II 

110TH CONGRESS 

1ST SESSION S. 1439 

To reauthorize the broadband loan and loan guarantee program under title 

VI of the Rural Electrification Act of 1936. 

IN THE SENATE OF THE UNITED STATES 

MAY 21, 2007 

Mr. ROBERTS (for himself and Mr. SALAZAR) introduced the following bill; 

which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry 

A BILL 

To reauthorize the broadband loan and loan guarantee program under title VI of the Rural Electrification Act 

of 1936. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Rural Broadband Improvement Act of 2007’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Rural broadband access reauthorization. 

Sec. 3. Clarification of eligible rural area. 

Sec. 4. Acceleration of loan applications. 

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Sec. 5. Elimination of 2-percent limit. 

Sec. 6. Grant program. 

Sec. 7. Loan security. 

Sec. 8. Expansion of the terms of loans. 

Sec. 9. Clarification of neutrality standard. 

1 SEC. 2. RURAL BROADBAND ACCESS REAUTHORIZATION. 

2 (a) EXTENSION OF LOAN PROGRAM.—Section 601(k) 

3 of the Rural Electrification Act of 1936 (7 U.S.C. 

4 950bb(k)) is amended by striking ‘‘September 30, 2007’’ 

5 and inserting ‘‘September 30, 2012’’. 

6 (b) AUTHORIZATION OF APPROPRIATIONS.—Section 

7 601(j) of the Rural Electrification Act of 1936 (7 U.S.C. 

8 950bb(j)) is amended— 

9 (1) in paragraph (1)— 

10 (A) in subparagraph (A), by striking 

11 ‘‘2002 through 2005’’ and inserting ‘‘2008 

12 through 2010’’; and 

13 (B) in subparagraph (B), by striking 

14 ‘‘2006 and 2007’’ and inserting ‘‘2011 and 

15 2012’’; and 

16 (2) in paragraph (3), by striking ‘‘2007’’ and 

17 inserting ‘‘2012’’. 

18 SEC. 3. CLARIFICATION OF ELIGIBLE RURAL AREA. 

19 (a) IN GENERAL.—Section 601(b)(2) of the Rural 

20 Electrification Act of 1936 (7 U.S.C. 950bb(b)(2)) is 

21 amended to read as follows: 

22 ‘‘(2) ELIGIBLE RURAL AREA.—The term ‘eligi23 ble rural area’ means any area other than— 

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1 ‘‘(A) a city or town that has a population 

2 of greater than 20,000 inhabitants; 

3 ‘‘(B) the urbanized area contiguous and 

4 adjacent to such a city or town; and 

5 ‘‘(C) an area determined by the Secretary 

6 to be predominantly urban in character.’’. 

7 (b) CONFORMING AMENDMENT.—Section 601 of the 

8 Rural Electrification Act of 1936 (7 U.S.C. 950bb) is 

9 amended— 

10 (1) by striking ‘‘eligible rural community’’ each 

11 place that term appears and inserting ‘‘eligible rural 

12 area’’; and 

13 (2) by striking ‘‘eligible rural communities’’ 

14 each place that term appears and inserting ‘‘eligible 

15 rural areas’’. 

16 (c) NON-DUPLICATION REQUIREMENT.—Section 

17 601(c) of the Rural Electrification Act of 1936 (7 U.S.C. 

18 950bb(c)) is amended by adding at the end the following: 

19 ‘‘(3) NON-DUPLICATION REQUIREMENT.— 

20 ‘‘(A) IN GENERAL.—No loan shall be made 

21 under this section unless the Secretary deter22 mines (and set forth his reasons therefor in 

23 writing) that no duplication of terrestrial lines, 

24 facilities, or systems, providing broadband serv25 ices will result therefrom. 

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1 ‘‘(B) EXCEPTION.— 

2 ‘‘(i) IN GENERAL.—The non-duplica3 tion prohibition under subparagraph (A) 

4 may be waived if the Secretary, in his dis5 cretion, determines that such duplication is 

6 necessary and incidental in order to fur7 nish or improve broadband service in an el8 igible rural area. 

