Both NTIA’s BTOP and RUS’s BIP programs focus primarily on broadband infrastructure deployment, but the programs have some differences based on provisions in the Recovery Act (see table 1). BTOP funds are intended to expand broadband access to unserved and underserved areas. BTOP funds can also be awarded to projects that promote broadband demand and adoption and provide equipment, training, and access for higher education, job creation, public safety and health, and other facilities that serve vulnerable populations. BIP focuses on rural areas and its funds can be used solely for broadband infrastructure deployment. The agencies also have different project eligibility requirements. For example, the Recovery Act requires that BTOP applicants demonstrate that a project would not have been implemented during the grant period without federal grant assistance; the Recovery Act does not include a similar requirement for RUS broadband applicants. To implement the Recovery Act, NTIA and RUS will fund several types of projects. The agencies will fund last-mile and middle-mile network infrastructure projects to extend broadband service in unserved or underserved areas. According to NTIA and RUS, last-mile projects are those infrastructure projects whose predominant purpose is to provide broadband service to end users or end-user devices. Middle-mile projects mostly do not provide broadband service to end users or end-user devices, but instead provide relatively fast, large-capacity connections between backbone facilities—long-distance, high-speed transmission paths for transporting massive quantities of data—and last-mile projects. NTIA is also funding public computer centers and sustainable adoption projects. Both NTIA and RUS have experience with similar broadband grant or loan programs. Before receiving Recovery Act funding, NTIA implemented the Technology Opportunities Program; this program promoted the innovative use of information and communication technologies, primarily in underserved population segments, to promote public benefits. Additionally, NTIA implemented other, nonbroadband programs, such as the Public Safety Interoperability Communications (PSIC) program, which provides funding to public safety organizations; the digital television transition coupon program; and the Public Telecommunications Facilities Program, which provides funding to public broadcasters. RUS has prior and ongoing experience with several broadband-specific programs— including the Rural Broadband Access Loan and Loan Guarantee (Broadband Access Loan) Program which funds the construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities, and the Community Connect broadband grant program, which funds broadband on a “community- oriented connectivity” basis to currently unserved rural areas for the purpose of fostering economic growth and delivering enhanced health care, education, and public safety services. To implement the broadband provisions in the Recovery Act, NTIA and RUS coordinated their efforts and developed program milestones (see fig. 1). OMB tasked agencies implementing Recovery Act programs to engage in aggressive outreach with potential applicants. NTIA and RUS, with FCC coordination, held a series of public meetings in March 2009, explaining the overall goals of the new broadband programs. NTIA and RUS also sought public comments from interested stakeholders on various challenges that the agencies would face in implementing the broadband programs through these meetings and by issuing a Request for Information. NTIA and RUS received over 1,500 comments. FCC, in a consultative role, provided support in developing technical definitions and participated in the first kick-off meeting. On July 1, 2009, Vice President Joe Biden, Secretary of Commerce Gary Locke, and Secretary of Agriculture Tom Vilsack announced the release of the first joint Notice of Funds Availability (NOFA) detailing the requirements, rules, and procedures for applying for BTOP grants and BIP grants, loans, and loan- grant combinations. Subsequently, the agencies held 10 joint informational workshops throughout the country for potential applicants to explain the programs, the application process, and the evaluation and compliance procedures, and to answer stakeholder questions. NTIA and RUS coordinated and developed a single online intake system whereby applicants could apply for either BTOP or BIP funding. NTIA and RUS initially indicated that they would award Recovery Act broadband program funds in three jointly-conducted rounds and initially expected to issue the NOFA for a second funding round before the end of calendar year 2009 and for a third round in 2010. In a draft version of this report, we recommended that the agencies combine the second and third funding rounds. Subsequently, on November 10, 2009, the agencies announced that they would award the remaining program funds in one round, instead of two. Both BTOP and BIP projects must be substantially complete within 2 years and fully complete no later than 3 years following the date of date of issuance of their award. issuance of their award. NTIA and RUS face scheduling, staffing, and data challenges in evaluating applications and