No. 30788 (New Rule): R357-2. Rural Broadband Service Fund

DAR File No.: 30788
Filed: 11/30/2007, 04:47
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to encourage the development of broadband service into rural Utah and to assist companies who will develop the service with the cost of that development.

Summary of the rule or change:

The purpose of this program is to provide rural Utah communities with broadband service. The expansion of broadband service is seen by the legislature as an important part of economic development in rural Utah. This rule will allow the Governor's Office of Economic Development (GOED) to administer and grant monies from the Rural Broadband Service Fund to companies who will develop and maintain broadband service in rural communities. It will establish the system by which applications can be made to the fund, how the applications will be ranked and how monies will be granted. It also establishes the procedures for verification and resolution of any disputes regarding deployment of the broadband service.

State statutory or constitutional authorization for this rule:

Sections 63-38f-2301, 63-38f-2302, 63-38f-2303, 63-38f-2304, 63-38f-2305, and 63-38f-2306

Anticipated cost or savings to:

the state budget:

The cost for FY 2007-2008 is $1,000,000 from the General Fund as allocated in S.B. 268 from the 2007 General Session of the Legislature. (DAR NOTE: S.B. 268 (2007) is found at Chapter 327, Laws of Utah 2007, and was effective 07/01/2007.)

local governments:

GOED is responding to this question in narrative form because this rule is being developed in response to new legislation. The anticipated impact should be minimal as the local communities will be called upon to review the plans, maps, and rates as proposed by the broadband service providers for adherence to local ordinances and proper use of existing or creation of new rights-of-way. It is anticipated that the cost to review the supplied documents will be minimal.

small businesses and persons other than businesses:

GOED is providing the following response in narrative form since to the best of our knowledge there are no small businesses, fewer than 50 employees, or persons other than businesses who will be eligible or able to qualify to deploy broadband service. Small business may be contracted to provide subcontractor services, but the local telecom companies, cable companies, or major telecom providers are likely the only companies capable of providing services and they are the businesses which will be affected by this rule.

Compliance costs for affected persons:

The following response to this question is in narrative form since GOED contacted the companies which are expected to be affected by the rule and requested that their staff review the law and the draft of the proposed rule for time and cost of compliance. After the requested reviews, it was reported to the GOED that the providers anticipated a cost of between $50 - $300 per application.

Comments by the department head on the fiscal impact the rule may have on businesses:

Based on a review of the proposed rule for the Rural Broadband Service Fund and the survey conducted by the staff of GOED with the identified stakeholders, the expected cost to the affected parties should be minimal. Jason P. Perry, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Governor
Economic Development
324 S State
5th Floor
SALT LAKE CITY UT 84111

Direct questions regarding this rule to:

Michael Sullivan at the above address, by phone at 801-538-8811, by FAX at 801-538-8888, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

01/14/2008

This rule may become effective on:

01/22/2008

Authorized by:

Jason Perry, Director

RULE TEXT

R357. Governor, Economic Development.

R357-2. Rural Broadband Service Fund.

R357-2-1. Purpose.

(1) The purpose of these rules is to provide:

(a) the procedures for and content of applications to the Governor's Office of Economic Development for grants from the Rural Broadband Service Fund;

(b) the method for providing public notice of applications and receipt of public comment on applications or competing applications;

(c) the criteria upon which the Governor's Office of Economic Development will determine whether to award a grant from the Rural Broadband Service Fund; and

(d) the procedures for receiving payments from the Rural Broadband Service Fund.

 

R357-2-2. Authority.

(1) Subsection 63-38f-2304 (2)(d)requires the office to make rules governing the following aspects of the Rural Broadband Service Fund:

(a) the method of providing public notice;

(b) the time period for public comment; and

(c) the manner of filing a competing application.

(2) Subsection 63-38f-2306 permits the office to make additional rules governing the Rural Broadband Service Fund as it deems necessary to administer the Rural Broadband Service Fund, with the advice of the board, and in accordance with Title 63 Chapter 46a, Utah Administrative Rulemaking Act.

