Senator Kirsten Gillibrand (D-N.Y.) has introduced a bill that would give the Department of Agriculture the ability to issue grants for up to 50% of construction costs for broadband networks in rural areas where market conditions would not otherwise support such a network. The bill — also known as the “Broadband Connections for Rural Opportunities Program Act of 2012” or the “B-CROP Act of 2012” — carries the number S.2275 and would amend the Rural Electrification Act of 1936 to establish the grant program.

Private sector telecom service providers as well as state, local and tribal governments; cooperatives; institutions of higher education; non-profit organizations; and public economic development organizations would be eligible to apply for funding.

The fact that someone is introducing this sort of bill at the same time that the Federal Communications Commission is reforming the traditional voice-focused Universal Service program to focus instead on broadband suggests that there is substantial discontent with the details of those reforms. The reformed USF program, known as the Connect America Fund, is also aimed at helping to fund broadband in areas where no business case exists. But some rural stakeholders have argued that reform plans as currently envisioned do not provide sufficient funding for rural broadband deployments.

The bill also may reflect dissatisfaction with the current plan from service providers who are not incumbent rural carriers. As envisioned, the Connect America Fund would direct the vast majority of funding for rural areas to the incumbents.

According to a post from telecom law firm Bennet & Bennet, Bill S.2275 has been referred to the Senate Committee on Agriculture, Nutrition and Forestry. But in today’s environment with many critics focused on controlling government spending, I would be astonished to see this legislation pass.

Nevertheless readers may be interested in some additional details of the proposed bill, including:

  • Applications would be made to the Secretary of Agriculture and the bill leaves it to the Secretary to determine application details
  • In making awards, the bill specifies that priority be given to projects that provide service to the highest proportion of rural residents that do not have access to broadband service or that will use broadband services to stimulate rural economic development. The bill notes that this could include projects that would connect business incubators in rural communities or that would be integrated with county and regional organization plans.
  • The bill talks about giving the Secretary the discretion to use a certain percentage of budget authority to hire administrative personnel and for a national competition to create and maintain a “comprehensive and interactive rural broadband clearinghouse accessible on the Internet at no cost.” This clearinghouse would have information about “options, opportunities, resources, successful public-private partnerships, comprehensive funding sources and technology tutorials for rural broadband.”
  • The U.S. Comptroller General would be required to evaluate and report on the effectiveness of all federal broadband assistance programs.