CALL FOR NOMINATIONS FOR RURAL TELEPHONE BANK BOARD

On August 13, a letter and nomination form was mailed to eligible stockholders calling for nominations for Rural Telephone Bank (Bank) board of directors. Nominations are now being accepted and should be received by October 6th. Six director positions, three from the cooperative industry and three from the commercial industry, will be elected in November 2004.

Stockholders of record as of August 10, 2004, may nominate up to three eligible individuals from their industry segment; cooperative or commercial. All eligible individuals receiving at least 10 nominations are entered on the official ballot as candidates for either the three cooperative positions or the three commercial positions. An eligible individual is defined as a director, manager, or other employee within the same industry segment of the stockholder; cooperative or commercial.

Letter [.pdf]
Nomination From [.doc, .pdf]

November 2003 - RTB Financial Report .pdf

October 2003: Download the RTB Notice of Stockholder's Meeting on November 14, 2003 -- (includes Voting Representative Certification Form) .pdf

RTB Summary

In 1949, only 39 percent of rural residents and US farms were receiving telephone service of any kind. The need and demand for rural telephones, for area coverage (commonly referred to as "universal service" today), and for a source of long-term financing to build a rural telecommunications infrastructure was evident if rural America was to survive and prosper. On October 28, 1949, amendments to the Rural Electrification Act (RE Act) of 1936, which established the Rural Electrification Administration (REA)¹, paved the way for establishing a source of long-term financing to build and maintain quality rural telephone systems. Three months after the telephone amendment was signed into law, REA had received 1,117 loan inquiries from 44 States.

By 1971, REA telephone loans had been made to build and improve 565,000 miles of telephone line serving approximately 8,000,000 residents in rural areas. Nevertheless, the managers of the rural telephone systems felt that sufficient Government loan funds would not always be available to meet their expanding needs, so they went to the Congress with proposals for the establishment of a telephone bank.

On May 7, 1971, the Rural Telephone Bank (Telephone Bank) was established by amendment to the RE Act as a source of supplemental financing for telecommunications companies and cooperatives eligible to borrow under the RE Act’s telephone loan program. A Board of Directors was appointed to manage the operations of the Telephone Bank and the employees of REA performed the Telephone Bank's day to day operations. By establishing a capital structure which provided for a mixed Federal and private ownership, the Telephone Bank was designed to assure rural telephone systems access to private sources of capital by establishing a supplemental credit mechanism to which borrower systems may turn for all or part of their future capital requirements. The capital structure of the Telephone Bank consists of three classes of stock: Class A, Class B, and Class C. Class A stock was issued to the Telephone Bank in exchange for appropriated $600 million of capital provided by the taxpayers. This provided the Telephone Bank with its initial "seed" money to begin its lending operations. The Telephone Bank pays an annual dividend of two percent on Class A stock. Class B stock is purchased by recipients of Telephone Bank loans in an amount equal to five percent of the loan. Class B stock does not earn a cash dividend but Telephone Bank borrowers acquire additional shares of Class B stock through patronage refunds. Class C stock may be purchased by Telephone Bank borrowers, entities eligible to borrow from the Telephone Bank, and by organizations controlled by Telephone Bank borrowers. Class C stock earns a cash dividend at a rate determined by the Board of Directors. In addition to providing for a mixed-ownership through the A, B, and C classes of stock, the RE Act amendment also provided that the ownership, control, and operation of the Telephone Bank be transferred to the Class B and C stockholders after 51 percent of the Class A stock was retired (known as privatization of the Telephone Bank). The retirement of Class A stock began in fiscal year 1996.

The Telephone Bank and RUS telecommunications program have been building the foundation for the information superhighway in rural America for 50 years. With the assistance of the Telephone Bank and RUS, rural telecommunications companies have been able to obtain financing for the improvement and expansion of telecommunications service in rural areas. In addition to providing financing, RUS also establishes standards that are not only used by its borrowers but by the industry worldwide. With over 45 years of management and technical experience in rural telecommunications, the Telephone Bank and RUS have together acted as the Government’s arm in representing rural America in telecommunications.

¹ In 1994, Public Law 103-354 (108 Stat. 3178) abolished REA and established the Rural Utilities Service (RUS) as its successor.