 

R357-2-3. Definitions.

(1) As used in these rules the following terms are used as defined in section 63-38f-2302:

(a) "Broadband service" means any wire line technology identified by the director as having the capacity to transmit data from and to a subscriber's computer to the Internet or Internet-related services at a minimum rate of data transmission of 256 kilobits per second.

(b) "Fund" means the restricted account known as the Rural Broadband Service Fund created in Section 63-38f-2303.

(c) "Provider" means an entity that will install or have installed under its supervision, and will own facilities and use them to provide retail broadband service to subscribers in a rural area.

(d) "Rural area" means any territory in the state:

(i) within a city, town, or unincorporated area with a population of 10,000 or less based on the most recently published data of the United States Census Bureau; and

(ii) in which broadband service is not available.

(2) As used in these rules:

(a) "Act" means the Rural Broadband Service Fund Act as provided in Section 63-38f-2301, et seq.

(b) "Board" means the Board of Business and Economic Development as provided in Section 63-38f-301.

(i) Any member of the board that represents or has a financial interest in any provider competing for grants under the act shall be disqualified from participation in review of or deliberations regarding applications or other activities of the board under the act or these rules.

(c) "Cost of deployment of broadband service" means all costs associated with the installation of broadband service, including the cost of materials and supplies, the cost of professional services, labor, equipment and permit fees incurred in installation, cost of right-of-way and real property required for the installation, normal overheads, costs of supervision, costs for any interconnection facilities necessary to provide broadband service, and any other deployment costs identified by the provider as one-time network installation costs.

(i) "Cost of deployment of broadband service" does not include any recurring operational costs.

(d) "Director" means the executive director of the Governor's Office of Economic Development as provided in Section 63-38f-202.

(e) "Office" means the Governor's Office of Economic Development as provided in Section 63-38f-201.

(f) "Project" means the installation of broadband service in a rural area by a provider.

(g) "Wire line technology" means a technology under which the broadband signal is carried between the provider and the subscriber over a wire, coaxial cable, or fiber optic cable. The office may not discriminate against any accepted technology for provision of broadband service other than for reasons stated in subsection 63-38f-2304 (8)(a).

 

R357-2-4. Method of Providing Public Notice and Time Period for Public Comment and Notice for Competitive Applications.

(1) Upon acceptance of an application for deployment ofbroadband service in a rural area that complies with R357-2-6 and which is without deficiencies and complete, the office will open a 30-day competing application period following the issuance of public notice. During this time period the office will accept competing applications that comply with R357-2-6 to provide broadband service in exactly the same rural area as proposed in the first application received as specified in R357-2-6 (3).

(2) Public notice of acceptance of an application for deployment of broadband service in a rural area shall be provided within 15 days of acceptance by the office as follows:

(a) notice of the application shall be posted by the office on its official website;

(b) notice shall be provided by the office through email to any person that has previously requested a copy of such notices; and

(c) notice by the office may be facilitated through associations, providers or applicants as directed by the office.

(3) Notice of the application shall be delivered by the provider through registered mail or personal delivery to the chief executive officer or executive body of:

(a) any town or city included in whole or in part within the proposed service area of the project; and

(b) any county in which an unincorporated area is included in whole or in part within the proposed service area of the project.

(4) The notice from the provider shall:

(a) identify the provider and the project generally, including its proposed service area and wire line technology, but need not disclose the proposed installation budget and timeline, business plan, or any other information designated by the provider as competitively sensitive and accepted by the office as sensitive: and

(b) inform interested persons that they have 15 days within which to provide written comments on the application.

 

R357-2-5. Manner of Filing a Competing Application, Public Notice and Public Comment on a Competing Application.

(1) Any competing application submitted to the office shall comply with the requirements of R357-2-6, and the office shall review a competing application for acceptance in the same manner as an initial application; and

(a) if a competing application is rejected by the office, the provider submitting the competing application may have the opportunity to complete, correct and resubmit the application as provided in R357-2-6 (4)(a) provided it is completed, corrected and resubmitted within the 30-day competing application period.

