A recent Government Accountability Office (GAO) report reveals what’s been obvious to broadband deployment experts for years now: the federal government’s multi-agency approach to closing the digital divide is undermined by a lack of coordination and data-management among agencies.

The result is an FCC broadband coverage map with an amalgamation of inaccuracies that misrepresents where high-speed Internet service does or does not exist, a flaw that can steer taxpayer dollars away from communities that actually need them.

Since 2020, four federal agencies — the FCC, NTIA, USDA and Treasury — have been administering nine different grant programs to build-out new Internet networks in unserved and underserved areas across the nation, including the $42.5 billion federal flagship BEAD (Broadband Equity Access and Deployment) program.

As ILSR’s Senior GIS Analyst Christine Parker notes, the report devotes considerable attention to “de-duplication” — the process of cross-referencing which locations have already received funding or service commitments from one program so that other programs don't waste money doubling up, or worse, leave locations out entirely because it was wrongly assumed to be covered elsewhere.

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“But there’s no documented process or timeline for actually doing this,” Parker says.

Garbage In, Garbage Out

Part of the problem, the report notes, is that agencies track and report funding data in different formats, with some programs collecting far more granular location-level detail than others so that it is much harder to reconcile the datasets and match them up. GAO indicates the agencies are aware of the issue and are working to reconcile it, but as of the report’s release, no consistent process was in place.

The application deadline for the Capital Projects Fund, which will direct $100 million in federal funding to Tribal governments to build broadband infrastructure, has been extended to August 15th, 2022. It's a relateively simple application, offering $167,000 in grant funds to each Tribal government.

The fund explicitly emphasizes capital outlay for new infrastructure projects. From the Department of Treasury, uses include:

Capital assets designed to directly enable work, education, and health monitoring.

Project[s] designed to address a critical need that resulted from or was made apparent or exacerbated by the COVID-19 public health emergency.

Project[s] designed to address a critical need of the community to be served by it.

Examples of projects provided by the Treasury include:

Purchasing digital connectivity devices, such as desktop computers, laptops, or tablets, to facilitate internet access

Purchasing digital connectivity technologies, such as public Wi-Fi, to facilitate internet access

Supplementing another federal government broadband program (e.g., Coronavirus State and Local Fiscal Recovery Funds, NTIA Tribal Broadband Connectivity Program, or other funds) that meet minimum service standards provided by the Capital Projects Fund Guidance

Installing or enhancing broadband infrastructure to serve communities by meeting minimum service standards provided by the Capital Projects Fund Guidance

Constructing or improving buildings, such as multi-purpose community centers, that are designed to jointly enable work, education, and health monitoring

It's worth pointing out, via the Treasury guidance page, that "as of April 4, 2022, applicants are required to provide a Universal Entity ID (UEID) number when applying for CPF funds, and will no longer need to provide a DUNS number." More instructions here.

Additional resources:

The application deadline for the Capital Projects Fund, which will direct $100 million in federal funding to Tribal governments to build broadband infrastructure, has been extended to August 15th, 2022. It's a relateively simple application, offering $167,000 in grant funds to each Tribal government.

The fund explicitly emphasizes capital outlay for new infrastructure projects. From the Department of Treasury, uses include:

Capital assets designed to directly enable work, education, and health monitoring.

Project[s] designed to address a critical need that resulted from or was made apparent or exacerbated by the COVID-19 public health emergency.

Project[s] designed to address a critical need of the community to be served by it.

Examples of projects provided by the Treasury include:

Purchasing digital connectivity devices, such as desktop computers, laptops, or tablets, to facilitate internet access

Purchasing digital connectivity technologies, such as public Wi-Fi, to facilitate internet access

Supplementing another federal government broadband program (e.g., Coronavirus State and Local Fiscal Recovery Funds, NTIA Tribal Broadband Connectivity Program, or other funds) that meet minimum service standards provided by the Capital Projects Fund Guidance

Installing or enhancing broadband infrastructure to serve communities by meeting minimum service standards provided by the Capital Projects Fund Guidance

Constructing or improving buildings, such as multi-purpose community centers, that are designed to jointly enable work, education, and health monitoring

It's worth pointing out, via the Treasury guidance page, that "as of April 4, 2022, applicants are required to provide a Universal Entity ID (UEID) number when applying for CPF funds, and will no longer need to provide a DUNS number." More instructions here.

Additional resources:

This morning, the Department of Treasury announced the first round of Capital Projects Fund (CPF) awards to states putting together portfolios to deploy new infrastructure to unserved households. Across Louisiana, New Hampshire, Virginia, and West Virginia, 200,000 locations will see new deployments capable of 100/100 Mbps at a total cost of almost $583 million. 

It’s a welcome announcement that should assemble a wide range of solutions and result in much better connections for more than half a million people across the country long left behind by policy and infrastructure solutions so far. It also marks those states which have been more proactive in getting their ducks in a row as early as possible, and opening a dialogue with Treasury about how to use the CPF funds expeditiously to solve remote work, healthcare, and education in the face of the ongoing publish health crisis.

