US Agency Announces $1.2 Billion in Broadband Subsidies

The U.S. Department of Agriculture’s Rural Utilities Service (RUS) has announced US$1.2 billion in grants and loans for 126 broadband deployment projects in 38 states and tribal areas.

The new awards, announced Wednesday, include grants for WiMax deployments, for fiber deployments and for DSL deployments. The RUS has now distributed more than $2.6 billion in broadband grants and loans through the American Recovery and Reinvestment Act (ARRA), a huge economic stimulus package passed by the U.S. Congress in early 2009.

The grants and loans will enable telemedicine and distance learning and allow farmers and ranchers to get up-to-the-minute information on weather and commodity prices, said Tom Vilsack, U.S. secretary of agriculture. About 5 percent of all U.S. schools will benefit from broadband projects funded by his agency, he said.

“This investment will allow the United States … to become more competitive in the global economy,” Vilsack said during a press conference.

Windstream, a broadband provider based in Little Rock, Arkansas, was among the companies receiving awards. Windstream received about $66.4 million, mostly grants, for high-speed DSL, fixed wireless and other broadband projects in seven states, including Georgia, Texas and Missouri. Windstream will match the grants with $21.7 million in private funding.

The largest Windstream project is in Florida, where the company will get a $38.3 million grant from RUS, with an additional $12.7 million in private investment, to bring fixed wireless service to areas of the state. The project will bring service to about 120,000 people and 4,750 businesses, the USDA said.

The West Kentucky Rural Telephone Cooperative will receive $123.8 million, half of it a grant and half a loan, to build a fiber network in parts of western Kentucky and Tennessee.

Another recipient is Montana Opticom, which received $64.1 million, with half being a grant and half a loan, to build a fiber-to-the-premises network in rural communities in Gallatin County, Montana. The company estimates that the project will immediately support 650 jobs, the USDA said.

The new grants and loans also support several WiMax projects. Utopian Wireless, based in Bethesda, Maryland, received about $7.9 million for 10 WiMax projects in seven states, including Alabama, Ohio and Illinois.

Crystal Automation Systems received a $26.5 million award, with $7.9 million of it in loans, to build a hybrid fiber and WiMax network in rural Michigan. The project is expected to bring broadband to more than 140,000 people and 5,000 business, the USDA said.

The RUS and the U.S. National Telecommunications and Information Administration received $7.2 billion for broadband projects in the ARRA. The two agencies have until the end of September to distribute the funds.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantusG. Grant’s e-mail address is grant_gross@idg.com.