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Comment Sought on Addressing Challenges to Broadband Deployment Financing

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Released: December 18, 2009

PUBLIC NOTICE

News Media Information 202 / 418-0500

Federal Communications Commission

TTY 202 / 418-2555
445 12th St., S.W.
Internet: http://www.fcc.gov

Washington, D.C. 20554

DA 09-2610

Released: December 18, 2009

COMMENT SOUGHT ON ADDRESSING CHALLENGES TO BROADBAND DEPLOYMENT

FINANCING

NBP Public Notice # 28

PLEADING CYCLE ESTABLISHED

GN Docket Nos. 09-47, 09-51, 09-137

Comment Date: January 8, 2010

In the American Recovery and Reinvestment Act of 2009 (“Recovery Act”), Congress directed
the Commission to create a national broadband plan by February 17, 2010, that seeks to “ensure that all
people of the United States have access to broadband capability and … establish[es] benchmarks for
meeting that goal.”1 Among other things, the Commission is to provide “an analysis of the most effective
and efficient mechanism for ensuring broadband access by all people of the United States”2 and “a
detailed strategy for achieving affordability of such service and maximum utilization of broadband
infrastructure and service by the public.”3
One identified obstacle to broadband access in rural communities is the lack of available private
financing for network deployment, whether through capital investment, debt financing, or other financial
support.4 While several federal programs support broadband deployment in unserved and underserved
areas, challenges in obtaining private debt or equity support that prevent effective deployment remain.
Even with government support, many enterprises may be unable to achieve a profitable operating model,
and the business case for potential deployment projects in many rural areas may be inadequate to merit
sufficient private sector support.5


1 American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat. 115 § 6001(k)(2) (2009).
2 Id. at § 6001(k)(2)(A).
3 Id. at § 6001(k)(2)(B).
4 Letter from Thomas Cohen, Kelley Drye & Warren LLP, counsel for Hiawatha Broadband Communications, Inc.,
to Marlene H. Dortch, Secretary, FCC (Nov. 25, 2009) (“Hiawatha Nov. 25 Ex Parte”) at 1 and attach. 1 “Hiawatha
Broadband Communications Inc. White Paper” at 1. See also Letter from Thomas Cohen, Kelley Drye & Warren
LLP, counsel for Hiawatha Broadband Communications, Inc., to Marlene H. Dortch, Secretary, FCC (Nov. 5, 2009)
(“Hiawatha Nov. 5 Ex Parte), at 1, attach. “Barriers to Broadband Rural Deployment – Challenges and Solutions,”
at 1-3.
5 See Hiawatha Nov. 5 Ex Parte, attach. “Barriers to Broadband Rural Development – Challenges and Solutions,” at
1-3. See also Bronner (Novak Biddle) Statement at Capital Formation Field Hearing (10/1/09) (suggesting that

In an effort to address these challenges, the Commission seeks comment on the potential private
sector and government funding vehicles for effective financing of broadband deployment projects in rural
and high cost areas. While many of these vehicles may be outside the Commission’s scope and
jurisdiction, the Commission is considering a range of potential vehicles in order to address the
Congressional call for “an analysis of the most effective and efficient mechanism for ensuring broadband
access” to all Americans.
Recognizing the issues are complex and differ in various contexts, the Commission seeks to focus
on how government policies and programs create more effective incentives for private financing of
deployment of broadband infrastructure in the country’s underserved and unserved areas.
1. What existing federal government institutions, program mechanisms, and sources of funding
could be employed to create greater incentives for privately financed rural broadband
deployment?6
a. What current federal programs administered by existing institutions, including Rural
Utilities Service and National Telecommunications and Information Administration,
provide instructive precedents for innovative financing support vehicles, such as loan
guarantees?7
b. What types of federal government financing (one-time grants, ongoing grants, loans,
loan guarantees, etc.) are best suited in what contexts and what would be the
respective levels of private financial leverage we can expect each type to provide?
2. What new financing methods should be employed to increase effectiveness and encourage
entrepreneurship in the private sector for supporting rural broadband deployment?
a. How would the new financing vehicle be structured and administered? What would
its cost be, both financially and administratively, and how would the government
ensure the sustainability of the overall program to continue future support?
b. How can existing financing vehicles (e.g., grants, loans, etc.) be leveraged and/or
rechanneled to create appropriate incentives for private sector financing of
deployment in rural areas? What would be the qualitative and quantitative impact on
private behavior for different types of support (e.g., one-time grants, ongoing grants,
loans, revolving loans, etc.)?





