Commerce and Agriculture Announce Strong Demand for First Round of Funding to Bring Broadband Jobs to More Americans –Nearly 2,200 Diverse Applications Submitted for Share of $4 Billion in Funding to Expand Broadband Access and Adoption

Full story available here: http://www.ntia.doc.gov/press/2009/BTOP_BIP_090827.html

WiNOG GC Analysis (www.winog.org)

Approximately $2.4 billion from RUS…is available in the first grant round

Infrastructure:

-          More than 260 applications were filed solely with NTIA’s Broadband Technology Opportunities Program (BTOP), requesting over $5.4 billion in grants to fund broadband infrastructure projects in unserved and underserved areas

-          More than 400 applications were filed solely with RUS’s Broadband Initiatives Program (BIP), requesting nearly $5 billion in grants and loans for broadband infrastructure projects in rural areas

-          More than 830 applications were filed with both NTIA’s BTOP and RUS’s BIP, requesting nearly $12.8 billion in infrastructure funding (Applicants for infrastructure projects in rural areas must apply to BIP but were given the opportunity to jointly apply to BTOP in case RUS declines to fund their application)

As Quoted from the RUS/NTIA ARRA Workshops

RUS, when providing a loan, gets to leverage their appropriation $0.072 / dollar (e.g., a $1 million loan only costs RUS $72,000 in appropriations)

Our Round 1 experience showed that a BTOP application represents approximately 60% more work than a BIP application.  Coupling this information with the tight round 1 timeline, we conclude that applicants focused on BIP funding wouldn’t go through the extra work of creating a dual BTOP filing and that applications with dual BIP/BTOP applications went that route due to the rules and were in general written with the with the purpose of failing BIP and moving into the BTOP program.

Based on this observation, we adjust our application “buckets” in the following manner

BTOP

-          Total Submissions: 1090 applications

-          Total Requested Funding: $18.2 billion

BIP

-          Total Submissions: 400 applications

-          Total Requested Funding: $5 billion

Probability of BIP Success

To qualify for RUS funding, unless one services remote unserved areas (an extremely low percentage), RUS requires a minimum 50/50 Loan/Grant combination.  Assuming that RUS award funding is distributed in this manner (normalizing for the 100% unserved grant solicitations and for applicants having a more aggressive loan/grant ratio), one can calculate some numbers and extrapolate that the $2.4 billion in RUS appropriations as follows

-          Average BIP Loan/Grant Combo Amount: 50/50

-          Loan to Appropriation Multiplier: $0.072 / dollar

-          Total BIP Round 1 Appropriations: $2.4 billion

-          Total Round 1 BIP Grant Monies: $2.232 billion

-          Total Round 1 BIP Loan (in Appropriated Funds): $0.168 billion

-          Total Round 1 BIP Loans Monies: $2.333 billion

-          Total Round 1 BIP Funding Available: $4.565 billion

Following these assumptions, we have a total Round 1 BIP Funding availability of $4.565 billion.  Assuming that 100% of dual-purpose applications will be rejected by BIP and adding in a 30% rejection rate of submitted applications (due to incomplete applications, improper documentation, lateness, etc), we have total Round 1 BIP Funding solicitation amount of $3.5 billion.