awarding funds. The agencies have taken steps to meet these challenges, including the adoption of a two-step evaluation process, utilization of nongovernmental personnel, and publication of information on the applicant’s proposed service area. While these steps address some challenges, the agencies’ remaining schedule may pose risks to the review of applications. In particular, the agencies may lack the needed time to apply lessons learned from the first funding round and may face a compressed schedule to review new applications, thereby increasing the risk of awarding funds to projects that may not be sustainable or do not meet the priorities of the Recovery Act. Scheduling challenges. Under the provisions of the Recovery Act, NTIA and RUS must award all funds by September 30, 2010. Thus, the agencies have 18 months to establish their respective programs, solicit and evaluate applications, and award funds. While in some instances a compressed schedule does not pose a challenge, two factors increase the challenges associated with the 18-month schedule. First, while RUS has existing broadband programs, albeit on a much smaller scale than BIP, NTIA must establish the BTOP program from scratch. Second, the agencies face an unprecedented volume of funds and anticipated number of applications compared to their previous experiences. The volume of funds to be awarded exceeds previous broadband-related programs implemented by NTIA and RUS. While NTIA and RUS have prior experience in administering grant or loan programs, these programs had less budgetary authority than the programs in the Recovery Act (see fig. 2). Of the $7.2 billion appropriated in the Recovery Act, NTIA received $4.7 billion for BTOP. In comparison, NTIA administered the PSIC program, a one-time grant program with an appropriation of about $1 billion for a single year, in close coordination with the Department of Homeland Security (DHS). Additionally, NTIA’s Public Telecommunications Facilities Program received an average of $23 million annually and its Telecommunications Opportunities Program received $24 million annually. RUS received $2.5 billion from the Recovery Act for BIP. In comparison, RUS’s Community Connect program’s average annual appropriation was $12 million and its Broadband Access Loan Program’s average annual appropriation was $15 million. According to preliminary information from the agencies, they received approximately 2,200 applications requesting $28 billion in grants and loans in the first funding round. Based on the number of applications received and the funds requested, the average amount an applicant sought was $12.7 million, or almost half the size of the total average appropriation for NTIA’s l average appropriation for NTIA’s Technology Opportunities Program. Technology Opportunities Program. NTIA and RUS also face an increase in the number of applications that they must review and evaluate in comparison to similar programs (see fig. 3). As mentioned previously, the agencies indicated that for the first round of funding alone, they received 2,200 applications. Of these 2,200 applications, NTIA received 940 applications exclusively for BTOP and RUS received 400 applications exclusively for BIP and 830 dual applications for both programs. Both NTIA and RUS will review the dual applications; if RUS does not fund the project through the BIP program, NTIA can consider funding the project through the BTOP program. By comparison, NTIA received an average of 838 applications annually for the Telecommunications Opportunities Program; for PSIC, NTIA and DHS received 56 applications from state and territorial governments containing a total of 301 proposed projects. RUS received an average of 35 applications annually for the Broadband Access Loan Program and an average of 105 applications annually for the Community Connect program. In addition, since BTOP and BIP will not carry over applications between rounds, applicants who do not receive funding in the first round must reapply to be eligible for consideration for funding in the second round. Therefore, a single proposed project may be evaluated multiple times by BTOP and BIP reviewers. Fourteen of 15 stakeholders with whom we spoke expressed concern that the agencies will face challenges in adequately reviewing the large number of expected applications in the time frame allotted. Staffing challenges. NTIA and RUS will need additional personnel to administer BTOP and BIP. NTIA is establishing a new program with BTOP and will for the first time award grants to commercial entities. NTIA’s initial risk assessment indicated that a lack of experienced and knowledgeable staff was a key risk to properly implementing the program in accordance with the priorities of the Recovery Act. In its fiscal year 2010 budget request to Congress, NTIA estimated that it will need 30 full- time-equivalent staff in fiscal year 2009 and 40 more full-time-equivalent staff for fiscal year 2010. While RUS already has some broadband loan and grant programs in place and staff to administer them, it also faces a shortage of personnel. RUS’s staffing assessments indicated that the agency will need 47 additional full-time-equivalents to administer BIP.