9 ‘‘(ii) LIMITATION.—The waiver au10 thority granted to the Secretary under 

11 clause (i) may only be used to provide 

12 loans or loan guarantees for duplication of 

13 service when at least 75 percent of the 

14 total end users served by the proposed 

15 project to be funded by such loan or loan 

16 guarantee are without access to broadband 

17 service. 

18 ‘‘(4) SUBMISSION AND NOTIFICATION OF RE19 QUIRED INFORMATION.— 

20 ‘‘(A) IN GENERAL.—No loan shall be made 

21 under this section unless the entity eligible to 

22 obtain such loan or loan guarantee— 

23 ‘‘(i) submits to the Secretary the fol24 lowing information relating to each incum25 bent broadband service provider that proVerDate Aug 31 2005 04:14 May 22, 2007 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1439.IS S1439
5 

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1 vides broadband service in the area to be 

2 served by the entity: 

3 ‘‘(I) Name and physical address 

4 of such provider. 

5 ‘‘(II) The rate such provider 

6 charges for use of its network or serv7 ices. 

8 ‘‘(III) The service area of such 

9 provider; and 

10 ‘‘(ii) provides notice, in writing, to 

11 each such provider when the entity has 

12 submitted such information to the Sec13 retary. 

14 ‘‘(B) 30-DAY PUBLIC COMMENT PERIOD.— 

15 The Secretary— 

16 ‘‘(i) shall make no loan under this sec17 tion unless the Secretary has provided for 

18 a 30-day period for public comment on the 

19 loan and the proposed scope and use of the 

20 proceeds from such loan; and 

21 ‘‘(ii) may, in response to such com22 ments, make such modifications to the loan 

23 as he deems appropriate.’’. 

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1 SEC. 4. ACCELERATION OF LOAN APPLICATIONS. 

2 (a) 180-DAY PROCESSING PERIOD.—Section 601(c) 

3 of the Rural Electrification Act of 1936 (7 U.S.C. 

4 950bb(c)), as amended by section 4(c), is further amended 

5 by adding at the end the following: 

6 ‘‘(5) 180-DAY PROCESSING PERIOD.—Not later 

7 than 180 days after the receipt of an application for 

8 a loan or loan guarantee under this section, the Sec9 retary shall complete processing of each such appli10 cation.’’. 

11 (b) SIMPLIFICATION OF THE APPLICATION PROCESS

12 AND POST-APPLICATION AUDIT REQUIREMENTS.— 

13 (1) IN GENERAL.—In carrying out title VI of 

14 the Rural Electrification Act of 1936 (7 U.S.C. 

15 950bb et seq.), the Secretary of Agriculture, in con16 sultation with the Administrator of the Rural Utili17 ties Service, shall— 

18 (A) remove any duplicative or unnecessary 

19 application or audit requirements under that 

20 title, including allowing parent companies, and 

21 their wholly owned subsidiaries, to file a single 

22 consolidated application or audit report, if such 

23 application or report includes all relevant finan24 cial information concerning the project which is 

25 the subject of the loan or loan guarantee; 

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1 (B) reduce the cost and paperwork associ2 ated with such requirements; 

3 (C) ensure that the Secretary examines the 

4 total business plan of each applicant for a loan 

5 or loan guarantee under that title, including the 

6 revenue such applicant generated from sources 

7 unrelated to its broadband service, but con8 nected or otherwise related to the facilities fi9 nanced by the loan or loan guarantee; 

10 (D) ensure that the Secretary requires 

11 franchise agreements— 

12 (i) only from those areas in which the 

13 funds from any loan or loan guarantee 

14 under that title are to be used; and 

15 (ii) from such areas only upon the re16 lease of such funds, as a condition for such 

17 release, and not upon the initial filing of 

18 any application under section 601 of the 

19 Rural Electrification Act of 1936 (7 

20 U.S.C. 950bb); 

21 (E) eliminate the required submission of 

22 an area survey under that title; and 

23 (F) require that any recipient of a loan or 

24 loan guarantee under that title uses the funds 

25 from such loan or loan guarantee within 3 years 

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1 after receipt of such funds to build out its 

2 broadband service in the eligible rural area for 

3 which such funds were approved, except if the 

4 Secretary determines that the recipient was un5 able to expend such funds due to circumstances 

6 beyond the control of the recipient. 

