Notable Happenings in the Farm Bill

Our friend Ken Kalz from Power & Tel (www.ptsupply.com) sent us this good summary of notable happenings in the Farm Bill:

The Bill:

Passed the Senate on June 10^th; Final passage unclear; the House still needs to pass its own bill and reconcile it with the Senate version. The current Farm Bill extension expires on September 30, 2013.
In addition to an extension of previous grant and loan provisions, establishes a rural gigabit network pilot program in an amendment by Sen. Pat Leahy (D-VT) (details below).
Directs RUS to prioritize areas with less than 20,000 residents, suffering population loss, high-numbers of low-income households and “isolated from other significant population centers.

Other Notable Amendments:

Sen. Mark Warner (D-VA): Requires any recipient to participate in the National Broadband Map, and to provide address-level data.
Sen. Tom Coburn (R-OK): Requires funding projects only in areas that do not have broadband service; would require granular and accurate broadband availability data (National Broadband Map).
Sen. Sherrod Brown (D-OH): Requires USDA to study broadband adoption in rural areas prior to making any grant and loan.

Generally, the Broadband provision of the Farm Bill enjoys widespread support across party lines, but Senators are becoming interested in justifying how this money is being spent, partially due to budget pressure and also pressure from the cable industry lobby (see below).

Potential New Problems for Deployments:

The Senate version sets 4 Mbps download and 1 Mbps upload speeds as a minimum; if an area does not have at least one provider offering that level then it’s eligible. To prove it the lack of service has to be “certified” by the affected community or demonstrated on a State or National Broadband Map.

Certification would be the only option in most cases because there are currently no maps with the required “address-level data”.
The national map tracks broadband speeds by tiers (e.g. 768 Kbps to 1.5 Mbps, 1.5 to 3 Mbps and 3 to 6 Mbps). Unless the tier definitions are changed and all the data is re-collected (a process that would take years) there’s no way to tell if an area has 4 Mbps down or 1 Mbps up.
The bill doesn’t outline a “certification” procedure, so those details would have to be worked out by RUS.

All of this will add cost and delays to broadband project proposals.

Leahy Amendment Details:

Allows RUS to invest in up to five ultra-high speed networks in rural areas over the next five years
Seems to be in reaction to the Google Fiber project.
The program would not require new funding but would be funded through the existing RUS program.
Up to the RUS to determine where the gigabit networks would be built and the selection process would be similar to the one used today in awarding RUS grants and loans.
Not guaranteed (the House has not discussed such a plan), spread over 5 years and uses existing money - not exactly a boon to the entire industry and likely won’t mean anything to us.

Cable Industry Lobbying:

The NTCA backs the Warner amendment that would require at least 25% of the households in an RUS broadband loan application to be unserved, with a carveout for systems serving fewer than 7,500 residents. NCTA has long complained that the RUS program has no requirement that the money goes to unserved areas. The RUS modified its rules in 2011 after a USDA Inspector General's report that highlighted the overbuilding. NCTA says that the changes RUS made in the wake of that report do not resolve the overbuild issue. "The fact is these rules still allow loans in areas that are 100 percent served. Currently, there is no requirement that a single unserved household be included in the project's service area in order to earn funding approval."