{"data":{"id":"us/7-cfr-1738.2","jurisdiction":"us","citation":"7 CFR 1738.2","heading":"Definitions.","body":"(a) The following definitions apply to this part:\nAcquisition means the purchase of assets by an eligible entity as defined in § 1738.51 to acquire facilities, equipment, operations, licenses, or majority stock interest of one or more organizations. Stock acquisitions must be arm's-length transactions.\nAdministrator means the Administrator of the Rural Utilities Service (RUS).\nAdvance means the transfer of loan or grant funds from the Agency to the Awardee.\nAffiliate or affiliated company of any specified person or entity means any other person or entity directly or indirectly controlling of, controlled by, under direct or indirect common control with, or related to, such specified entity, or which exists for the sole purpose of providing any service to one company or exclusively to companies which otherwise meet the definition of affiliate. For the purpose of this definition, “control” means the possession directly or indirectly, of the power to direct or cause the direction of the management and policies of a company, whether such power is exercised through one or more intermediary companies, or alone, or in conjunction with or pursuant to an agreement with, one or more other companies, and whether such power is established through a majority or minority ownership voting of securities, common directors, officers, or stockholders, voting trust, or holding trusts (other than money exchanged) for property or services.\nAgency means the Rural Utilities Service (RUS).\nApplicant means an entity requesting approval of assistance under this part.\nAssistance means a request for a loan, loan/grant combination, or loan guarantee.\nAssociated loan means any loan that is granted in association with a grant. Every grant will have an associated loan.\nAward means a loan, loan/grant combination, or loan guarantee made under this part.\nAward documents means, as applicable, all associated loan agreements, loan/grant combination agreements, or loan guarantee documents.\nAward term means the term of the loan as defined in the Award documents. The Award term shall be equal to the composite economic life of the facilities being financed with RUS loan or grant funding plus 3 years.\nAwardee means an entity that has applied for and been awarded assistance under this part.\nBorrower means an entity that has applied for and been awarded loan funding under this part.\nBroadband grant means a Community Connect, Broadband Initiatives Program, ReConnect Program, or Rural Broadband Program grant approved by the Agency.\nBroadband lending speed means the minimum bandwidth requirements, as published by the Agency in its latest notice in the Federal Register that Applicants must propose to deliver to every customer in the proposed funded service area in order for the Agency to approve a broadband Award. Broadband lending speeds will vary depending on the technology proposed and the term of the average composite economic life of the facilities. Initially, the broadband lending speed for terrestrial service, whether fixed or wireless, as well as mobile broadband serving ranches and farmland is 25 megabits per second (Mbps) downstream and 3 Mbps upstream, until further amended by notice. If a new broadband lending speed is published in the Federal Register while an application is pending, the pending application will be processed based on the broadband lending speed that was in effect when the application was submitted.\nBroadband loan means any loan approved under Title VI of the Rural Electrification Act of 1936, as amended (RE Act).\nBroadband service means any technology identified by the Administrator as having the capacity to provide transmission facilities that enable the subscriber to receive a minimum level of service equal to at least a downstream transmission capacity of 25 Mbps and an upstream transmission capacity of 3 Mbps. The Agency will publish the minimum transmission capacity with respect to terrestrial service that will qualify as broadband service in a notice in the Federal Register. If a new minimum transmission capacity is published in the Federal Register while an application is pending, broadband service for the purpose of reviewing the application will be defined by the minimum transmission capacity that was required at the time the application was received by the Agency.\nBuild-out means the construction, improvement, or acquisition of facilities and equipment, except for customer premises equipment (CPE).\nCompetitive analysis means a study that identifies service providers and products in the service area that will compete with the Applicant's operations.\nComposite economic life means the weighted (by dollar amount of each class of facility in the requested assistance) average economic life as determined by the Agency of all classes of facilities financed by the award.\nCurrent Ratio (CR) means the current assets divided by the current liabilities.\nCustomer premises equipment (CPE) means any network-related equipment used by a customer to connect to a service provider's network.\nDebt Service Coverage Ratio (DSCR) means the ratio of the sum of the Awardee's total net income or margins, depreciation and amortization expense, and interest expense, minus an allowance for funds used during construction and amortized grant revenue, all divided by the sum of interest on funded debt, other interest, and principal payment on debt and capital leases.\nDensity means the total population to be served by the project divided by the total number of square miles to be served by the project. If multiple service areas are proposed, the density calculation will be made on the combined areas as if they were a single area, and not the average densities.\nDevelopment costs mean the pre-application costs associated with construction, design of the system, and other professional labor, as approved by the Agency. Further guidance on what constitutes approved development costs will be outlined in the Agency's application guide.\nEconomic life means the estimated useful service life of an asset financed by the loan or grant, as determined by the Agency.