A monumental task ahead!
The broadband fund is not the only money available for building out America’s digital infrastructure. There are dozens of federal and state programs, Connected Nation, a non-profit dedicated to closing gaps in digital equity, puts the total at nearly USD 367 billion.
High-speed internet access is not a luxury, but a basic necessity for economic and human development. USA has taken this step as a national priority and the Department of Commerce has proposed a bill of USD 65 billion in funding for broadband expansion and affordability. 19 million Americans today lack access to high-speed internet. The administration’s goal is for every single American to have access to high-speed affordable broadband, which means truly affordable.
Projects must meet a minimum speed requirement of 100/20 megabits per second, significantly faster than the Federal Communications Commission’s current standard of 25 Mbps down and 3 Mbps up.
The infrastructure bill’s broadband provisions take three general forms – funding to expand broadband service, with the goal that every American has access to affordable, high-speed internet; create low-cost options for service; and funding to subsidize the cost of broadband service for consumers.
The USD 65 billion breaks down into four major categories – Deployment, emergency benefits, adoption, and miscellaneous, and will be distributed in different ways over the next five years.
Deployment. The largest chunk, USD 42.5 billion, is allocated to the Broadband Equity, Access, and Deployment (BEAD) program, which will be managed by the National Telecommunications and Information Administration (NTIA). This program will be distributed to individual states based on grant requests. Each state and some US territories will receive a minimum of USD 100 million at the start for broadband deployment in unserved and underserved communities, connectivity at anchor institutions, broadband data, maps and plans, internet or Wi-Fi infrastructure or low-cost broadband for multifamily residential buildings, broadband adoption, and other items, deemed necessary by NTIA.
US Secretary of Commerce
“Thirty, forty, fifty years from now, we will look back on this as the turning point, as a critical turning point. Nobody can be left behind, and that means everybody has broadband.”
Dr Robert Spalding
Retired US Air Force brigadier general who was the White House National Security Council’s senior director for strategy
“We have not had a significant infrastructure upgrade in 30 years since the Cold War. Overall, this is a good start.”
President, Fiber Broadband Association
“We now need to move our focus from Congress to NTIA and the state and local level. Only 26 states have broadband offices, others have a designate. And, while 40 states have broadband programs, these programs vary widely.”
The NTIA program will allocate three discrete categories of funding to individual states.
- Minimum allotment. The first category of funding (USD 5.3 billion) is a minimum allotment of USD 100 million to each state, with an additional USD 100 million in funding to be allocated equally among certain US territories.
- High-cost funding. The second category (USD 4.25 billion) would be allocated for broadband deployment projects based on unserved locations in high-cost areas in each state, as determined by NTIA based on factors defined in the bill (e.g. geographic remoteness, low population density, poverty, etc.).
- Unserved funding. The third category of funding (approximately USD 32.2 billion) would be allocated for broadband deployment projects, based on any unserved locations in each state.
On or after publication of the broadband maps (DATA Maps) by the Federal Communications Commission, pursuant to the recently enacted Broadband DATA Act, NTIA must allocate the high-cost funding and the unserved funding to states. Once a state submits an LoI, initial proposal, or final proposal, NTIA will allocate high-cost funding and unserved funding to states, based on two formulas defined in the bill, which compare the number of high-cost and unserved areas in a given state against the national average. In the event a state fails to submit the required application, a political subdivision or consortium of political subdivisions of the state may do so in its place. In the event neither do so, NTIA must reallocate the grant funding to other states. The bill describes the timeline for states to submit these letters and proposals at length, indicating information that NTIA is permitted to require of applicants at each stage of the process, as well as the percentage of funding that is released at each stage of the process.
Emergency Benefits. During the pandemic, a broadband subsidy called the Emergency Broadband Benefit Program was created. The infrastructure bill dedicates USD 14.2 billion to extending and expanding this program. Take note, however, the program will now only offer a USD 30 monthly subsidy to eligible households as opposed to USD 50, the original amount.
