NTCA – The Rural Broadband Association and the National Rural Electric Cooperative Association (NRECA) want the USDA to ease some of its rules for awarding funding in the ReConnect rural broadband program. The changes would make the program more effective and give more financial flexibility to awardees given the impact of the COVID-19 crisis, they say.
For ReConnect awards that are 100 percent grants, they recommend that the USDA waive the requirement for providers to spend matching funds in full prior to drawing down any grant funds. “We understand the importance of ensuring that award recipients have ‘skin in the game,’ but the obligation to expend all matching funds prior to the receipt of any grant resources is unnecessarily onerous – especially at a time when providers are compelled to monitor cash flows as customers increasingly struggle to pay bills,” say NTCA and NRECA. They want the program rules to allow an award recipient the choice of matching 25 percent of the amount drawn from the grant funds within each fiscal year.
NTCA and NRECA also urge USDA to modify the rules for 100 percent grant recipients so they don’t need the full amount of matching funds in cash-on-hand prior to award. In a letter, the associations recommend that recipients be required to show only that they have their matching funds for the first two years on hand, with a demonstration that the remainder will be available through either a committed award from another state or federal program or through an approved loan.
The program covers some of the costs of deploying broadband to unserved rural areas where build-out costs are high. The changes would apply to Round 2, which has a total budget of $550 million.