RTFC’s Reed Talks Broadband Financing at Senate Session

September 29, 2016

RTFC Senior Vice President Robin Reed was one of several industry panelists who discussed rural
broadband financing and implementation issues before the U.S. Senate Broadband Caucus on Sept. 22.

Robin Reed

The caucus, a group of senators who represent states with significant rural populations and often limited connectivity, invited Reed and other experts to share their perspectives on the challenges and opportunities facing broadband expansion. Other panelists included National Telecommunications and Information Administration Associate Administrator Doug Kinkoph, NTCA CEO Shirley Bloomfield and CoBank Vice President of Government Affairs Sarah Tyree.

One major hurdle for small rural telcos in financing broadband is limited upfront capital to deploy infrastructure. Since the amount of funds available through the Universal Service Fund and from inter-carrier compensation continue to decline, this is a growing concern, Reed said. “As income from those two mechanisms has been reduced, they have to rely more on revenue from subscribers, which ultimately pushes rates up.”

Beyond financing, another challenge continues to be how to engage with a community about implementation, Kinkoph noted. “How do we be sure that broadband is accepted by the community? The community needs to understand it’s about more than just broadband. It’s about the economic development that broadband brings to a community.”

Kinkoph also pointed out that demand for broadband support through the Broadband Technology Opportunities Program has greatly exceeded the amount of funding available.

The program, which was funded by the 2009 American Reinvestment and Recovery Act, has completed more than 240 projects and brought broadband to 26,000 schools, libraries and hospitals. However, the program received 2,800 applications seeking a total of $37 billion in funding—nine times the amount of available funds.