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* * * RUS
LOANS FOR RURAL BROADBAND ACCESS
* * *
The Final rule for the Rural Broadband
Access Loans and Loan Guarantees was published in the Federal Register
on January 30th, 2003. This will provide loans and loan guarantees to
fund the cost of construction, improvement, or acquisition of
facilities and equipment for the provision of broadband service in
eligible rural communities. This final rule prescribes the types
of loans available, facilities financed, and eligible applicants, as
well as minimum credit support requirements to be considered for a
loan.
The Term "Broadband
Services" means providing high-quality voice, data, graphics and
video to your subscribers using any technology transmitting speed of
200 kbs both ways and above.
TO: MRL
CLIENTS
FROM: Lynn R.
Merrill and Gary G. Beikmann
SUBJECT: CHANGES IN RUS TELEPHONE AND
BROADBAND LOAN PROGRAMS
During the ACE
meeting of last week, RUS announced that because the Broadband Loan
Program has a provision for refinancing of existing debt, they are
now able to refinance existing telephone loan program debt under the
telephone program. If you are an existing telephone program
borrower, it is a good time to look at the interest rate you have to
see if your company can benefit by refinancing.
Note that on March
29th, the Federal Register included a description of changes in the
RUS Broadband Loan Program. A summary of the changes is as follows:
The Term " Eligible Rural
Communities"
- The definition
of an eligible rural community now includes any area that is not
contained in a city or town with an excess of 20,000
inhabitants. Therefore an applicant no longer must demonstrate
that it is not located in an area designated as a standard
metropolitan statistical area.
- Annual state
allocations will not be made for fiscal year 2004.
- Applicants
will be eligible for a direct 4% loan if the community being
served is:
- Less than
2500 in population and currently is not receiving broadband
service.
- The per
capita income in the county being served as a percent of the
national per capita income is not more than 65% of the
national per capita income.
- The
population density of the proposed serviced area is not more
than 20 persons per square mile.
If
you have any questions regarding these changes or need assistance in
preparing a loan application, please let us know.
We at Monte R. Lee & Company
can help you determine if your Telephone Company qualifies for the
loans, do a network study for the application of the appropriate
services, recommend a reliable cost effective technology, provide you
with a business case study and file a loan application. On
approval of the loan, we can write specifications for the bidders and
help in deciding the technology and the vendor.
Please contact Gary Beikmann or
Lynn Merrill at 405-842-2405 for assistance in this process.
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