December 23, 2020 — The last five years have boasted massive strides towards closing the urban-rural broadband and utilities divide, according to individuals speaking at Fiber Connect in December.
In the last fiscal year alone, the U.S. Department of Agriculture’s Rural Utilities Service delivered almost $10 billion worth of capital financing in rural America for broadband deployments, rural electricity and electrical efficiency projects, water projects, wastewater projects, and more, said Chad Rupe, Administrator for Rural Utilities Service, during a keynote speech which aired as part of the Fiber Connect 2020 virtual conference.
According to Rupe, in the last 18 months, RUS averaged $900 million each month in investments, loans and grants to utilities in rural America.
RUS has been around since the 1930s, when rural communities, farmers, and ranchers came together to solve the rural electricity industrialization gap that was a major problem of the day. Today the agency provides a broad array of things to rural communities with 20,000 or less inhabitants. The agency has adapted overtime to provide funding for additional utilities, such as, rural broadband and rural drinking water.
Rupe discussed the current state of rural broadband and the strong role RUS plays in making rural utility investments, saying “RUS is equivalent to some of the largest banks in United States,” and is currently financing the most production its water, broadband, and electric programs have collectively seen in a decade.
According to Rupe, the USDA’s RUS offers one of the cheapest, most reliable sources of capital. Further, the interest on loans taken out with the agency are locked at treasury rates, which are currently at historic lows.
President and CEO of the Fiber Broadband Association Gary Bolton, who moderated the conversation, commended the agency on its ReConnect Loan and Grant Program, which is currently driving broadband investment across rural America, providing loans and grants to over 1,100 service providers.
Chad Rupe during the Fiber Connect session
“The ReConnect Program is having a positive impact on rural communities,” said Rupe, “through the program RUS has invested in 83 infrastructure projects in 42 states, to date.“ Due to the success the agency has had, Congress has really supported the initiative. “We received a lot of support from Congress through COVID relief legislation,” said Rupe.
“The ReConnect Program offers three major funding options,” he said, detailing that the agency offers grants large enough to finance entire construction projects, loans that cover the entirety of projects, as well as, 50/50 combinations of grants and loans to finance projects.
“The loan is a very good, low-cast rate of financing to utilize for build outs, especially for Rural Digital Opportunity Fund and Connect America Fund winners,” said Rupe.