The Basics

The CPF is made up of $10 billion, and part of the $1.9 trillion American Rescue Plan Act passed last year. It complements the $350 billion State and Local Fiscal Recovery Funds (SLFRF) (which can be used for water, sewer, or broadband infrastructure) as well as the Emergency Connectivity Fund (ECF). New infrastructure must be capable of delivering symmetrical speeds of 100 Mbps. There are no local matches required (though most states are and will likely institute some form of requirement).

Now that the fight over federal funding to expand broadband access has been largely settled with the passage of the American Rescue Plan Act (ARPA) and the Infrastructure Investment and Jobs Act (IIJA), states and local communities are preparing to put those funds to work.

The Biden Administration had initially hoped to tip the scales in favor of building publicly-owned broadband networks as the best way to boost local (more affordable) Internet choice, and inject competition into a market dominated by monopoly incumbents. And while the Treasury rules on how Rescue Plan money can be spent does give states and local governments the ability to do just that, the rules for how the IIJA’s Broadband Equity, Access, and Deployment (BEAD) program can be spent have yet to be finalized by the National Telecommunications and Information Administration (NTIA), the agency in charge of allocating those funds to the states.

Predictably, the big monopoly incumbents are focusing their lobbying efforts on state lawmakers as states funnel those federal funds into state broadband grant programs. In some states, Big Telco is getting the desired result: the shunning of publicly-owned network proposals to shield monopoly providers from competition. Of course, we expected some states – especially those with preemption laws that either erect barriers to municipal broadband or outright ban such networks – to shovel most of their federal broadband funds to the big incumbents, even though they have a long track record of over-promising and under-delivering. 

But while we might expect Florida and Texas to favor the private sector and stealthily move to shut out projects that are publicly-owned, we’re surprised that the first place it’s happening is actually Illinois and New York.

Illinois Lawmakers Thumb Nose at Federal Law

Like numerous U.S. counties, large segments of Kandiyohi County, Minnesota (pop. 44,000) lack access to affordable Internet service at modern speeds. So like many underserved communities, the county—situated about ninety miles west of Minneapolis—is looking to take advantage of a once-in-a-lifetime collision of funding opportunities to help finance a massive fiber broadband expansion across numerous county townships. 

A recent survey by the county unsurprisingly reveals that residents are greatly annoyed by the lack of affordable Internet access options, with 64 percent of locals saying they’re dissatisfied with the Internet service provided by regional monopolies.

Ten Projects on Tap

Hoping to address the shortcoming, Kandiyohi County and the City of Willmar Economic Development Commission have been working on ten different projects to shore up Internet access around the county. 

Some of the proposed projects involve partnerships with national monopoly providers like Charter Communications, but others will involve the county and a local cooperative doing the heavy lifting. The county had hoped to fund the projects with a combination of subscriber fees, American Rescue Plan funds, NTIA grants, and upcoming Minnesota state grants.

The first major project closest to being “shovel ready” is a $10 million fiber-to-the-home (FTTH) project in partnership with the Federated Telephone Cooperative of Morris. Federated is expected to finance twenty-five percent of the overall project, with new subscribers expected to pay about $1,250 per household to connect to the gigabit-capable network. 

Communities across the United States got an unexpected gift from the Biden Administration last week in the form of additional flexibility to use Rescue Plan funds for needed broadband investments, particularly those focused on low-income neighborhoods in urban areas. 

When Congress developed and passed the American Rescue Plan Act, it tasked the Treasury Department with writing the rules for some key programs, including the State & Local Fiscal Recovery Funds (SLFRF). That program is distributing $350 billion to local and state governments, which can use it for a variety of purposes that include broadband infrastructure and digital inclusion efforts.

Treasury released an Interim Final Rule in May, 2021, detailing how local governments would be allowed to invest in broadband. I promptly freaked out, at the restrictions and complications that I (and others) feared would result in local governments backing away from needed broadband investments due to fears of being out of compliance with the rule. 

After we worked with numerous local leaders and the National League of Cities to explain the problems we saw in the proposed rule, Treasury released updated guidance in the form of a Q&A document to explain how local governments would be able to build and partner for needed networks. 

Given the many challenges the Biden Administration has had to deal with, we did not expect significant new changes to the Rescue Plan rules around the SLFRF. But after many months of deliberations, the Treasury Department has resolved all of the concerns that we identified as areas of concern in May. 

As we explain below, local governments have wide latitude to use SLFRF funds for a variety of needed broadband infrastructure investments, especially to resolve affordability challenges.

Summary and TL;DR

In this episode of the Connect This! Show, co-hosts Christopher and Travis Carter (USI Fiber) are joined by Kim McKinley (UTOPIA Fiber) and Doug Dawson (CCG Consulting) to kick off the new year.

The panel will dig into the recently released Final Rules released by the Treasury on use of the Rescue Plan dollars, before diving into some regional developments in New York and Los Angeles. They'll end by sharing some thoughts about how the broadband landscape is likely to shape up during the coming year.

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