7 (2) DEFINITION OF SUBSIDIARY.—In this sub8 section, the term ‘‘subsidiary’’ means a business en9 tity controlled, directly or indirectly, by another 

10 business entity or person. 

11 (c) ADDITIONAL FUNDING FOR STAFF.—Section 601 

12 of the Rural Electrification Act of 1936 (7 U.S.C. 950bb) 

13 is amended by adding at the end the following: 

14 ‘‘(l) ADDITIONAL STAFF.—The Secretary, in his or 

15 her discretion, may hire such additional administrative 

16 personnel, including general field representatives and legal 

17 staff, as is necessary to carry out the administrative duties 

18 under this section.’’. 

19 SEC. 5. ELIMINATION OF 2-PERCENT LIMIT. 

20 Section 601(d) of the Rural Electrification Act of 

21 1936 (7 U.S.C. 950bb(d)) is amended by striking para22 graph (3). 

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1 SEC. 6. GRANT PROGRAM. 

2 Title VI of the Rural Electrification Act of 1936 (7 

3 U.S.C. 950bb et seq.) is amended by adding at the end 

4 the following: 

5 ‘‘SEC. 602. RURAL AREA MAP AND CONNECT GRANT PRO6 GRAM. 

7 ‘‘(a) PURPOSES.—The purposes of any grant under 

8 subsection (b) are— 

9 ‘‘(1) to complement the loan and loan guar10 antee program under section 601 with grants admin11 istered by the Secretary; 

12 ‘‘(2) to promote public-private partnerships for 

13 the mapping of broadband availability and demand 

14 in rural areas; and 

15 ‘‘(3) to enhance the feasibility of providing 

16 broadband service to rural areas. 

17 ‘‘(b) GRANTS AUTHORIZED.— 

18 ‘‘(1) IN GENERAL.—The Secretary shall award 

19 grants to eligible entities for the development and 

20 implementation of statewide initiatives to identify 

21 and track the availability and adoption of broadband 

22 services within eligible rural areas. 

23 ‘‘(2) COMPETITIVE BASIS.—All grants under 

24 paragraph (1) shall be awarded on a competitive 

25 basis. 

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1 ‘‘(c) APPLICATION.—To be eligible to receive a grant 

2 under subsection (b), an eligible entity shall submit an ap3 plication to the Secretary, at such time, in such manner, 

4 and containing such information as the Secretary may re5 quire. 

6 ‘‘(d) CAP ON GRANT AMOUNT.—Any grant awarded 

7 under subsection (b) shall not exceed an amount that is 

8 equal to the amount that is 20 percent of the net projected 

9 cost of any initiative to be funded by such amounts. 

10 ‘‘(e) USE OF FUNDS.—A grant awarded to an eligible 

11 entity under subsection (b) shall be used— 

12 ‘‘(1) to ensure that such entity works collabo13 ratively with broadband service providers to encour14 age broadband deployment and use in areas without 

15 broadband service; 

16 ‘‘(2) to identify and track— 

17 ‘‘(A) rural areas in each State that do not 

18 have broadband service; 

19 ‘‘(B) the rate at which residential and 

20 business end users adopt such service; 

21 ‘‘(C) possible suppliers of such service; and 

22 ‘‘(D) barriers to the adoption of such serv23 ice, including whether or not— 

24 ‘‘(i) the demand for such services is 

25 absent; and 

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1 ‘‘(ii) the supply for such services is 

2 capable of meeting the demand for such 

3 services; 

