The Rural Utilities Service today announced a total of $478.5 million in broadband loans to 26 service providers in 17 states. (Editor’s Note: The RUS has issued a new release changing the total of new loans announced this week to $410.7 million. The reason for the change is that four of the awards included in the original $478.5 million announcement total had been previously announced, an RUS spokeswoman said.)
“Today’s funding will provide residents of these rural communities with high-speed Internet connections to improve healthcare and educational opportunities and connect to global markets,” said RUS Administrator Tom Vilsack in a press release announcing the awards. “In addition to providing much needed services to rural businesses and residents, these investments will increase jobs, not just in the near term but through expanded opportunities in rural areas.”
The live announcement of the awards was made by RUS Deputy Administrator Jessica Zufolo during an address at the annual meeting of the National Association of Regulatory Utility Commissioners in St. Louis today.
The largest loan announced today was $32.9 million to Polar Communications Mutual Aid Corporation, which will be used to expand the company’s fiber-to-the-premises network in 18 North Dakota exchanges. The smallest loan in today’s announcement was $3.7 million to McNabb Telephone Company of Illinois for network improvements, including construction of new FTTP facilities.
With only three exceptions, all of the loans announced today referenced the deployment of FTTP or fiber-to-the-home.
Ironically today’s announcement came just days after the House of Representative’s Commerce Committee requested a bi-partisan briefing with the RUS to discuss the status of previous loans made by the agency, including a $267 million loan to Open Range Communications, which has filed for bankruptcy.
These have been challenging times for the RUS, which also has received criticism from the cable industry for making loans to areas where some residents already have broadband. Meanwhile the RUS also is responsible for overseeing $2.5 billion in grants and $1 billion in loans that it made through the broadband stimulus program.
A breakdown of today’s broadband loans by state is below:
Colorado
- Eastern Slope Rural Telephone Association, Inc.–$18,725,000 will be used to upgrade the existing fiber-to-the-node (FTTN) network, capable of providing modern broadband services to subscribers in 10 exchanges.
Idaho and Utah
- Albion Telephone Company–$17,075,000 in loan funds will be used to install 453 miles of buried fiber optic cables throughout the proposed FTTP system, providing nearly 60 percent of subscribers with FTTP.
Illinois
- McNabb Telephone Company–$3,700,000 in loan funds will be used to make system improvements, including constructing new FTTP facilities. A total of 115 miles of buried fiber optic cable will be deployed to improve service to subscribers.
- Shawnee Telephone Company–$30,286,000 in loan funds will be used to construct FTTP facilities, allowing Shawnee to provide voice and data services at speeds of up to 100 Mbps to both residences and businesses.
- McDonough Telephone Cooperative, Inc.–$15,728,000 in funds will be used to upgrade the rural areas with FTTH technology. Approximately 766 miles of buried fiber cable will be deployed to provide over half of the subscribers with access to improved broadband service. McDonough has been serving its rural subscribers for over 60 years.
Indiana
- Perry-Spencer Rural Telephone Cooperative, Inc.–$29,139,000 in loan funds have been awarded to Perry-Spencer Rural Telephone Cooperative Inc., (PSC) which provides telecommunications services to nearly 6,000 subscribers over approximately 1,150 square miles in southern Indiana. This loan will enable PSC to start the process of designing and building FTTP to enhance broadband services across the service area.
Iowa
- Mediapolis Telephone Company–$13,401,000 in loan funds will be used to make system upgrades to the transport system and the network architecture from the existing copper Digital Subscriber Lines (DSL) to FTTP broadband systems.
- Griswold Cooperative Telephone Company–$12,747,000 in loan funds will be used to complete a system-wide FTTP network, enhancing broadband service to all subscribers.
- La Porte City Telephone Company–$9,867,000 in loan funds will be used to make system improvements, including installation of a FTTP broadband network that will serve all of the borrower’s subscribers. A total of 297 miles of buried fiber optic cable will be deployed, enabling downstream data rates of up to 20 Mbps.
Kansas
- The S & T Telephone Cooperative Association–$29,814,000 will be used to implement a full FTTH design to allow the migration to 10-20 Mbps broadband speeds to all subscribers and to provide IPTV in the near future.
Minnesota
- Paul Bunyan Rural Telephone Cooperative–$19,749,000 in Rural Development Broadband Loan Program funds will be used to extend Paul Bunyan’s existing FTTH network to serve the exchanges of Park Rapids Rural and Trout Lake in North Central Minnesota. With this extension of their network, Paul Bunyan will be able to provide advanced telecommunications services to over 45,710 establishments (households and businesses) across all service areas. Paul Bunyan has been operating since 1952 and has been a telecommunications borrower with the Rural Utilities Service since 1953.
