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Rural Development1400 Independence Ave.Washington, DC 20250www.usda.gov/rus/
Presenter:
Kenneth Kuchno
Director, Broadband Division
Telecommunications Program
NARUCNARUC
Summer MeetingSummer Meeting
July14, 2007July14, 2007
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More than $5.7 billion invested in rural telecommunications infrastructure
Almost 2 million rural homes and businesses have received access to high-speed broadband connections
More than $251 million in Distance Learning/Telemedicine grants and loans have been awarded to rural health and education providers
Rural Development Utilities ProgramsRural Development Utilities Programs
Nationwide Investment
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Broadband Loan Program: Status and ResultsBroadband Loan Program: Status and Results
• Established by the 2002 Farm Bill.
• As of July 13, 2007, 72 loans have been made for approximately $1.25 billion to
finance facilities in 40 states.
– Projects proposing to serve more than 582,000 households
– 1,263 communities
11%
53%
26%
7%3%
Completed In Progress Not Started Rescinded Defaults
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Broadband Loans…Statistics
203 Applications Received
Totaling $4,430,000,000
Applications Processed as of July13, 2007
72 Approved $1,250,000,000
21 In Review $ 963,000,000
110 Returned $2,217,000,000
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Broadband Loan Program: Status and Broadband Loan Program: Status and ResultsResults
• Unserved and Underserved Communities
– Approximately 40% of the communities approved for funding were unserved at the time of loan approval.
– An additional 15% had only one provider at the time of loan approval
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Broadband Loan Program: Technology NeutralBroadband Loan Program: Technology Neutral
TECHNOLOGIES APPROVED
1% 20%
25%18%
36%
Broadband Over PowerLine (BPL)DSL
Fixed Wireless
Hybrid/Fiber Coax
Fiber to the Home
As of 7/13/2007As of 7/13/2007
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The Cost to Deploy Broadband
Least Expensive: Unlicensed WirelessMost Expensive: FFTH
On average, when considering all the technologiesfunded (community populations ranging from 200 – 19,000):
$2,150 per Household Served $990,000 per Community Served (based on estimates not actual costs)
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Broadband Loan Program: Technology NeutralBroadband Loan Program: Technology Neutral
TECHNOLOGIES PENDING
5%
0%
38%
14%
43%
Broadband Over PowerLine (BPL)DSL
Fixed Wireless (1/2Licensed)Hybrid/Fiber Coax
Fiber to the Home
As of 7/13/2007As of 7/13/2007
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Broadband Loan Program: Types of Organizations Broadband Loan Program: Types of Organizations FundedFunded
3%
51%38%
7% 1%
Municpalies Corporations LLC's Cooperatives Tribal Authority
One Size Does Not Fit All…
•Private/public partnerships
•Traditional telephone companies enhancing service offerings
•Local service providers serving one or a few local communities
•National service providers providing service to multiple communities, even multiple states
•Municipalities
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Broadband…Direct Cost-of-Money Rates
5.26%5.09%5.02%4.98%
0%
1%
2%
3%
4%
5%
6%
5-yr 7-yr 10-yr 20-yr
Loan Term
Inte
rest
Rat
e (%
)Amortization period from 5 – 20 years based on useful economic life of facilities funded.
As of July 12, 2007
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Definition of Broadband
Currently
200 kilobits per second
both upstream and
downstream
In the Future
1 Megabits???????
5 Megabits???????
50 Megabits??????
or even
100 Megabits?????
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Raising the Speed for Rural America:
• Overall cost of broadband system may increase.
• Backbone requirements go up.
• Cost to consumer probably goes up.
• Certain technologies may no longer have the capability to deliver broadband service.
• The outliers may not get this service.
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Broadband Service Offerings
• Wireless: 128K/128K: 512K/256K: 2M/1.5M 4M/2M
• HFC: 256K/256K: 3M/128K: 1.5M/384K: 2M/512K: 4.5M/640K
• FTTH: 512K/256K: 3M/768K: 2M/1M: 10M/10M
• BPL: 256K/256K: 1M/1M: 3M/3M (only 1 application)
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Rural Broadband Access Loan and Loan Guarantee Program
• Proposed Rule published.
• Comment period has ended.
• 32 comments received.
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Who submitted Comments?
http://www.usda.gov/rus/telecom/1738-onlinefilings.htm
• American Cable Ass.
• CTIA
• NRECA
• NRTC
• NCTA
• NTCA
• USTA
• Vermont Dept. of Public Service
• Nextwave Wireless
• Rural Telephone Service Co.
• Suddenlink
• OPASTCO
• QWEST
• Mediacom
• IA Telecom Service
• US Chamber of Commerce
• MidState Consultants
• Nextwave Wireless
• PCIA
• WTA
• North American Equipment Dealers
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Broadband Success
Air Advantage, LLC: • Community Connect Grants:
2003: Unionville, Michigan (Pop. 605) $214,532
2003: Port Hope, Michigan (Pop. 310) $219,176
• Broadband Loans:
2004: 43 communities, $1,500,000
2005: 12 communities, $1,028,000
2007: Pending application to handle addition customers, $1,000,000
Exciting Fact: Today they are serving 55 mid-Michigan communities and providing service to 3,500 rural Michigan customers with a wireless system
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Rural America
Let’s not forget the most Rural Americans and let’s strive to get all Americans Affordable, Dependable,
and Quality Broadband Service.
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Kenneth Kuchno
Director, Broadband Division
Telecommunications Program
(202) 690-4673
Rural Development Utilities ProgramsRural Development Utilities Programs