Congressional Research Service

Broadband Loan and Grant Programs in the Usda's Rural Utilities Service Congressional Research Service

Publisher Marketing: Given the large potential impact broadband access may have on the economic development of rural America, concern has been raised over a "digital divide" between rural and urban or suburban areas with respect to broadband deployment. While there are many examples of rural communities with state of the art telecommunications facilities, recent surveys and studies have indicated that, in general, rural areas tend to lag behind urban and suburban areas in broadband deployment. Citing the lagging deployment of broadband in many rural areas, Congress and the Administration acted in 2001 and 2002 to initiate pilot broadband loan and grant programs within the Rural Utilities Service (RUS) at the U. S. Department of Agriculture (USDA). Subsequently, Section 6103 of the Farm Security and Rural Investment Act of 2002 (P. L. 107-171) amended the Rural Electrification Act of 1936 to authorize a loan and loan guarantee program to provide funds for the costs of the construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities. The RUS/USDA houses two assistance programs exclusively dedicated to financing broadband deployment: the Rural Broadband Access Loan and Loan Guarantee Program and the Community Connect Grant Program. The 110th Congress considered reauthorization and modification of the loan and loan guarantee program as part of the 2008 farm bill. The Food, Conservation, and Energy Act of 2008 became law on June 18, 2008 (P. L. 110-246). Title VI (Rural Development) contains authorizing language for the broadband loan program. In the 113th Congress, the 2014 farm bill (P. L. 113-79, the Agricultural Act of 2014) was signed by the President on February 7, 2014. P. L. 113-79 amends Section 601 of the Rural Electrification Act of 1936 (7 U. S. C. 950bb) to reauthorize the Rural Broadband Access Loan and Loan Guarantee Program through FY2018. P. L. 113-79 also includes provisions to redefine project area eligibility with respect to existing broadband service, increase the program's transparency and reporting requirements, define a minimum level of broadband service, require a study on the gathering and use of address-level data, and establish a new Rural Gigabit Network Pilot Program. The Consolidated and Further Continuing Appropriations Act, 2015 (P. L. 113-235) provided $4.5 million to the Rural Broadband Access Loan and Loan Guarantee Program to subsidize a broadband loan level of $24.077 million, and $10.372 million to Community Connect broadband grants.