Adoption. As part of a commitment to help make broadband internet available to all citizens, the bill dedicates USD 2.75 billion to digital-inclusion efforts.Specifically, USD 1.5 billion will go to the State Digital Equity Capacity Grant Program. This money will be split into two pots – USD 60 million for states to create digital equity plans and USD 1.44 billion to assist with the implementation of such plans. In regard to the latter amount, this money is supposed to act as a supplement to state and local dollars.Another USD 1.25 billion will fund the Digital Equity Competitive Grant Program. This money will not go to digital equity programs, as defined by the State Digital Equity Capacity Grant Program mentioned above. Funds must be spent on items like digital-inclusion activities, computer training, devices, and public computing centers at anchor institutions.
Miscellaneous. USD 2 billion will go toward rural utilities service grants, offered by the US Department of Agriculture; USD 2 billion will fund Tribal Broadband Connectivity Program grants; USD 1 billion will be available for middle-mile projects; and USD 600 million will support private equity bonds for broadband.
“There was a misperception that this is about handouts and giveaways. But Covid made it clear that (broadband improvements) make the infrastructure of the US economy work better. This impacts education, remote training, telehealth, working from home.”
CEO, Rubrik Inc.
“With high-speed internet access available to millions of more people, the likelihood for cyberattacks escalates. It amplifies security risks as everyone has access to the superfast digital highway. Data security is going to be a massive challenge.”
CEO of regional internet service provider Sonic
“The new USD 30 subsidy won’t be enough for many to buy decent access. While rural gets a lot of attention, there’s a larger number of unconnected households, and the reduction in the subsidy will only perpetuate that.”
On November 5, 2021, the US House of Representatives voted 228-206 to approve the bill. The Infrastructure Bill, which had already cleared the Senate in August, will now proceed to the President’s desk.
The cost of internet service in US cities is among the most expensive in the world. The new bill may not do much to change that. One challenge to making broadband more affordable is that the infrastructure bill replaces the FCC’s current USD 50-per-month emergency broadband benefit for low-income households, part of the American Rescue Plan response to the pandemic, with a USD 30 stipend.
Those hoping that the infrastructure bill will spur competition in areas served by only one or two providers – and thus lead to lower prices overall – may also be disappointed. Local co-ops and municipally owned networks are eligible to compete for funds in the 32 states, where such entities are allowed, but the bill does not give them any advantages over incumbents. When the bill was originally proposed, those entities were given priority.
Before any of this can get started, however, there are barriers to overcome; the biggest – we do not actually know who has access to broadband and who does not. FCC maps produced in 2020 estimate that approximately 14.5 million Americans lack access to high-speed internet.
But that is widely considered a woeful undercount, because it relies on forms submitted by service providers and reports by census block; if one household in a census block of a thousand is connected to broadband, that neighborhood is counted as served.
BroadbandNow, an ISP comparison site that conducted its own survey of more than 100,000 addresses using FCC data, puts the number of un- or underserved Americans at 42 million. Other estimates put the number closer to 60 million.
The Broadband Deployment Accuracy and Technological Availability (DATA) Act of 2020 directs the FCC to create new, more granular maps that states can use to determine where their needs are greatest. The FCC has not released an update on its progress; it did not respond to multiple requests for comment.
The National Telecommunications and Information Administration (NTIA), which is tasked with issuing grants to the states, has 180 days after the bill’s signing to issue a Notice of Funding Opportunity so states can apply for grants. But first, it needs the new FCC maps.
Meanwhile, the NTIA is also lacking a top administrator. The Biden administration has nominated former Google and Mozilla executive Alan Davidson for the role, but no date for confirmation hearings had been set at publication time.
The broadband fund is not the only money available for building out America’s digital infrastructure. There are dozens of federal and state programs aimed at bringing the country’s internet access up to speed with the rest of the planet; Connected Nation, a non-profit dedicated to closing gaps in digital equity, puts the total at nearly USD 367 billion.
But it will be a long time before any of this comes to fruition.
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