Key rule changes in USDA’s ReConnect Round 5
In February, the U.S. Department of Agriculture (USDA) announced the fifth round of ReConnect funding, making $700 million available for broadband grants and loans. The application window is open until May 21, 2024.
Although there is a range of small, nuanced changes between rounds 4 and 5 of ReConnect funding, the two most noteworthy updates are the following:
1. A new points category was added that prioritizes states with the largest number of unserved locations per square mile.
Under the new “most unserved locations per square mile” points category, the USDA ranks the top ten states based on the percentage of unserved broadband serviceable locations (UBSLs) and the average area per UBSL. Projects are eligible for the corresponding points if at least 75% of the Proposed Funded Service Area (PFSA) is in the top-ranked states:
- States 1–5 (10 points): Alaska, Idaho, Montana, New Mexico, and Wyoming
- States 6–10 (5 points): Arkansas, Mississippi, Nevada, South Dakota, and West Virginia
Effectively, this rule directs ReConnect funding to the most rural and most sparsely populated states in the U.S.
2. The definition of “sufficient broadband” was lowered from 100/20 Mbps to 25/3 Mbps.
In a departure from previous funding rounds, Round 5 lowers the definition of “sufficient broadband” speed from 100/20 Mbps to 25/3 Mbps, meaning ReConnect can only fund projects that will deploy infrastructure to premises that currently have access to speeds slower than 25/3 Mbps.
Why this matters
Both of these rule changes will push more ReConnect funding to the most rural states with the most unserved locations — and these decisions appear to be made with the rules of the simultaneous BEAD Program in mind.
It is well-documented that the most rural states in the U.S. — based on population density (like the states listed above) — will have the hardest time meeting the “Internet for All” mandate with their BEAD funding. Furthermore, given that BEAD requires states to serve the unserved first (i.e., no access to speeds of 25/3 Mbps or faster), states will be forced to spend a disproportionate amount of money on the locations that are in aggregate the most inefficient to build. Lastly, the BEAD rules also mean that in the states listed above, a much higher percentage of BEAD funding will be used to deploy wireless infrastructure rather than wired (fiber), again to serve all of the unserved locations in the state.
Therefore, ReConnect money will, in a small but meaningful way, alleviate those challenges in some areas. Because ReConnect does not award points for efficient use of funds, it is the best program to pursue to build fiber in remote locations. In that way, ReConnect Round 5 is structured to help the states that did not receive sufficient BEAD funding maximize their limited dollars.
For more information about the rules for ReConnect Round 5, please visit the Federal Register or the USDA’s website.