New Mexico
- Roosevelt County Telephone Cooperative, Inc.–$12,358,000 will be used to deploy new equipment and install FTTP equipment to enhance the broadband network.
North Dakota
- BEK Communications Cooperative–$26,746,000 in loan funds will be used to expand a FTTH broadband system. Upon completion of this RUS-funded project, 100 percent of BEK’s subscribers will be served by fiber.
- SRT Communications, Inc.–$24,832,000 in loan funds will be used to install 2,143 miles of buried fiber optic cable and related equipment throughout the proposed FTTP system. The FTTP system will be constructed in areas outside of towns in twelve of the borrower’s twenty-six exchanges. The service areas in the towns will continue to be offered DSL at speeds of at least 55 Mbps with its relatively new copper plant.
- Polar Communications Mutual Aid Corporation–$32,939,000 in loan funds will be used to expand the Borrower’s FTTP broadband system throughout the borrower’s eighteen exchanges. The upgraded system will help meet current and future requirements for delivery of voice, video and high speed data to subscribers. Upon completion of this RUS-funded project, 100 percent of Polar’s subscribers will be served with broadband via various technologies.
Oklahoma
- Terral Telephone Company–$4,855,000 in loan funds will be used to convert the existing copper network to a FTTH system, and connect new subscribers. The proposed FTTH deployment includes construction of over 62 miles of fiber plant in and around Terral, and the replacement of the existing softswitch and power plant. This FTTH deployment will create nine jobs and save seven jobs.
South Carolina
- Sandhill Telephone Cooperative, Inc.–$5,930,000 will be used to provide for system improvements, including purchase of a new switch.
Tennessee
- North Central Telephone Cooperative Corporation–$27,069,000 will be used to upgrade portions of North Central’s outside plant and network infrastructure by deploying a FTTP network.
Washington
- Inland Telephone Company–$24,823,000 in loan funds will be used to expand Inland’s FTTP broadband system and connect new subscribers.
- The Toledo Telephone Co., Inc.–$18,091,000 in loan funds will be used to install 292 miles of buried fiber optic cables and related equipment throughout the proposed FTTP system, offering enhanced service to all Toledo subscribers.
Wisconsin
- Union Telephone Company–$13,308,000 in loan funds will enable Union to deploy approximately 336 miles of fiber, which will provide approximately 60 percent of Union’s subscribers with access to improved broadband services.
- Marquette-Adams Telephone Cooperative, Inc.–$19,781,000 Marquette-Adams will use loan funds to complete a system-wide FTTP network, including over 370 miles of new or modified buried fiber, providing enhanced broadband service to all subscribers.
I know these loans were in process well before USF-ICC reform, but you have to wonder if these rural telcos will be able to pay back for all of this FTTH investment once the recovery rules change. Pretty risky in my book.
I think the RUS is being short-sighted in overlooking the opportunity to fund more wireless broadband in rural areas. If the first objective is Internet access, this can be accomplished quicker and more cost-effectively, than FTTH, and with very adequate download speeds.
Followup to Adam: Some of these rural companies may now decide to turn down the loans, in light of the USF-ICC reform, since there revenues are in dire jeopardy now.
$267 million went to now bankrupt Open Range.
Is the goal of this program to get broadband to the most people or to fund FTTH? Per @JohnC, seems like close to half a billion could enable many, many more people using a wireless approach. Perhaps RUS should give some incentives to these loans (better terms maybe) for technology that gets adequate broadband to more people, than gets fewer people the best broadband.
@Quincy & @JohnC- yeah, RUS loans for funding broadband wireless – that's working out real well – http://www.fiercewireless.com/story/government-la…
Why would RUS want to fund wireless? The wireless carriers don't need funding to throw up an antennae and offer low-end bandwidth for above market pricing. Some outrageous (or spectacular depending where you sit) rate of return investments on the small footprint rural wireless plans where nothing else exists. The better RUS FTTH funding question might be "will RUS fund aerial FTTH?" They quit funding aerial in the '90's and that may be a better economic approach to getting FTTH done for less money.
With all these expansions, I just hope that the market is not too saturated with all that rivalry in the market that will not affect the companies in going into bankruptcy. Expansion is really good in terms of serving the community to experience the flow of technology.