USDA officially kicked off round two of the ReConnect program, which will provide $550 million in loan and grant combinations to fund rural broadband expansion. The first round two award is granting more than $12.5 million for broadband services in rural Georgia.
The funding was made possible by an additional $100 million in grants included in the CARES Act, which passed in March to combat the COVID-19 pandemic. The funding will go to DoveTel Communications, LLC (which does business as SyncGlobal Telecom).
The company will use the round two ReConnect funds to deploy a FTTP network connecting 7,348 people, 11 farms, 15 businesses, four fire stations and an elementary school to broadband Internet in Heard, Troup and Carroll counties.
The USDA received 11 applications in round two that are eligible for monies allocated in the CARES Act. In all, the department received 172 applications for $1.57 billion in round two.
“The need for rural broadband has never been more apparent than it is now – as our nation manages the coronavirus national emergency. Access to telehealth services, remote learning for school children, and remote business operations all require access to broadband,” U.S. Secretary of Agriculture Sonny Perdue said in a press release about the CARES Act ReConnect award.
Round one of the ReConnect program concluded last month with an award of $523,749 to Breda Telephone Corp. in rural Iowa. Though round one publicly was budgeted at $600 million — equally divided between grants, loans and combinations — the phase ended up providing $744,303,168 to 82 projects in 34 states and territories.
A large percentage of ReConnect funding has gone to rural service providers that are members of NTCA – The Rural Broadband Association and the National Rural Electric Cooperative Association (NRECA). Recently those organizations requested that USDA relax certain requirements for providers awarded grants or grant/loan combinations. The requirements pertain to the matching funds that service providers must allocate when they win grants.
Currently, all matching funds must be spent before grant funding can be accessed. The letter asks that service providers only be required to match 25% of grant funding used during each fiscal year.
For grant/loan combinations, the groups asked that the rules tweaked so that both types of funding can be drawn down in parallel. Currently, loan funding be exhausted before grants can be used.
Separately, the USDA said this week said it will fund $86 million for rural broadband expansion through the Rural Telecommunications Infrastructure loan program. The projects are in Alabama, Arkansas, Iowa, Illinois, Indiana, Tennessee, Texas and Wisconsin.
USDA said it will make more CARES Act ReConnect funding awards in “the coming weeks.”