venture capital firms examine the return on investment in each point of the value chain and that the cost of capital is
often too high).
6 Commenters do not need to re-submit any information previously provided in response to NBP Public Notice #19
regarding universal service and intercarrier compensation. See Comment Sought on the Role of the Universal
Service Fund and Intercarrier Compensation in the National Broadband Plan
, GN Docket Nos. 09-47, 09-51, 09-
137, Public Notice, DA 09-2419 (WCB, rel. Nov. 13, 2009).
7 See, e.g., Remarks of Dr. Gary Bojes, USDA/RUS, at Capitalization Strategies for Small and Disadvantaged
Businesses Workshop (11/12/2009) at 15-17
(http://www.broadband.gov/docs/ws_capitalization_strategies/ws_capitalization_strategies_transcript.pdf) (last
visited December 18, 2009) (explaining that USDA/RUS provides many low interest loans that help improve
telecommunications infrastructure).
2

c. Are there new financing vehicles (e.g., loan guarantees) that have not been employed
in the broadband context that should be considered?
This matter shall be treated as a “permit-but-disclose” proceeding in accordance with the
Commission’s ex parte rules. See 47 C.F.R. §§ 1.1200, 1.1206. Persons making oral ex parte
presentations are reminded that memoranda summarizing the presentations must contain summaries of the
substance of the presentations and not merely a listing of the subjects discussed. More than a one- or two-
sentence description of the views and arguments presented generally is required. See 47 C.F.R.
§ 1.1206(b). Other rules pertaining to oral and written ex parte presentations in permit-but-disclose
proceedings are set forth in section 1.1206(b) of the Commission’s rules, 47 C.F.R. § 1.1206(b).
·

All comments should refer to GN Docket Nos. 09-47, 09-51, and 09-137.

·

Please title comments and reply comments responsive to this Notice as “Comments —NBP Public
Notice # 28.”

·

Filers using the Commission’s Electronic Comment Filing System (ECFS) should enter the
following text in the “Custom Description” field in the “Document(s)” section of the ECFS filing
page: “Comments – NBP Public Notice #28”.

·

We strongly encourage parties to develop responses to this Notice that adhere to the organization
and structure of the questions in this Notice

.
Comments may be filed using (1) the Commission’s Electronic Comment Filing System (ECFS),
(2) the Federal Government’s eRulemaking Portal, or (3) by filing paper copies.8 Comments can be filed
through the Commission’s ECFS filing interface located at the following Internet address:
http://www.fcc.gov/cgb/ecfs/. Comments can also be filed via the Federal eRulemaking Portal:
http://www.regulations.gov.9 In completing the transmittal screen, commenters should include their full
name, U.S. Postal Service mailing address, and the applicable docket or rulemaking number. Parties who
choose to file by paper must file an original and four copies of each filing. If more than one docket or
rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for
each additional docket or rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-
class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s Secretary,
Office of the Secretary, Federal Communications Commission.
§
Effective December 28, 2009, all hand-delivered or messenger-delivered paper filings for the
Commission’s Secretary must be delivered to FCC Headquarters at 445 12th St., SW, Room TW-
A325, Washington, DC 20554. All hand deliveries must be held together with rubber bands or
fasteners. Any envelopes must be disposed of before entering the building.

PLEASE NOTE

:
Through December 24, 2009, the Commission’s contractor will receive hand-delivered or messenger-
delivered paper filings for the Commission’s Secretary at 236 Massachusetts Avenue, NE, Suite 110,
Washington, DC 20002. This filing location will be permanently closed after December 24, 2009.
The filing hours at both locations are 8:00 a.m. to 7:00 p.m.


8 See Electronic Filing of Documents in Rulemaking Proceedings, 63 Fed. Reg. 24121 (1998).
9 Filers should follow the instructions provided on the Federal eRulemaking Portal website for submitting
comments.
3

§
Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be
sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
§
U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street, SW,
Washington DC 20554.
People with Disabilities: To request materials in accessible formats for people with disabilities
(Braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call the
Consumer and Governmental Affairs Bureau at (202) 418-0530, (202) 418-0432 (TTY).
For further information about this Public Notice, please contact Randy Clarke at (202) 418-1500.
4

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