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January 16, 2009 10:49 AM

An Alternative to Rural Broadband Grants: The Rural Fiber Fund

Goal: Spend stimulus dollars in the most effective and efficient way to equip rural America with the world-class broadband they both need and deserve.

Solution: The Rural Fiber Fund.

Fiber is our future. It's the only broadband that's considered true 21st century infrastructure, and only full fiber networks equal world-class broadband.

Whatever broadband we subsidize today rural communities will be left with for decades.
We should do this right the first time and make sure they're not left behind again.

The Rural Fiber Fund uses government guarantees to unclog billions from the capital markets to shovel-ready rural fiber projects, and sets communities on the path to a connected future.

The Rural Fiber Fund includes:

$5 billion of Government Guarantees
Partial loan guarantees available to all models of owner/operator/capital or
Backstop guarantees for municipal bond insurers.

Allocated on an sliding scale of density relative to percentage: >25HH*/40% to <10HH/60%

Guarantees cover all losses on this percentage of the total value of defaulted loans/bonds.

A fast-track approval process awards guarantees within 60 days to all market-ready projects. Once granted, projects have 120 days to secure capital before the guarantee expires.

$5 billion budget equals at least $20 billion in guarantees enabling $40 billion in investment.

* HH = premises per linear mile of inhabited road

$1 billion of Matching Grants
Available to all eligible communities

A 10/90 match where the federal government covers 90% of preplanning costs such as feasibility studies and engineering expenses while the community puts up 10%.

These grants could provide $100,000 to 10,000 rural communities.

Community - Communities must be <20,000 residents and not have a full fiber network.

Project - Projects can include communities up to 50,000 so long as the overall density of the project does not exceed 25HH. All projects must live up to the Network Requirements. Simultaneous wireless deployment is encouraged but can not exceed 20% of the total project.

Market-ready Project - Projects must be ready to take a government guarantee directly to the capital markets and once funds are available start deploying immediately.

Applicant - All owner/operator models are eligible with explicit legitimization of municipal models. All forms of capital can be guaranteed as well.

Network Requirements
Universal Access - RFF projects must build out to anyone wanting service in an exchange.

Open Access - RFF networks must pledge to follow the spirit of common carriage, with the specific requirements to sell bandwidth to anyone, to not interfere with legitimate Internet traffic, and to be transparent in any network management practices.

100Mbps to 1Gbps - RFF networks must be able to support at least 100Mbps of symmetrical in-network capacity to every home initially, and be scalable to 1Gbps in the near future.

Stimulus Impact
The Rural Fiber Fund Working Group includes more than $3 billion of shovel-ready rural fiber projects that can be approved within weeks and deploying in months, creating jobs.

Supporting communities with matching grants will set in motion a second wave of projects ready to apply for guarantees within months and be deploying before the end of the year.

And fiber will deliver more long-term benefits to rural America than any other broadband.

Loan guarantees can be distributed quickly through a streamlined RUS approval process.

Matching grants can be administered on a first-come-first-served basis by either RUS or NTIA.

To join the RFF Working Group add a comment below and we will contact you.

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