(2) Both the initial application and the competing application will be publicly noticed as provided by R357-2-4; and

(a) written comments on the applications will be received for 15 days following the close of the competing application period; and

(b) no additional competing applications may be submitted after the close of the 30-day competing application period.

 

R357-2-6. Procedures for Applications for Grants From Fund.

(1) A provider that wishes to deploy broadband service in a rural area may file an application for a grant from the fund with the office.

(2) An application shall:

(a) be accompanied by an affidavit executed by an officer, general partner, member, principal, or other authorized representative of the provider under oath verifying that the information in the application is true and correct to the best of the knowledge, information and belief of the individual signing the affidavit and that the individual signing the affidavit has the authority to submit the application on behalf of the provider;

(b) include the following information regarding the provider:

(i) the company name, street and mailing address, telephone number, fax number, and email address and federal tax ID number of the provider;

(ii) the name, title, address, telephone number, fax number, and email address of the individual or individuals with whom contacts regarding the application should be made;

(iii) evidence that the provider is properly organized and authorized to do business in the state;

(iv) information, including financial statements, demonstrating the provider's technical, managerial, and financial qualifications to deploy the broadband service and to continue to provide broadband service to customers subscribing to the broadband service;

(c) provide Incumbent Local Exchange Carrier (ILEC) or Competitive Local Exchange Carrier (CLEC) certification as granted by the Utah Public Service Commission and information regarding prior deployments of broadband service by the provider.

(3) An application shall provide the following information regarding the proposed project:

(a) a description of the proposed project, including:

(i) the location of the proposed project; and

(ii) a map showing the proposed service area;

(b) Information demonstrating that the proposed service area is a rural area, including:

(i) information on the population of the proposed service area or any municipality in which it is located from the most recently published data of the United States Census Bureau; and

(c) a description of the facilities that the provider plans to install, including:

(i) the wire line technology that will be used in providing broadband service;

(d) the number of potential subscribers;

(e) the budget for the project;

(f) the timeline for deployment of broadband service;

(g) the proposed initial set up charge, if any, to subscribers, including any equipment charge;

(i) the terms and conditions upon which broadband service will be established and will continue to be provided to subscribers;

(h) include a form of public notice of the application consistent with R357-2-4(4); and

(i) such other information as the provider wishes to provide.

(4) Within 60 days after an initial application is received by the office, the office shall review the application to determine if it is complete and if it proposes a project that appears to be eligible for a grant from the fund. If the application is complete and proposes a project that appears eligible, the office shall notify the provider that it is accepted for consideration. If the application is deficient, the office shall promptly return it to the provider, identifying the areas of deficiency.

(a) A provider shall have 15 business days to correct, complete and resubmit any application found deficient by the office. Any application resubmitted after 15 business days shall be deemed to be a new application.

(5) Once an initial application is accepted by the office as complete, the office shall within 15 days open a competing application period and provide public notice per R357-2-4(2).

(6) The office shall treat all competitively sensitive information submitted in an application as confidential and protected business records under the Government Records Access and Management Act.

 

R357-2-7. Ranking and Approval of Applications.

(1) The office shall review and rank for approval accepted applications, based upon the following criteria:

(a) the financial, managerial, and technical qualification of the provider;

(b) the number of potential subscribers to be served;

(c) the reasonableness of the cost of deployment;

(d) the timeline of deployment;

(e) the initial set up charge, if any, to subscribers, including any equipment charge; and

(f) the terms and conditions on which broadband service will be provided.

(2) In ranking applications, the office may:

(a) obtain information from the provider or others;

(b) conduct its own analysis of any issue relevant to the application, including economic development impacts of the proposed project;

(c) consider economic benefits to potential subscribers or to the state likely to accrue as a result of completion of the project;

(d) require the submission of a business plan and consider the viability of the provider's business plan to continue providing broadband service to all or some subscribers in the rural area;

(e) require the provider to make one or more presentations to the office, director or the board;

(f) require the provider to agree to make reasonable adjustments to the application or agree to reasonable conditions if necessary to make the application consistent with the act in order for the application to continue to receive consideration;

(g) consult with the Division of Public Utilities created in Section 13-1-2;and

(h) not discriminate against any accepted technology for provision of broadband service other than for reasons of cost or the terms and conditions upon which a provider proposes to provide broadband service to potential subscribers.