\nFeasibility study means the pro forma financial analysis performed by the Agency, based on the financial projections prepared by the Applicant, to determine the financial feasibility of a loan or loan/grant combination request.\nFinancial feasibility means the Applicant's ability to generate sufficient revenues to cover its expenses, sufficient cash flow to service its debts and obligations as they become due and meet the Net worth and minimum Times Interest Earned Ratio (TIER), CR, or DSCR requirements of § 1738.206(b)(2)(i) by the end of the forecast period. Financial feasibility of an application is based on a projection that spans the forecast period and the entire operation of the Applicant, not just the proposed project.\nFiscal year refers to the Applicant or awardee's fiscal year, unless otherwise indicated.\nForecast period means the time period used in the feasibility study to determine if an application is financially feasible.\nGAAP means generally accepted accounting principles in the United States of America.\nGrant documents means the grant contract and security agreement between the Agency and the Awardee securing the grant.\nGrantee means an entity that has an outstanding broadband grant made by the Agency, with outstanding obligations under the Award documents.\nIncumbent service provider means a service provider that provides terrestrial broadband service to at least 5 percent of the households in the proposed funded service area at the time of application submission. Resellers are not considered incumbent service providers. If an Applicant proposes an acquisition, the Applicant will be considered a service provider for that area. The Agency will not consider mobile or satellite providers when determining the incumbent service providers in the area.\nIndefeasible right to use (IRU) means the long-term agreement of the rights to capacity, or a portion thereof specified in terms of a certain amount of bandwidth or number of fibers.\nInterim financing means funds used for eligible Award purposes after an Award offer has been extended to the Applicant by the Agency. Such funds may be eligible for reimbursement from Award funds if an Award is made.\nLoan guarantee means Federal assistance in the form of a guarantee of a loan, or a portion thereof, made by another lender.\nLoan funds means funds provided pursuant to a broadband loan made or guaranteed under this part by the Agency.\nMarket survey means the collection of information on the supply, demand, usage, and rates for proposed services to be offered by an Applicant in support of the Applicant's financial projections.\nNet worth means the difference between an entity's total assets and total liabilities.\nProject means all work to be performed to bring broadband service to all premises in the proposed funded service area under the Application that is approved for assistance. This includes the construction, purchase and installation of equipment, and professional services including engineering and accountant/consultant fees. A project may be funded with Federal assistance or other funds.\nProject completion means that all Award funds for construction of the broadband system, excluding those funds for subscriber connections and CPE, have been advanced to the Awardee by RUS.\nProposed funded service area means the geographic service territory within which the Applicant is proposing to offer service at the broadband lending speed.\nRE Act means the Rural Electrification Act of 1936, as amended (7 U.S.C. 901 et seq.).\nReseller means a company that purchases network services from service providers in bulk and resells them to commercial businesses and residential households. Resellers are not considered incumbent service providers.\nRural area(s) means any area which is not located within:\n(i) A city, town, or incorporated area that has a population of greater than 20,000 inhabitants; or\n(ii) An urbanized area contiguous and adjacent to a city or town that has a population of greater than 50,000 inhabitants. For purposes of this definition, an urbanized area means a densely populated territory as defined in the latest decennial census of the U.S. Census Bureau; and\n(iii) Which excludes certain populations pursuant to 7 U.S.C. 1991(a)(13)(H) and (I).\nRUS Borrower or RUS Grantee means any recipient of a loan or grant administered by the RUS Telecommunications Program that has a loan outstanding, or a grant which still has unadvanced funds available.\nSecurity documents means any mortgage, deed of trust, security agreement, financing statement, or other document which grants or perfects to the Agency a security interest in collateral given as security for the assistance under this part.\nService area or Service territory means the geographic area within which a service provider offers broadband service.\nService provider means an entity providing broadband service.\nSystem of accounts means the Agency's system of accounts for maintaining financial records as described in 7 CFR part 1770, subpart B.\nTIER means times interest earned ratio. TIER is the ratio of an Applicant's net income (after taxes) plus interest expense, all divided by interest expense and with all financial terms customarily-required by GAAP or by the Uniform System of Accounts (USOA).\nTotal project cost means all eligible costs associated with the project that are laid out in the application budget schedule, including RUS loan and grant funding and non-RUS funds, as approved by the Agency.\n(b) Accounting terms not otherwise defined in this part shall have the commonly-accepted meaning under GAAP and shall be recorded using the Agency's system of accounts.","path":["Title 7—Agriculture","Subtitle B—Regulations of the Department of Agriculture","CHAPTER XVII—RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE","PART 1738—RURAL BROADBAND LOANS, LOAN/GRANT COMBINATIONS, AND LOAN GUARANTEES","Subpart A—General"],"source_url":"https://www.ecfr.gov/api/versioner/v1/full/2026-08-25/title-7.xml","current_through":"2026-08-25","vintage":"","retrieved_at":"2026-08-27T02:24:01Z","sha256":"2507028c021b9879240bc14749da4f53b115df115da7e278ba01df2a1b46b0ea","source_id":"us-cfr","stale":true,"prev":"us/7-cfr-1738.1","next":"us/7-cfr-1738.3"},"notice":"GroundRules: Original legal text. Not legal advice."}