USDA awards $714M for high speed internet access in rural areas

The U.S. Department of Agriculture (USDA) has awarded $714 million worth of grants and loans to small telecom companies for the provision of high-speed Internet in rural areas in 19 states. This award forms part of the fourth round of funding allocation under the ReConnect program, whose remit is to financially support the build out or improvement of infrastructure required to provide decent broadband in rural communities. The multi-billion-dollar program has been ongoing for around five years and this latest award is the third to take place under round four, the other two much smaller awards having happened earlier this year.

Essentially, the money is going into full fiber deployments. All of the 33 projects receiving funding in this latest allocation centre on the build out of fiber-to-the-premises (FTTP) infrastructure.

As noted by a USDA press release, connecting all communities across the United States to high-speed internet is a central part of President Biden’s ‘Investing in America’ agenda to rebuild the national economy “from the bottom up and middle out” by rebuilding the nation’s infrastructure, which the agency notes “is driving over $470 billion in private sector manufacturing investments and creating good-paying jobs.”

To add some colour, there are three projects receiving grants of just under the $35 million mark: two are in Alaska and involve the Interior Telephone Company and Mukluk Telephone Company, while a third will see the Nemont Telephone Cooperative roll out FTTP to homes, businesses, farms and schools in Montana.

The biggest loan, at just shy of $50 million, will go to the Craw-Kan Telephone Cooperative in Kansas, where a new FTTP network will reach 4,189 people, 149 businesses, 821 farms and three educational facilities in five counties.

The government itself highlighted the Kansas projects, as well as others in South Carolina, Arkansas, Oregon, California and Missouri that will all reach significant numbers of people. In all, the grants and loans will go to telcos serving communities in 19 states.

“High-speed internet is a key to prosperity for people who live and work in rural communities,” said U.S. Department of Agriculture (USDA) Secretary Tom Vilsack. “Thanks to President Biden’s Bipartisan Infrastructure Law, we can ensure that rural communities have access to the internet connectivity needed to continue to expand the economy from the bottom up and middle out and to make sure rural America remains a place of opportunity to live, work, and raise a family.”

The Bipartisan Infrastructure Law, inked in late 2021, provides $550 billion in investment in infrastructure over the 2022-2026 period into transport, waterways, power and broadband; the last has $65 billion allocated to it. Companies awarded grants and/or loans under the ReConnect program are required to apply to participate in the Bipartisan Infrastructure Law’s Affordable Connectivity Program (ACP), which provides discounts on Internet connectivity for low-income households.

Naturally, the announcement of the latest funding round under ReConnect is peppered with rhetoric on the current administration’s efforts to plough money into connectivity and ignores any part played by the previous administration in the project. ‘Twas ever thus in politics. However, the important point here is that those in the White House at present are showing a strong commitment to pushing on with funding broadband network rollout in those areas that are uneconomic to the big telcos, and that has to be a good thing.




One thought on “USDA awards $714M for high speed internet access in rural areas

  1. Xplore Inc., which provides high-speed internet service in rural communities, is planning to raise fresh financing by shuffling assets into new legal entities and borrowing against them, according to people familiar with the situation.

    The Canadian company, formerly known as Xplornet Communications Inc., would receive a loan of around $400 million, said the people, who asked not to be identified discussing a private matter. Proceeds would be used to shore up Xplore’s balance sheet and help fund network expansion, they said. The new financing would be led by private equity backer Stonepeak Partners, according to Bloomberg.

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