multiple different geographic pockets of homes and businesses, but this involves a lot more paperwork.

It’s getting quickly harder to find big contiguous unserved areas. This started with the CAF II reverse auction and really came to fruition with the Rural Digital Opportunity Fund (RDOF). That subsidy program awarded subsidies by Census blocks, often widely scattered across a county. When I saw the first RDOF map, I quickly started thinking of RDOF as the Swiss cheese program. RDOF often chops rural areas into small pieces and leaves behind scattered pockets of homes that are not easy to aggregate into a grant like ReConnect.

This chopping up of grant areas continued as States and counties have been awarding broadband grants, often for grant areas that cherry pick the densest pockets of homes. This not only breaks the remaining unserved areas into more Swiss cheese, but it also makes it harder to justify somebody asking for a grant to serve the areas that are left over.

It’s going to get hard to find grant areas after BEAD grants start being awarded. The BEAD grants are supposed to bring broadband to all unserved locations in each state and hopefully also to the underserved. But I think everybody who understands the industry knows this will not happen as planned. There are already states that are saying that BEAD funding won’t cover everybody. There will be ISPs that don’t build everything they promised. There will be ISPs using technologies that won’t reach everybody as promised. There will be ISPs that financially fail and don’t finish the grant projects. And this won’t just be for BEAD – there are going to be plenty of areas supposedly covered by RDOF that won’t get the broadband they have been promised.

The biggest pile of places that won’t get broadband from BEAD are the millions of places that are still incorrectly identified on the FCC maps as served but which aren’t. These places won’t start to become apparent until after the BEAD grants are awarded and mapped and people living in areas with no good broadband start to make noise.

It’s very unlikely that the locations that get missed by RDOF and BEAD will easily fit into the current ReConnect grant template. ReConnect might be the only major ongoing grant program, and if ReConnect is going to reach the places left over from other federal grants, the RUS is going to have to make some significant changes.

First, it has to become easier to ask for funding for small pockets of homes. The RUS has purposefully given out a small number of large grants in each grant cycle to reduce its burden of monitoring the grant construction. But there are even more significant changes needed. For example, the RUS requires a substantial pledge of other assets to get an RUS grant. Unless somebody is already an RUS borrower, they are not likely to accept draconian collateral pledges for small grants.

Currently, the ReConnect grant is totally reliant on the FCC maps, and that has to change as well – because many of the places that will be missed with broadband will be incorrectly labeled as served by the FCC. The ReConnect process is complicated, it’s a challenge to input grant requests that must tie to penny while doing so in financial formats that nobody outside of the RUS understands.

In a post-BEAD world, any future grants are going to have to be creative, nimble, and able to bring solutions to small grant areas without a huge amount of paperwork. Unless the RUS is willing or able to change how it awards grants, this could be a grant program with very few future takers – and that would be a shame.

ReConnect Grants – Not for Everybody

Yesterday’s blog listed the major rules for eligibility for this year’s ReConnect grant. Today’s blog is going to point out important aspects of the programs that you should be aware of before deciding to apply.

Grant Application is a Bear. These grants require far more effort than any other broadband grant program. The required paperwork for filing is more like a formal loan application than a simple grant application. You cannot casually file for these grants, and if you omit documentation, you will likely quickly fall out of consideration.

Probably Large Awards. Past experience with this program would suggest that the RUS tends to make a small number of larger grants rather than a large number of smaller grants.

Awards Will Likely Include RUS Loans. Awards can be made as 100% grants, 50% grants/50% loans, or 100% loans. Applicants should be aware that 100% grants will be exceedingly difficult to win, so grant applicants should be prepared to accept an RUS loan. While RUS loans are at a good interest rate, many applicants cannot accept RUS loans. RUS loans will likely require a full asset pledge from a borrower, which is often impossible if you have other non-RUS debt. While these grants favor local governments, many local governments are unable to accept RUS loans because they can’t meet the pledge requirements. Standalone entities like government-owned utilities have a better chance. The loans are also made on the same basis as any bank loan, and an applicant must have a solid and solvent balance sheet and financial history.

