• Jennifer Heywood

2018 Farm Bill—Implications on Rural Broadband Internet

The 2018 Agriculture and Nutrition Act (commonly referred to as the “Farm Bill”), a $489 billion piece of legislation which aims to fund a wide variety of rural and agricultural programs, is currently stalled in the House. The Bill, which would amend and replace the 2014 Farm Bill, is not yet active law. If the Bill reaches the president’s desk and is signed into law, however, it could have some major implications for rural broadband internet customers and providers. The proposed 2018 Farm Bill would affect rural internet customers and providers in two main ways: First, by increasing broadband download and upload speed standards for rural broadband providers; and second, by changing the grant/loan restrictions on rural internet providers who wish to provide broadband to rural areas.

First, the Bill would create new minimum acceptable broadband service standards, as well as projections of minimum acceptable service standards for 5, 10, 15, 20, and 30 years into the future. The Bill would prohibit the Department of Agriculture from making loans to finance broadband projects that cannot meet the projected minimum standards of service, but leaves some wiggle room by allowing them to lower standards if they are cost-prohibitive to meet. Furthermore, Sec. 6113 would increase appropriation limits for rural broadband projects in underserved areas to $150 million per year for the years 2019-2023. Additionally, Section 6105 of the Bill creates procedures to provide grants, loans, or both to eligible entities who demonstrate innovative broadband technologies or methods in rural areas. These all seem to be positive changes for rural internet customers and providers and incentivize developers to build broadband infrastructure in underserved rural areas and increase speeds.

On the other hand, the Farm Bill would amend Title I of the Rural Electrification Act of 1936 to include a new section allowing recipients of certain grants, loans, or loan guarantees to set aside a maximum of 10% of the amount for retail broadband service. This provision could potentially hamstring rural broadband development by limiting the funds available for these types of projects. Also, Section 604 would disallow government financing for any project that “receives any other broadband grant administered by the Rural Utilities Service,” which could effectively disqualify many entities looking to expand broadband infrastructure into rural areas from government grants. This could have a negative effect on rural broadband development, as government grants or loans are often needed to make these projects cost effective.

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