Jeff Merkley

02/26/2020 | Press release | Distributed by Public on 02/26/2020 18:33

Merkley, Wyden Press Agency Overseeing ReConnect Rural Broadband Program To Address Serious Application Hurdles

Wednesday, February 26, 2020

WASHINGTON, DC - Oregon's U.S. Senators Jeff Merkley and Ron Wyden today announced two letters pressing the U.S. Department of Agriculture (USDA) for solutions to a number of administrative hurdles and eligibility problems within the ReConnect Program that have put critical broadband infrastructure assistance out of reach for Oregonians and communities across America. Representatives Suzanne Bonamici (D-OR-1), Peter DeFazio (D-OR-4), and Kurt Schrader (D-OR-5) joined Merkley's letter and a bipartisan group of eight senators signed Wyden's.

While the mission of the ReConnect Program is to assist rural areas that currently have no broadband service or have service that is extremely slow, the USDA has established cost-prohibitive application requirements and eligibility factors that actually give larger, less rural communities an advantage.

'We have heard from many Oregonians who have raised concerns that many major issues unfortunately remain,' the members wrote in a letter led by Merkley. 'We wish to relay these concerns to you in this letter and to raise a few questions of our own to inquire about how USDA plans to improve the administrative, technical, and eligibility burdens of the ReConnect Program, which may have resulted in denied applications, and discouraging prospective applicants from applying at all.'

Some of the issues Oregonians have faced with the ReConnect Program include not being able to use the program's mapping software without hiring an outside consultant-severely increasing the costs of applying-and the lack of opportunity to appeal denied applications. The result of these problems is an expensive, high-stakes application process that lacks clear direction.

The members' letter also emphasized fundamental eligibility problems, including the removal of guidelines that would have served tribal nations, and an application review process that favors non-rural communities. These problems undermine the program's purpose-serving the most rural areas of the country so they can access the economic, educational, health, and social benefits of broadband connections.

Earlier today in a separate letter to USDA Secretary Sonny Perdue led by Wyden, the senators wrote about changing a specific requirement within the ReConnect application guidelines that currently prevents some rural providers in 19 states, including Oregon, from applying for grants at all. Right now, service providers cannot apply for USDA ReConnect grants and 50/50 loan-grant combinations for areas that have already received Federal Communications Commission (FCC) Connect America Fund Phase II grants, even if only a satellite provider received funding for that area. The legislation that authorized the ReConnect program does not mandate such an exclusion.

'USDA can, and should, fix this. USDA is neither statutorily required to eliminate FCC grant recipients from ReConnect eligibility, nor does it consider satellite service as sufficient broadband service for the purposes of awarding ReConnect funding.' The senators continued in the letter led by Wyden, '[t]o rectify this inequity and further USDA's stated goal of expanding broadband access for all Americans, we urge you to act to allow service providers to submit applications for ReConnect funds if the area has only received FCC auction funding for satellite service, but would otherwise be eligible.'

The full text of Wyden and Merkley's letter is available here.

These are Senator Merkley's second and third letters to Secretary Perdue voicing significant concerns over the ReConnect program, as the senator works to ensure the broadband funding reaches the communities it was intended to help in Oregon and across the country. Although the USDA made some meaningful changes, including favoring projects more than 100 miles from an urban area, serious flaws remain unaddressed.

As the top Democrat on the spending subcommittee that oversees USDA, Merkley has helped secure more than $1.5 billion in funding to expand rural broadband across America through the ReConnect program, and is now pushing the USDA to be responsive and effective in implementing the program so that broadband infrastructure gets to the communities where it is needed.

The full text of the Oregon delegation's letter is available here and follows below.

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Dear Secretary Perdue,

Encouraging the development of high-quality telecommunications infrastructure is essential to bridging America's digital divide. We are pleased to continue advocating for further congressional appropriations to level the playing field in our increasingly connected nation. In particular, the ReConnect Program, administered by the U.S. Department of Agriculture (USDA), has benefitted from several rounds of funding, including the original $600 million in funding through the Consolidated Appropriations Act of 2018, as well as the most recent tranche of funding amounting to $555 million for fiscal year (FY) 2020.

Prior to the ReConnect Program's launch, we heard several concerns from our constituents in Oregon that the initial design of the ReConnect Program limited accessibility for local internet service providers (ISPs) due to both administrative issues and eligibility restrictions. While changes have been made to improve the program, we continue to hear from many Oregonians that several major issues unfortunately remain. We wish to relay these concerns to you in this letter and to raise a few questions of our own to inquire about how USDA plans to improve the administrative, technical, and eligibility burdens of the ReConnect Program, which may have resulted in denied funding for truly unserved communities, and discouraging prospective applicants from applying at all.

