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Dollars or Problems Could Be Ahead With ReConnect Round 3

Steve Pastorkovich and Randy Sukow / Oct 25, 2021

The U.S. Department of Agriculture’s Rural eConnectivity Program (ReConnect), providing loans, grants and combination loan/grants to rural broadband construction projects, is coming back for a third round.
USDA will begin accepting applications in the new round on Nov. 24, with a closing date of Feb. 22, 2022. There will be a total of $1.15 billion in available support, according to a press release. This is an increase from $550 million for Round 2, and $600 million for Round 1.

Like the earlier rounds of ReConnect, applicants can design their own Proposed Funded Service Areas (PFSAs). However, a big difference in Round 3 is that to be eligible, 90 percent of the locations in a PFSA must lack access to fixed terrestrial [wireline or wireless] service of 100 Mbps down and 20 Mbps up. This will open far more areas compared to earlier rounds, which were only eligible if service of 10/1 Mbps was unavailable. In addition, applicants must commit to providing 100 Mbps symmetrical service to all locations in a PFSA, rather than the previous requirement of 25/3 Mbps.

In another important change from earlier rounds, USDA may consider ReConnect funding for areas already receiving support through the Rural Utilities Service or the FCC. USDA will consider entities that are “receiving or under consideration” for Rural Digital Opportunity Fund (RDOF) awards “because RDOF funds both operational expenses and capital expenses, while ReConnect funds only capital expenses,” according to the notice.

The first two rounds of the ReConnect program, which first began distributing funding in 2019, were useful in many cases, but a challenge for some rural providers. The program helped to build out unserved areas, but the filing requirements were complex and time consuming.

The current program could now enable overbuilds of older, existing broadband facilities. Providers should consider not only whether the program might be appropriate for them, but also remain vigilant regarding potential attempts by other applicants to overbuild their service areas. NRTC Funding Services can assist members in evaluating how ReConnect potentially affects their communities.

A notice in today’s Federal Register provides full details. The agency says it “encourages” projects that will help financially disadvantaged communities recover from COVID-19 effects; that will enhance rural economic development (with an emphasis on job creation), and that will tend to reduce pollution in the service area.

We welcome members who would like to take a closer look at the new rules for ReConnect 3 to contect NRTC Funding Services at funding@nrtc.coop.

 


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