Over the last week, JSI has heard from a number of clients regarding the likelihood that funds for broadband deployment in rural areas may soon become available as a result of legislation currently moving through Congress.  In response, JSI has begun tracking the proposals and making preparations to assist clients in obtaining access to such funding mechanisms, which may be in the form of grants, loans, and tax credits, if and when any legislation is passed.  Today's e-LERT is intended to provide you with an overview of the current status of the legislation and the possible next steps. 

Current Status of the Legislation

By now, most are aware that the broadband provisions are part of the much larger economic stimulus legislation passed by the House of Representatives last Wednesday.  Similar legislation has been introduced in the Senate and is under consideration.  Clients should take note that the bill recently passed by the House is likely to change significantly before any legislation becomes law, due to the major differences that exist between the House and Senate versions.

One major difference between the two versions is that the House would provide an estimated $6 billion for grants and loans for broadband deployment, while the Senate proposes an estimated $9 billion for grants, loans, and tax credits.  Another significant difference is that the House version provides for half of the funds to be distributed through the Rural Utilities Service (RUS) and the other half through the National Telecommunications and Information Administration (NTIA).  The Senate version, on the other hand, provides that all funding will be distributed through NTIA. 

The Senate must still complete its review and agree on any amendments, before voting on the legislation.  If the Senate passes the bill, the differences between it and the House version must be resolved before President Obama can sign it into law.  Congressional leaders have indicated that their goal is to push for final passage before Congress recesses for Presidents Day, Feb. 16.  

Accordingly, because there are already significant differences in the House and Senate versions, JSI notes, it is apparent that the final version of the broadband legislation will likely be substantially different than that just passed by the House.  

If the Legislation Passes, What's Next?

If the legislation passes, President Obama will sign it into law.  The House version gives the FCC 45 days after enactment to define several terms that are vital in determining the entities that will qualify for funding and the conditions that will be placed on the recipients of the funds.  These terms include the meaning of "unserved" and "underserved" areas, and what is meant by "open access." 

Additional rulemakings also may be required by the federal agencies directed to administer the funds.  For example, in the legislation passed by the House, both RUS and NTIA would likely need to modify their existing mechanisms to be able to distribute grant funds.  Any modifications to the agencies' rules, however, must be accomplished quickly, because the current form of the legislation requires that half the funds be released by Sept. 30, 2009.

As one can see, information regarding the legislation is changing daily.  If and when the legislation passes, it is likely that companies interested in obtaining funding will need to act quickly.  JSI will provide clients with specific information as well as assist with the applicable application procedures once they are established.  In the meantime, if you would like to discuss the pending legislation in more detail, please contact John Kuykendall (jkuykendall@jsitel.com) in JSI's Maryland office, at 301-459-7590.