Administrative issues

The administrative hurdles presented by the ReConnect Program, whether it is to understand the rules and restrictions laid out by the Rural Utilities Service (RUS) or to navigate the mapping software, are virtually impossible for local internet service providers (ISPs) to overcome without hiring an outside consultant. This severely increases the costs associated with completing an application, which, in many instances, only serves to gain a greater understanding of whether an ISP is eligible for one of the three funding sources the ReConnect Program offers.

For applications that are ultimately denied by the program's underwriters, there does not appear to be any mechanism to appeal the decision. This is particularly concerning when the project hours and overhead necessary to prepare a ReConnect Program application are so high, that many local ISPs feel as if to submit their application is more akin to a high-stakes gamble rather than soliciting funding for a fiber-to-the-premises project.

Equally concerning is USDA's reliance on the Federal Communications Commission's (FCC) Form 477 data as a way to determine whether or not a community in question is considered to be served or unserved. It is widely known by the telecommunications industry as well as FCC leadership that this data is severely inconsistent with the actual service provided by incumbent telecommunications companies. The issue that a census block is considered to be served even if one household is reported to have internet service is an unnecessarily high bar for local ISPs navigate.

Finally, as USDA continues to consider supplemental information in determining served, unserved, and underserved populations, it is imperative that the eligibility criteria be explained as clearly as possible. In considering the definition of 'underserved' and 'unserved,' when an applicant believes they had done their due diligence in locating an eligible proposed service area, only to be turned down in the first round, greater clarity is needed in determining which parts of Oregon (and the rest of the U.S.) are ineligible for ReConnect funding, rather than waiting to find out in their rejection letter.

Eligibility issues

As required in the Consolidated Appropriations Act of 2018, ReConnect funding is to be provided to the 'most rural areas' that seek assistance. The established eligibility criteria seem to conflict with the ReConnect Program's commitment, specifically that the scoring criteria appear to incentivize proposed service areas that feature businesses, healthcare centers, and educational facilities, which are less likely to be established in regions of the country truly unserved by incumbent ISPs. This paradox of attempting to serve the unserved while offering points for features not associated with rurality is concerning.

Highly competitive applications could ultimately be rejected due to overlapping proposed service areas that already received Federal Communications Commission (FCC) funding for satellite service. Even more problematic is the fact this service funded by the FCC typically offers lower bandwidth caps, incurs higher latency, and is overall less reliable. This restriction, which is not required by statute, precludes areas within Oregon from receiving high-speed service from their local providers, such as fiber-to-the-home, who are willing and able to build out in areas that do not feature any terrestrial infrastructure.

An eligibility factor that benefited applications with the intention to serve tribal lands were removed. In the first round of the ReConnect Program, five points were awarded to applications whose proposed service area would operate in tribal areas. In the second round of applications, this eligibility factor was dropped and instead granted five points to applications operating in opportunity zones. Not only does the revised ReConnect Program take for granted that communities designated as opportunity zones lack sufficient broadband, the removal of points that expressly helped applicants serving tribes to be more competitive appears counterproductive.

USDA did make some meaningful changes in several areas. Issues regarding population density versus rurality were highlighted by also providing rurality points for projects more than 100 miles from an urban area. Unfortunately, the same limitations exist for points associated with educational, healthcare, and essential community facilities. To maximize those points, an application would need to serve more populated areas. If this grant focuses on bringing broadband to rural and unserved America, the evaluation criteria seem to contradict the program's mission mentioned previously.

Encouraging the rollout of robust, high-speed internet throughout the U.S. is of paramount importance as USDA makes its contribution to close the digital divide. For the concerns we outline above, we ask you to provide the following information:

  1. What alternatives to the Form 477 do USDA plan to employ in order to verify future internet speeds?
  2. What plans do USDA have to ensure greater access of ReConnect funding to tribal communities?
  3. What plans do USDA have to improve administrative hurdles explained above?
  4. Does USDA plan to loosen CAF-II restrictions for service areas awarded to providers who either provide high-latency services, or do not verifiably provide internet services of at least 10/1 mbps download/upload?
  5. Does USDA plan to implement an appeal process in the event an applicant believes that their rejection is not warranted, or that minor edits to their application would secure funding for their project?

Comments from our constituents in Oregon have suggested that there is room for improvement for future rounds of funding. Please know that we stand ready to assist in any way we can to ensure greater clarity, equity, and accessibility in the ReConnect Program.

Sincerely,