NAME: Thomas Dorr

TITLE: Undersecretary for Rural Development

COMPANY: U.S. Department of Agriculture

PROJECT: Overseeing broadband development

The Independent: You have said that because of the way regulation is set up in the broadband development fund, you have to be technology neutral. In speaking with vendors and rural telcos in this market, they say it is easier to get Rural Utilities Service funding for fiber buildouts than copper. Is this official policy now? Are you more willing to fund fiber projects in rural areas rather than, say, a VDSL upgrade?

Dorr: The broadband program has been and still is technology neutral. We have financed fiber, DSL, wireless, broadband over power lines and hybrid fiber/coaxial systems. As long as the proposed project meets our requirements, we consider it. We look at the business case. We constantly evaluate the technology to make sure it meets today's requirements and tomorrow's needs. We look at feasibility and revenue generation. Funding decisions are determined by those factors.

The Independent: When we last talked, you were investigating using “cross-subsidization” to help serve outlying or underserved areas. Has there been any progress on that front?

Dorr: The good news is that with the growth of broadband service, there are fewer pockets of unserved areas. But those that remain can be more difficult to get to for a variety of reasons. Because of this, most applications we receive do not include solely unserved, or mostly underserved areas. To make a business case, providers look at their total revenue and use cross-subsidization — combining competitive areas with more revenue certainty with the higher-cost underserved areas. A good customer base with revenue flow helps subsidize service. We've made progress, but there's more to be done.

The Independent: You also said you were looking at ways to make the 20% down payment for loans less onerous. Have you been able to achieve change here?

Dorr: Rural broadband projects require 20 % equity, or credit support, which is not the same as a down payment. Our proposed rules would reduce this eligibility requirement in some instances to encourage buildouts in unserved areas. The farm bill could affect these proposed rules, so we're watching to see what happens.

The Independent: At the time we last spoke you were not ready to call the broadband development program a success. Has your assessment changed?

Dorr: That depends on how you define success. It's a continuum. We're improving. We still have unserved and underserved areas, and we are working on how to best serve these communities. We've gotten more money out the door than we did last year. We continue to make good loans, and we have many applications in our portfolio.

The Independent: Have there been other changes to the program or the program's budget?

Dorr: We are always making changes in the program. We constantly evaluate technology. We are doing more outreach. For example, we're moving in new directions with our state offices. We're working with community leaders, like rural electric cooperative utilities, who understand investment in rural economies. We review our processes and we're committed to improvements. We work hard to help rural residents get the technology so that their communities grow and prosper.