The U.S. government will soon release $4 billion of loans and grants aimed at expanding broadband access to underserved areas across the United States, officials said on Wednesday.

The funds are part of a $7.2 billion program to build an affordable high-speed Internet structure in rural areas. The project is being pushed by President Barack Obama, in part, to shore up the U.S. economy with job creation in the telecommunications sector.

This funding is a down payment on the president's commitment to bring the educational and economic benefits of the Internet to all communities, Vice President Joe Biden said in a statement.

The broadband program was tucked into a $787 billion fiscal stimulus package Obama signed into law in February.

Applications for loans and grants will be accepted starting on July 14 and will continue through August 14. Details of the funding process can be found at www.broadbandusa.gov.

State and local governments as well as non- and for-profit organizations are eligible to apply.

The Commerce and Agriculture departments and the Federal Communications Commission are developing a national broadband program to reach those American households and small businesses lacking what many officials consider a necessary service.

Under the rules announced on Wednesday, the USDA and Commerce will review applications, announce a group of finalists on September 15 and start naming winners on November 7, senior administration officials said.

Some industry and public interest groups applauded the release of the guidelines. The National Cable & Telecommunications Association, which represents Comcast Corp, Time Warner Cable Inc and Cox, said it is reviewing the guidelines.

U.S. Telecom, a trade group that represents Verizon Communications Inc and AT&T Inc, did not comment on the guidelines and said it was reviewing them.

NET NEUTRALITY

The Open Internet Coalition, which comprises public interest groups that support so-called net neutrality, said it strongly supports the guidelines. They favor preventing Internet service providers like Verizon and AT&T from giving preference to certain content.

The guidelines said: This requirement ensures neutral traffic routing.

The first major decision regarding broadband policy by the new administration sets a clear course in favor of the open Internet, said Markham Erickson, OIC executive director.

Of the $4 billion to be released soon, $1.6 billion of grants will be administered by Commerce's National Telecommunications and Information Administration and $2.4 billion of grants and loans by the USDA's Rural Utilities Service.

The grants and loans will be released in three tranches, they said.

Under the rules the minimum Internet speed an applicant can provide is 768 kilobits per second (kbps) downstream, considered slow by some standards, and at least 200 kbps upstream to end users.

However, due to likely competition, officials said they expect applicants to offer higher speeds.

(Reporting by John Poirier; Editing by Derek Caney, Steve Orlofsky and Matthew Lewis)

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