(3) If after the process of ranking the applications the office is unable to substantially differentiate between competing applications it may give preference to the application which was filed first.

(4) Based on the ranking of the applications in subsections R357-2-7(1), (2), and (3), the office shall inform the highest ranked provider that its application, including any modification to the application accepted by the provider pursuant to subsection R357-2-7(2)(f) is approved, subject to entry into an agreement with the office and successful performance of the agreement.

(5) Once an application for a given rural area is approved and the office has entered into an agreement with the selected provider for deployment of broadband service to that rural area, other applications for deployment of broadband service to the same rural area will be held in abeyance by the office until successful completion of the project as confirmed by the office at which time the competing applications will be removed from the ranking and shall be deemed denied.

(6) If a project is determined by the office as unable to be completed by the selected provider, the office may consider competing applications if in the judgment of the director the project cannot be completed by the provider originally selected.

(7) The office or director may continue approving applications in the order of ranking from highest to lowest until the office has entered into agreements with providers that provide for total grants equal to the lesser of:

(a) the total amount available for grants from the fund; or

(b) the total amount of grants sought by all approved applications.

(8) No grant will be approved for an amount greater than the lesser of one-half of:

(a) the actual cost of deployment of broadband service in the rural area as established by verified accounts filed with the office by the provider after completion of the project; or

(b) the budgeted amount for deployment of broadband service in the rural area as established by the application as modified prior to approval pursuant to subsection R357-2-3(4).

 

R357-2-8. Procedures Verification of Completion and for Payment of Grants From the Fund.

(1) Upon completion of an approved project in accordance with the terms of the agreement between the provider and the office, the provider shall provide a report to the office. The report shall:

(a) be accompanied by an affidavit executed by an officer, general partner, member, principal, or other authorized representative of the provider under oath verifying that the information in the report is true and correct to the best of the knowledge, information and belief of the individual signing the affidavit and that the individual signing the affidavit has the authority to submit the report on behalf of the provider;

(b) state that the project has been completed in accordance with the agreement; and

(c) provide accounts establishing the actual cost of deployment.

(2) The office shall examine the report of the provider submitted pursuant to subsection R357-2-8(1) and may reasonably investigate any matter related to the report. If the office determines that there is any material deficiency in the provider's performance of its obligations under the agreement, it shall notify the provider of each deficiency and the provider shall have reasonable opportunity to correct the deficiency or to dispute that any deficiency exists.

(3) The director shall disburse the grant as provided in the agreement to the provider following:

(a) the provider's submission of the report;

(b) the office's determination that the project has been completed in accordance with the agreement; and

(c) the office's review and acceptance of the accounts establishing the actual cost of deployment as submitted by the provider pursuant to R357-2-8 (1);or

(d) if the office identifies deficiencies, following the provider's certification that it has corrected the deficiencies and the director has verified that the deficiencies are corrected.

(4) If the provider contests the specification of deficiencies by the office, the board and director shall review the report and the office claim and determine whether material deficiencies exist. If after consultation with the board, the director determines that no material deficiency exists, the director shall disburse the grant. If the director determines that material deficiencies continue to exist, the director shall notify the provider of each material deficiency and the provider shall have reasonable opportunity to correct the material deficiency or to dispute that any material deficiency exists.

 

KEY: broadband, job creation, rural economic development, Rural Broadband Service Fund

Date of Enactment or Last Substantive Amendment: 2008

Authorizing, and Implemented or Interpreted Law: 63-38f-2301; 63-38f-2302; 63-38f-2303; 63-38f-2304; 63-38f-2305; 63-38f-2306