Grant Scoring Will Eliminate Most Projects. Most potential applicants aren’t going to get out of the gate due to not scoring high on the grant rating scale. An applicant that fails in even a few scoring categories will likely not be considered. Study this scoring list carefully and be honest about your eligibility:

  • Rurality. 25 Points. Grant areas must be at specified distances from existing towns.
  • 25/3 Mbps. 25 Points. The grant allows serving areas that have existing speeds greater than 25/3 Mbps, but you are penalized in this scoring for serving underserved locations.
  • Poverty. 20 points. Points awarded based upon the level of poverty in the grant area as measured by the U.S. Census Small Area Income and Poverty Estimates (SAIPE) program.
  • Affordability. 20 points. Retail broadband rates must be affordable compared to existing area rates. Participants must offer a low-income product and be willing and able to participate in both the FCC Lifeline and Congress’s EBB programs. Note that an ISP must become an Eligible Telecommunications Carrier (ETC) to participate in Lifeline – not everybody is able or willing to do that.
  • Labor Standards. 20 Points. While the grants don’t require paying Davis-Bacon prevailing wages, there is a hefty scoring penalty for not doing so.
  • Tribal Lands. (15 points). Tribal entities or projects that are at least 50% on Tribal land will get the 15 points.
  • Non-Profit Entities. (15 points) Governments, non-profits, and cooperatives get extra scoring points. For public-private partnerships to get these points, the applicant must be one of these entities and be willing to own the assets and take on any RUS loans. You can’t partner with a city in name only.
  • Socially Vulnerable Community. (15 points) 75% of the proposed service area must meet the RUS’s definition of Socially Vulnerable Communities. This is related to poverty but favors communities that are economically stressed for reasons other than poverty.
  • Net Neutrality. (10 points) To get these points the applicant must pledge to accept the definition of net neutrality that the FCC scrapped in 2017.
  • Wholesale Services. (10 points). This is awarded to grant recipients willing to sell wholesale access to the network to other ISPs. This is generally described as open access.

That’s 175 total points to determine the most eligible projects. If you are not a tribe, aren’t partnered with a non-profit entity, or aren’t willing to offer open-access you’d already be 40 points down on the scale. If your project is too close to an existing city or town or includes some homes that have speeds greater than 25/3 Mbps, you could be down 50 more points. If you want to serve farmers instead of poor communities, you could be down 35 more points. These grants are definitely not for everybody. I recommend a realistic assessment of your likely score before you do any work towards chasing this grant. As is usual with federal grants, there will be desperate communities that will spend the time and money to pursue this grant with no chance of winning.

Require Extra Effort. These grants will also require an environmental and historic preservation review.

Farm Access to Broadband

The US Department of Agriculture has been measuring computer usage on farms and publishes the results every two years in its Farm Computer Usage and Ownership report. The most recently released report for 2019 was compiled by asking questions to 20,000 farmers. This is a large sample from the more than 2 million farms in the country.

One of the key findings of the report is that 75% of farms reported having access to to the Internet in 2019, up from 73% in 2017. The breakdown of farms by type of connection is as follows:

2017 2019
Satellite 23% 26%
DSL 28% 22%
Cellphone 19% 18%
Cable 16% 16%
Fiber 9% 12%
Dial-up 3% 3%
Other 2% 3%

There are a few notable highlights in these numbers.

  • First, farms are abandoning rural DSL, as are many other customers. If CAF II upgrades had been done right, the DSL category ought to at least be holding even.
  • I also find it surprising that fixed-wireless isn’t listed as a choice. Fixed wireless is now available in many parts of the country. While many WISPs today offer slow broadband speeds, this category of connections should grow as speeds improve significantly over the next few years.
  • It’s a national shame that 3% of farms are still stuck with dial-up.
  • Far too many farms still use their cellphone for Internet access.

The report is also an interesting way to look at general broadband availability in rural America. For example, a few states have a high fiber coverage rate to farms, such as North Dakota (61%), Montana (39%), and South Dakota (36%). Other states have practically no broadband to farms, such as California and Louisiana at 1%, and other states below 5% including Georgia, Michigan, New York, Ohio, Pennsylvania, and South Carolina.

The states with the biggest reliance on cellphones for farm broadband include Louisiana (52%), Michigan (37%), and Florida (34%).

The poor penetration rate of real broadband is further evidenced by the way that farmers conduct business. 49% of farmers used a desktop or laptop to conduct business in 2019 while 52% used their cellphone. 24% of farmers buy agricultural inputs over the Internet and only 19% use the Internet to sell their goods.

There has been a lot of press in the last few years talking about how technology is transforming farming. However, these innovations are not coming to farms that are stuck with dial-up, satellite or rural DSL technology.

We’ve seen that better broadband can come to farms by looking at the high fiber coverage of farms with fiber in Montana and the Dakotas. That fiber has been built using a combination of subsidies from the Universal Service Fund and low-cost loans from the USDA and cooperative banks. We know how to fix rural broadband – we just don’t have the national will yet to get it done.