NCTA’s Letter to Vilsack Juxtaposes Rural Associations’ Earlier Plea

Vilsak, USDA Hit with Mixed Messages about USF/ICC Reform

A letter to Secretary of Agriculture Tom Vilsack from National Cable and Telecommunications Association (NCTA) ceo Michael Powell illustrates that one group’s perceived “sword of Damocles” is another group’s perceived “well-considered work of an expert agency.” Last month, rural associations NTCA, OPASTCO and WTA wrote to Vilsack, pleading for assistance and input from RUS and the White House Rural Council in the fight against the FCC’s USF/ICC Reform Order. On January 30, 2012, Powell likewise appealed to Vilsack, but with a very different message than the one conveyed by the rural associations. NCTA argued that the rural associations presented a “’downside only’ approach which does not withstand scrutiny;” and the USF Reform Order actually “recognizes the important role that rural telephone companies have played in brining voice and broadband services to high-cost areas of the country and it provides those companies significant benefits not afforded to competitors.”

NCTA goes on to explain that the USF Reform Order allows for $2b in high-cost support just for rural telephone companies, sets in motion a very long transition to bill-and-keep; and if that isn’t enough, there’s a waiver process as a backstop. NCTA tells Vilsack, “In light of the significant benefits provided to rural telephone companies in the USF Reform Order, it is disappointing that these companies are encouraging your agency to interfere with the Commission’s implementation of the new regime.” NCTA furthermore encourages RUS to revise its financial models, and “revise its approach so that it no longer makes loans that depend on continued receipt of high-cost support in areas where other providers are offering robust, competitive broadband services.” NCTA asserts that continuing to provide loans for rural telephone companies in competitive markets “wastes scarce government resources and jeopardizes private investment made in those rural areas, often by small cable operators.”

NCTA’s comments stand in stark contrast to the sentiments of the rural associations. Cable providers frequently complained of being slighted in the USF/ICC Reform proceeding, for example, by not being included in the Consensus Framework—so it may come as a bit surprising that NCTA is now applauding the FCC’s efforts, particularly efforts that directly harm rural telephone companies, many of whom are also cable providers.

Will Vilsack pick up the glass that’s half full (cable), or that glass that’s substantially more than half empty (RLEC)?

Agriculture Secretary Vilsack Comments on USDA's Fiscal Year 2011

Source: USDA Press Release

In the federal fiscal year that ended on September 30, Agriculture Secretary Tom Vilsack said Rural Development, through its Business, Cooperative, Utilities and Housing programs provided housing opportunities for over 143,000 families, upgraded community facilities, boosted the reliability of the electric grid, funded renewable energy projects, and through the Community Connect and other broadband programs supported efforts to provide affordable, reliable Internet service to rural homes.

The largest portion of FY 2011 funding, 63 percent, supported fee-generating loan guarantees that enabled private lenders to safely increase the pool of capital available in rural areas for credit-worthy businesses, communities and homebuyers, without direct cost to the Government. 

Among other examples, Vilsack said Kansas, Hayes-based Rural Telephone is using USDA support to extend broadband service to communities it has served since 1952. Free broadband service will be provided to area libraries.

About 34 percent of Rural Development investments last year were made in the form of secure, affordable direct loans that will be paid back to the government, with interest. Through its Rural Utilities programs Rural Development provided more than 800 direct loans to help small communities install or upgrade water systems, dispose of waste and upgrade landfills to protect environmental quality. USDA also provided technical assistance and training grants to communities to ensure that the newly installed systems are maintained.

Vilsack noted that grants leveraging significant public and private investments constitute roughly three percent of Rural Development's FY 2011total funding nationwide. This funding was targeted at forming the building blocks of economic development, such as basic infrastructure, renewable energy, technical assistance, education and workforce training efforts.

Secretary Vilsack noted that the agency's cost of doing business is less than two cents for every dollar invested in the future of rural communities. Last year, USDA Rural Development continued to streamline service delivery and cut regulations that stifle job creation. The agency is also engaged in ongoing White House Rural Council roundtable meetings with business and community leaders to hear their ideas on how to grow the economy.

