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RUS has had long experience with these data and is highly confident of their accuracy. Non-RUS data are identified by source and are also considered very reliable. Confidence in this data is high enough to be acceptable for the purposes for which it is being used.
Telecommunications Loans. Loans are made to furnish and improve telephone service, including a variety of related telecommunications purposes, in rural areas. Direct loans are made to rural telecommunications systems and guarantees are provided for loans made by other lenders, such as the Federal Financing Bank. These loans help to ensure that there is an “on ramp” to the Information Superhighway in rural America. The interest rate charged to borrowers depends on the financial condition of an individual borrower system and the costs associated with serving rural subscribers. The interest rate on most loans is a variable rate tied to the Government’s cost of money. Cost of money loans are supplemented by loans from the Rural Telephone Bank (RTB). A portion of a borrowers’ needs are met by RUS loans, and a portion by RTB loans. The ratio of RUS funding to RTB funding is determined by the ratio of RUS and RTB levels authorized by Congress. The most rural systems are eligible for loans at a hardship rate of 5 percent. Borrowers may also apply for RUS guaranteed Federal Financing Bank loans.
Rural Telephone Bank Loans. The Rural Telephone Bank is a public-private partnership that supplements the RUS telecommunications program by providing another source of capital for furnishing and improving rural telecommunications systems. Loans made by the RTB bear interest at a rate equal to its cost of capital, which currently approximates the Treasury’s cost of funds. The RTB is managed by a 13-member board of directors that includes 2 members from the private sector, 5 general officers of USDA, and 6 members elected by RTB shareholders. RTB’s day-to-day operations are conducted by employees of USDA and the telecommunications program, with no additional cost to the taxpayer. The Fiscal Year 2000 Budget proposed that the RTB operate as a Performance-Based Organization (PBO). As a PBO, the RTB would pay its own salaries and expenses as well as provide loan subsidies from internal funds in its liquidating account. The RTB would become a private entity within 10 years.
Distance Learning and Telemedicine Loans. This program provides financial assistance to rural community facilities, such as schools, libraries, hospitals, and medical centers. In addition, funding is available for other entities providing distance learning and telemedicine services in rural areas. In the Telecommunications Act of 1996, Congress and the President recognized the special challenge of rural education and health care and the role telecommunications plays in delivering high quality service. This program helps address the end-user equipment needs of these systems. Loans and grants are made to encourage, improve, and make affordable the use of advanced telecommunications that will provide educational and health care benefits to people living in rural areas. Program results have demonstrated that substantial cost savings and dramatic benefits can be achieved by investments made in educational and medical interactive video, Internet, and other information networks for rural Americans.
Program Activity: Telecommunications Program | FY 1998 | FY 1999 | FY 2000 | FY 2001 |
|---|---|---|---|---|
Program Level | $565m | $461m | $670m | $670m |