4 ‘‘(3) to create and facilitate in eligible rural 

5 areas in a State a local rural broadband planning 

6 team— 

7 ‘‘(A) comprised of relevant rural area rep8 resentatives, including, where applicable, rep9 resentatives of business, education, health care, 

10 local government, agriculture, and broadband 

11 service providers; and 

12 ‘‘(B) which shall— 

13 ‘‘(i) baseline broadband use across rel14 evant rural area sectors; 

15 ‘‘(ii) set goals for improved broadband 

16 use within each sector; and 

17 ‘‘(iii) develop a tactical business plan 

18 for achieving its goals; 

19 ‘‘(4) to facilitate information exchange regard20 ing the use, demand, and existence of broadband 

21 service between the public and private sectors; 

22 ‘‘(5) to create within each State a geographic 

23 inventory map of broadband service in order to iden24 tify gaps in broadband service in eligible rural areas 

25 through a method of geographic information system 

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1 mapping of service availability and geographic infor2 mation system analysis at the census block level; 

3 ‘‘(6) to provide a baseline assessment of state4 wide broadband deployment in eligible rural areas 

5 within the State; and 

6 ‘‘(7) to ensure nondisclosure of any proprietary 

7 content or information that may be accessed, discov8 ered, or reported in carrying out any of the activities 

9 described in paragraphs (1) through (6). 

10 ‘‘(f) PARTICIPATION LIMIT.— 

11 ‘‘(1) AVOIDING DUPLICATIVE INITIATIVES.—No 

12 State shall have more than 1 eligible entity receive 

13 a grant under this section to perform the activities 

14 described in subsection (d) within that State. 

15 ‘‘(2) PROHIBITION ON CONTINUING GRANTS.— 

16 For each State, an eligible entity may not receive a 

17 new grant under this section to fund the activities 

18 described in subsection (d) within that State, if such 

19 entity obtained prior grant awards under this section 

20 to fund the same activities in that State in any pre21 vious year. 

22 ‘‘(g) REPORT.—Each recipient of a grant under sub23 section (b) shall submit a report on the use of the funds 

24 provided by the grant to the Secretary. 

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1 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated to carry out the provi3 sions of this section $20,000,000 for each of fiscal years 

4 2008 through 2012. 

5 ‘‘(i) NO REGULATORY AUTHORITY.—Nothing in this 

6 section shall be construed as giving any public or private 

7 entity established or affected by this section any regu8 latory jurisdiction or oversight authority over providers of 

9 broadband services or information technology. 

10 ‘‘(j) DEFINITIONS.—In this section: 

11 ‘‘(1) SECRETARY, BROADBAND SERVICE, AND

12 ELIGIBLE RURAL AREA.—The terms ‘Secretary’, 

13 ‘broadband service’, and ‘eligible rural area’ have the 

14 same meaning as in section 601 of this Act. 

15 ‘‘(2) ELIGIBLE ENTITY.—The term ‘eligible en16 tity’ means a nonprofit organization that is selected 

17 by a State to work in partnership with State agen18 cies and private sector partners in identifying and 

19 tracking the availability and adoption of broadband 

20 services in eligible rural areas of that State. 

21 ‘‘(3) NONPROFIT ORGANIZATION.—The term 

22 ‘nonprofit organization’ means an organization— 

23 ‘‘(A) described in section 501(c)(3) of the 

24 Internal Revenue Code of 1986 and exempt 

25 from tax under section 501(a) of such Code; 

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1 ‘‘(B) no part of the net earnings of which 

2 inures to the benefit of any member, founder, 

3 contributor, or individual; 

4 ‘‘(C) that has an established competency 

5 and proven record of working with public and 

6 private sectors to accomplish widescale deploy7 ment and adoption of broadband services and 

8 information technology; and 

9 ‘‘(D) the board of directors of which is not 

10 composed of a majority of individuals who are 

11 also employed by, or otherwise associated with, 

12 any Federal, State, or local government or any 

13 Federal, State, or local agency.’’. 

14 SEC. 7. LOAN SECURITY. 

15 (a) ADEQUACY OF SECURITY.—In carrying out title 

16 VI of the Rural Electrification Act of 1936 (7 U.S.C. 

17 950bb et seq.), the Secretary of Agriculture, in consulta18 tion with the Administrator of the Rural Utilities Service, 

