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The Rural Utilities Service has formally announced it is accepting propoals for a third round of broadband stimulus funding for satellite-specific projects. The agency has reserved $105 million for disbursement in this round, about $100 million of which will be used to help cover the costs of bringing broadband satellite service to users in remote areas not currently served by fixed networks.

The request for proposals is part of the 'American Recovery and Reinvestment Act of 2009,' and is a milestone of sorts, as the Rural Utilities Service has not in the past funded satellite services.

In principle, the program could provide hardware and installation costs for 200,000 rural users, assuming $500 at each location for the cost of hardware and installation. That might not sound like such a big deal, but consider that the Federal Communications Commission recently estimated that the cost of providing service of about 4 Mbps to the 'most rural' 250,000 U.S. unserved homes would cost $13.4 billion, using the best available fixed access technologies.

It isn't clear what sorts of projects will be proposed, of course. It is perhaps likely that porjects will aim to provide not only equipment and installation subsidies, but also some subsidy of recurring fees. But the disparity in investment costs should suggest, if nothing else, the 'economic'wisdom of using satellite broadband to reach the truly unserved, in the quickest way possible. That is not to say that approach is always the 'politically' wise move.

The filing period for applications to the new funding round is May 7, 2010 to June 7, 2010. The RUS schedule calls for awarding funds no later than September 30, 2010.  Applicants for satellite service funding may file on a national or regional basis, but no more than two awards will be granted for an individual area.

About $3 million is set aside for projects providing engineering and other support to organizations that won awards in either the two prior funding rounds; and $2 million is reserved for library projects.

The $105 million is part of the $2.4 billion in broadband stimulus funding that the RUS is administering. The agency also said that any funds left over after round two awards are made could go toward the third round. All third round funding will be in the form of grants.

Gary Kim (News - Alert) (News - Alert)is a contributing editor for TMCnet. To read more of Gary's articles, please visit his columnist page.

Edited by Kelly McGuire