Vilsack Announces Additional Telco Funding to Expand Rural Broadband

Source: USDA Press Release

Agriculture Secretary Tom Vilsack announced funding for telephone utilities to build, expand and improve broadband in their rural service territories across 15 states. The announcement was made on the Secretary's behalf by USDA Rural Utilities Service Deputy Administrator Jessica Zufolo during an address at the annual meeting of the National Association of Regulatory Utility Commissioners in St. Louis, MO.

The following list of awardees will receive $410.7 million in funding, contingent upon the recipient meeting the terms of the agreement with USDA.

Colorado

• Eastern Slope Rural Telephone Association, Inc.--$18,725,000 will be used to upgrade the existing fiber-to-the-node (FTTN) network, capable of providing modern broadband services to subscribers in 10 exchanges.

Idaho and Utah

• Albion Telephone Company--$17,075,000 in loan funds will be used to install 453 miles of buried fiber optic cables throughout the proposed FTTP system, providing nearly 60 percent of subscribers with FTTP.

Illinois

• McNabb Telephone Company--$3,700,000 in loan funds will be used to make system improvements, including constructing new FTTP facilities. A total of 115 miles of buried fiber optic cable will be deployed to improve service to subscribers.
• Shawnee Telephone Company--$30,286,000 in loan funds will be used to construct FTTP facilities, allowing Shawnee to provide voice and data services at speeds of up to 100 Mbps to both residences and businesses.
• McDonough Telephone Cooperative, Inc.--$15,728,000 in funds will be used to upgrade the rural areas with FTTH technology. Approximately 766 miles of buried fiber cable will be deployed to provide over half of the subscribers with access to improved broadband service. McDonough has been serving its rural subscribers for over 60 years.

Indiana

• Perry-Spencer Rural Telephone Cooperative, Inc.--$29,139,000 in loan funds have been awarded to Perry-Spencer Rural Telephone Cooperative Inc., (PSC) which provides telecommunications services to nearly 6,000 subscribers over approximately 1,150 square miles in southern Indiana. This loan will enable PSC to start the process of designing and building FTTP to enhance broadband services across the service area.

Iowa

• Mediapolis Telephone Company--$13,401,000 in loan funds will be used to make system upgrades to the transport system and the network architecture from the existing copper Digital Subscriber Lines (DSL) to FTTP broadband systems.
• Griswold Cooperative Telephone Company--$12,747,000 in loan funds will be used to complete a system-wide FTTP network, enhancing broadband service to all subscribers.
• La Porte City Telephone Company--$9,867,000 in loan funds will be used to make system improvements, including installation of a FTTP broadband network that will serve all of the borrower's subscribers. A total of 297 miles of buried fiber optic cable will be deployed, enabling downstream data rates of up to 20 Mbps.

Kansas

• The S & T Telephone Cooperative Association--$29,814,000 will be used to implement a full FTTH design to allow the migration to 10-20 Mbps broadband speeds to all subscribers and to provide IPTV in the near future.

Minnesota

• Paul Bunyan Rural Telephone Cooperative--$19,749,000 in Rural Development Broadband Loan Program funds will be used to extend Paul Bunyan's existing FTTH network to serve the exchanges of Park Rapids Rural and Trout Lake in North Central Minnesota. With this extension of their network, Paul Bunyan will be able to provide advanced telecommunications services to over 45,710 establishments (households and businesses) across all service areas. Paul Bunyan has been operating since 1952 and has been a telecommunications borrower with the Rural Utilities Service since 1953.

New Mexico

• Roosevelt County Telephone Cooperative, Inc.--$12,358,000 will be used to deploy new equipment and install FTTP equipment to enhance the broadband network.

