The Agriculture Department is providing millions of dollars to local communities to increase access to broadband, improve electric infrastructure and expand smart grid technology.

USDA might seem like an unlikely source of technological improvements, especially when they aren't directly tied to agriculture, but Secretary Tom Vilsack sees the grants and loans as a key aspect of the agency's mission.

"Broadband is fundamental to expanding economic opportunity and job creation in rural areas, and it is as vital to rural America's future today as electricity was when USDA began bringing power to rural America 80 years ago," said Vilsack, in a written statement issued July 20. "The investments USDA is making today will deliver broadband to rural communities that are currently without high-speed internet service, or whose infrastructure needs to be upgraded. Improved connectivity means these communities can offer robust business services, expand access to health care and improve the quality of education in their schools, creating a sustainable and dynamic future those who live and work in rural America."

Craig Settles, an independent broadband analyst, said USDA's work has been important in expanding the reach of high-speed connections.

"These programs have been useful providing money that wasn't available from a lot of other sources. From that perspective it's been very good," he said. "People don't understand the significance of it, and look at broadband as just a channel for downloading YouTube videos whatever. But the internet has taken on a role covering everything from economic development to education, and increasingly health care and medical services."

USDA has been investing in rural broadband since pilot programs in 2001 and 2002, through its Rural Utilities Service. In 2002, Congress amended the Rural Electrification Act of 1936 to authorize a loan and loan guarantee program to help small communities and rural areas cover the costs of construction, improvement and acquisition of facilities and equipment. Since then, the program has been reauthorized by subsequent Congresses.

The program is essential to many remote quarters of the country, even though it can take some time for an area to be included, said Teresa Mastrangelo, a broadband analyst at Heavy Reading. "The process is very slow to get this funding. It is a critical element for a number of these communities," she said. "For a number of them this is the only way to get that connection. There's not a provider willing to (extend service), because the towns are very small."

Since 2009, USDA has awarded 74 Community Connect grants totaling more than $77 million to build broadband projects in rural areas that previously did not have broadband service, according to the department. Nearly $20 million of those funds were to provide broadband service in tribal areas and communities of Alaskan Natives. The loan program is also active.

In the July 20 announcement, USDA listed the following grants and loans.

Telecommunications Loans:

  • Minnesota: Garden Valley Telephone, $12.6 million for fiber and electronics upgrades to improve the system for rural subscribers; Consolidated Telephone, $12.27 million to provide greater bandwidth to subscribers, allowing delivery of enhanced services with network upgrades, infrastructure additions and add a new fiber ring.
  • South Carolina: FTC Communications, $12.38 million to upgrade a wireless telecommunications network to 4G/LTE (Long-Term Evolution), meeting growing demand for reliable, higher speed services.
  • Montana: Triangle Telephone Cooperative Association, $29.95 million, to upgrade their system with fiber to supply greater bandwidth to increase speed and the quality of service for their rural Montana subscribers.
  • Wisconsin: LaValle Telephone Cooperative, $7.61 million to deploy fiber and replace a switch to provide rural subscribers with improved services, including voice over Internet Protocol (VoIP) and the flexibility to connect to Gigabit Ethernet and IP interfaces.

Community Connect Grants:

  • Alaska: Arctic Slope Telephone Association Cooperative, $1.4 million to provide Point Hope subscribers with high-speed internet service and prepare the network for an undersea fiber connection.
  • Minnesota: Northeast Service Cooperative, two $3 million grants for two projects to provide broadband service to subscribers on the Fond du Lac Reservation. NESC will partner with the Fond du Lac Band of Superior Chippewa.
  • Oklahoma: @Link Services, $1.5 million to provide high-speed broadband to homes, businesses and critical community facilities in parts of Seminole County.
  • Virginia: Scott County Telephone Cooperative, $2.1 million to build a broadband network with one gigabyte of bandwidth for 540 locations in Dickenson County.

The program's primary weakness, Settles said, is a structure that makes it difficult for community-owned networks to take part.

"The system assumes that the provider is a for-profit organization, a typical telco or rural telco, so the rules were around assuming you're going to have financial sheets, you're going to have endorsements, you're going to have a track record," he said. "When you're talking about community networks, these folks are not the usual organizations. So some of the rules the Agriculture Department has put in place need to be modified to be more inclusive."

USDA also announced, on July 21, $349 million in funding for 15 rural electric infrastructure projects to build or improve more than 1,844 miles of transmission and distribution lines for rural electric cooperatives and utilities in 13 states.

The electric grants continue the rural electrification that has been part of the department's mission for 80 years, Vilsack noted. "Today we are continuing that commitment by investing in the next generation of power transmission – smart grid technology – to make our electric system more reliable, efficient and effective."