Rural Telecom Associations Say BIP Rules Are Flawed

Asserting that the current evaluation criteria illegitimately favors larger over smaller broadband carriers, a coalition of industry associations representing small rural telecom providers has written a letter to the administrator of the Dept. of Agriculture’s Rural Utilities Service urging the agency to change proposed evaluation criteria in the Notice of Funds Availability for the federal government’s Broadband Initiatives Program.

Part of the American Recovery and Reinvestment Act, Congress directed that when appropriating BIP funds “priority…shall be given to projects that provide service to the highest proportion of rural residents that do not have broadband service,” the letter states. The August 5, 2009 letter is addressed to Jonathan Adelstein, new administrator of the RUS.

The proposed evaluation criteria the RUS is considering would award points for providing broadband service to an absolute minimum number of unserved rural residents in a given coverage area as opposed to awarding points for providing broadband service to areas that would reach the highest proportion of rural residents in a coverage area of any given size.  More specifically, the proposed criterion would award one point for every 10,000 unserved rural households up to a maximum of 50,000 for five points.

“The clear impact of this language is that any application serving fewer than 10,000 unserved households will not receive any points under this criterion, even if all the households are unserved…As expressed in the NoFA, this criterion would unfairly discriminate against small companies serving sparsely populated areas, in contravention of Congress’s purpose,” according to the letter, which was signed by representatives of General Communication Inc., the National Telecommunications Cooperative Association, the Organization for the Promotion and Advancement of Small Telecommunications Companies, the Rural Cellular Association, the Rural Independent Competitive Alliance and the Rural Telecommunications Group.

The letter states a better approach would award points ” based on the percentage of unserved residents in the area. These points could, for example, start with 1 point for 80%, and award an additional point for every additional 5% unserved households, up to 5 points for 100% unserved households in the area.”