North Dakota

• BEK Communications Cooperative--$26,746,000 in loan funds will be used to expand a FTTH broadband system. Upon completion of this RUS-funded project, 100 percent of BEK's subscribers will be served by fiber.
• SRT Communications, Inc.--$24,832,000 in loan funds will be used to install 2,143 miles of buried fiber optic cable and related equipment throughout the proposed FTTP system. The FTTP system will be constructed in areas outside of towns in twelve of the borrower's twenty-six exchanges. The service areas in the towns will continue to be offered DSL at speeds of at least 55 Mbps with its relatively new copper plant.
• Polar Communications Mutual Aid Corporation--$32,939,000 in loan funds will be used to expand the Borrower's FTTP broadband system throughout the borrower's eighteen exchanges. The upgraded system will help meet current and future requirements for delivery of voice, video and high speed data to subscribers. Upon completion of this RUS-funded project, 100 percent of Polar's subscribers will be served with broadband via various technologies.

Oklahoma

• Terral Telephone Company--$4,855,000 in loan funds will be used to convert the existing copper network to a FTTH system, and connect new subscribers. The proposed FTTH deployment includes construction of over 62 miles of fiber plant in and around Terral, and the replacement of the existing softswitch and power plant. This FTTH deployment will create nine jobs and save seven jobs.

South Carolina

• Sandhill Telephone Cooperative, Inc.--$5,930,000 will be used to provide for system improvements, including purchase of a new switch.

Tennessee

• North Central Telephone Cooperative Corporation--$27,069,000 will be used to upgrade portions of North Central's outside plant and network infrastructure by deploying a FTTP network.

Washington

• Inland Telephone Company--$24,823,000 in loan funds will be used to expand Inland's FTTP broadband system and connect new subscribers.
• The Toledo Telephone Co., Inc.--$18,091,000 in loan funds will be used to install 292 miles of buried fiber optic cables and related equipment throughout the proposed FTTP system, offering enhanced service to all Toledo subscribers.

Wisconsin

• Union Telephone Company--$13,308,000 in loan funds will enable Union to deploy approximately 336 miles of fiber, which will provide approximately 60 percent of Union's subscribers with access to improved broadband services.
• Marquette-Adams Telephone Cooperative, Inc.--$19,781,000 Marquette-Adams will use loan funds to complete a system-wide FTTP network, including over 370 miles of new or modified buried fiber, providing enhanced broadband service to all subscribers.

More Rural Broadband Loans Announced as Past Recipients Wait On Funds

Source: The ILEC Advisor

The USDA announced recipients of $103m in Telecommunications Infrastructure loans and Community Connect grants earlier this week, with the funds targeted to provide rural and low income areas with next generation broadband connectivity. While the awardees in this funding round are eager to get their projects off the ground, at least one past recipient is still waiting for its funds to arrive. Adam Brissette profiles the most recent broadband loans and grants.

Read more here.

Agriculture Secretary Points to Vital Role of Rural Telcos

Source: NTCA Press Release

Rural America "really matters" to the country and "no one in the government is more concerned than the U.S. Department of Agriculture" about the role of rural telecom providers in ensuring economic and other opportunities in rural communities, USDA Secretary Tom Vilsack told more than 500 attendees at the National Telecommunications Cooperative Association's Legislative & Policy Conference in Washington, D.C.

Noting his concern about the aging population in rural America and the decline of rural communities, Vilsack said that "a revitalized rural economy" is needed to counter the decreasing rural population and to provide opportunities for children who grow up in rural communities to remain in those areas. He said the work being done by rural telcos to create the nation's 21st century communications infrastructure is "so vital, so important" to ensuring that that rural communities remain viable.

While he acknowledged the need to "be careful about what we spend" in stimulating economic growth in rural America, Vilsack said rural communications providers play a critical role in that economic growth and development because they provide the connections needed for farmers and ranchers, consumers, students, medical and public safety personnel to serve rural communities and benefit the nation as a whole. Sen. Mark Begich (D-Alaska) delivered a pre-recorded video address to attendees because he was in his home state for the monthly congressional district work period. Begich, a member of the Commerce, Science and Transportation Subcommittee on Communications, Technology and the Internet, told conference attendees that their relationships with their congressional representatives are critical to helping educate policy-makers about the value of rural communications providers and the role they play in sustaining rural communities.