19 shall ensure that— 

20 (1) the type, amount, and method of security 

21 used to secure any loan or loan guarantee under 

22 that title is commensurate to the risk involved with 

23 each such loan or loan guarantee, particularly when 

24 a loan or loan guarantee is issued to a financially 

25 healthy, strong, and stable entity; and 

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1 (2) any loan guarantee issued under that title 

2 is guaranteed for not less than 80 percent of the 

3 amount of the outstanding principal of the loan to 

4 be guaranteed. 

5 (b) 10 PERCENT EQUITY REQUIREMENT.—Section 

6 601(d) of the Rural Electrification Act of 1936 (7 U.S.C. 

7 950bb(d)), as amended by section 5, is further amended 

8 by adding at the end the following: 

9 ‘‘(3) 10 PERCENT EQUITY REQUIREMENT.— 

10 ‘‘(A) IN GENERAL.—An entity shall not be 

11 eligible for a loan or loan guarantee under this 

12 section unless the entity can demonstrate a 

13 minimum equity position equal to or greater 

14 than 10 percent of the requested loan or loan 

15 guarantee amount. 

16 ‘‘(B) SHORTFALL EXCEPTION.—If at the 

17 time an entity submits its application for a loan 

18 under this section, the entity cannot meet the 

19 requirement under subparagraph (A), the Sec20 retary may modify or waive the requirement, if 

21 the entity can meet a minimum TIER require22 ment of 1.’’. 

23 (c) PROOF OF FINANCIAL FEASABILITY.—Section 

24 601(d) of the Rural Electrification Act of 1936 (7 U.S.C. 

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1 950bb(d)), as amended by subsection (c) and section 5, 

2 is further amended by adding at the end the following: 

3 ‘‘(4) PROOF OF FINANCIAL FEASABILITY.— 

4 ‘‘(A) IN GENERAL.—An entity shall not be 

5 eligible for a loan under this section unless the 

6 entity can demonstrate the ability to generate 

7 sufficient revenues to— 

8 ‘‘(i) cover its expenses and service its 

9 debt; and 

10 ‘‘(ii) meet a minimum TIER require11 ment of 1 by the end of the 5-year forecast 

12 period used by the Secretary to determine 

13 the feasability of each loan. 

14 ‘‘(B) LIMITATION.—The Secretary shall 

15 not promulgate regulations requiring eligible 

16 entities to meet a minimum TIER requirement 

17 greater than 1. 

18 ‘‘(5) DEFINITION OF TIER.—In this subsection, 

19 the term ‘TIER’ or ‘Times Interest Earned Ratio’ 

20 means the ratio of an entity’s net income (after 

21 taxes) adding back in any interest expense, divided 

22 by the entity’s interest expense.’’. 

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1 SEC. 8. EXPANSION OF THE TERMS OF LOANS. 

2 Section 601(g)(2) of the Rural Electrification Act of 

3 1936 (7 U.S.C. 950bb(g)(2)) is amended to read as fol4 lows: 

5 ‘‘(2) have a term to be decided by the borrower, 

6 provided— 

7 ‘‘(A) that such term does not exceed 35 

8 years; and 

9 ‘‘(B) that the loan is adequately secured.’’. 

10 SEC. 9. CLARIFICATION OF NEUTRALITY STANDARD. 

11 Section 601(f) of the Rural Electrification Act of 

12 1936 (7 U.S.C. 950bb(g)(2)) is amended by inserting 

13 after ‘‘neutral’’ the following: ‘‘, including the use of the 

14 following technologies: 

15 ‘‘(1) Digital subscriber lines. 

16 ‘‘(2) Fiber-optic cable. 

17 ‘‘(3) Coaxial cable. 

18 ‘‘(4) Wireless technology. 

19 ‘‘(5) Satellite.’’. 

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