FCC Plans To Inject $1.5 Billion Into Rural Broadband Expansion ##TOP##
The shift of work and school online highlighted the lack of access to high-speed broadband internet service in some parts of the U.S. and intensified political pressure on the government to make it more widely available. The bipartisan infrastructure bill that Congress sent to the White House in November 2021 includes $65 billion over ten years to finance expansion of broadband.
FCC plans to inject $1.5 billion into rural broadband expansion
Although a larger share of rural households lack broadband (about 19% of rural households, as opposed to 14% of urban households, according to the Census Bureau), in absolute numbers, about three times as many households without broadband are in urban areas. Many urban families already have broadband network infrastructure physically available but are unable to afford internet services. Since underserved urban areas are predominantly comprised of people of color and lower-income neighborhoods, addressing urban connectivity as part of a broadband expansion initiative could have significant implications for racial and socioeconomic equity.
Finally, the evolving digital landscape has made swift, unilateral action to expand broadband more complicated. As access to resources increasingly shifts online, many people have begun to consider broadband a necessity akin to electricity, but to what extent this justifies significant government intervention in the market for internet service is a subject of debate between Democrats and Republicans. Developing technologies have also shifted the goalposts for internet speeds and the best methods to deploy service. Fiber broadband networks are often considered the best option to avoid reinstallations in the future, but some argue that prioritizing funding for fiber networks has slowed expansion into areas where it is topographically difficult to lay down fiber.
Highlighted by COVID-19, the remaining gaps in access have become a higher priority in Congress over the past year. During the pandemic, the CARES Act and Consolidated Appropriations Act allocated $125 million and $7.5 billion, respectively, for broadband expansion. The American Rescue Plan Act (ARPA) allocated $20 billion for programs exclusively dedicated to broadband, including the Emergency Broadband Benefit, a $50 discount on broadband services and a one-time $100 discount on eligible devices for low income households, the Emergency Connectivity Fund for schools and libraries, and the Capital Projects Fund. Many states also chose to spend some of the funding provided by recent federal COVID-related bills on broadband initiatives.
In one rural Wisconsin county after another, Connect America Fund II has left a trail of skepticism and frustration. Many communities have initiated their own broadband expansion projects, seeking state grants and local partnerships, because they haven't seen much help from the federal government and big-name service providers.
USDA will begin accepting ReConnect round three applications on November 24 for up to $1.15 billion in loans and grants to expand the availability of broadband in rural communities. More information can be found here from USDA.
Interim guidance by the U.S. Treasury on how $350 billion in COVID-19 relief funds may be used for rural broadband recognizes the role electric cooperatives can play and the importance of affordable, future-proof internet access.
As the Biden administration proposes a $100 billion investment in rural broadband, Vice President Kamala Harris praised the work of electric cooperatives in delivering affordable broadband internet access, comparing it to the initial co-op electrification efforts in the 1930s.
Without timely public notice of defaults, census block groups no longer covered by the RDOF may be ineligible for tens of billions of dollars from other federal, state and local programs designated for rural broadband.
As the Federal Communications Commission reviews winning bids for its recent $9.2 billion rural broadband auction, NRECA wants the agency to keep one question in mind: Can these winners actually deliver?
The Office of Broadband works with local and state government agencies, community organizations and private businesses to increase the availability and effectiveness of broadband internet throughout the state, specifically in small and rural communities. Through these partnerships, the Office of Broadband encourages investment in grant funding opportunities for the broadband program that focus on the expansion of broadband.
Carriers that accepted the CAF money are required to finish the broadband deployments by the end of 2020. Pai's proposed Rural Digital Opportunity Fund will be the follow-on program, an FCC spokesperson told Ars. The fund would "inject $20.4 billion into high-speed broadband networks in rural America over the next decade," the FCC said.
He also said the program encourages states to incorporate as many participants as possible into their broadband funding plans. An event to promote the BEAD Program in Durham last week with U.S. Commerce Secretary Gina Raimondo included representatives from county governments, rural electric cooperatives, regional councils of governments and internet service providers.
Once new spectrum is identified and freed up for broadband, there remains the issue of how to assign it to individual providers. The goal in assigning licenses to any such new spectrum designated for commercial services should be to ensure that it generates the greatest ultimate benefits to the consumers of those services. When market power is not an issue, the best way to pursue this goal in allocating new resources is typically to auction them off, on the theory that the highest bidder, i.e., the one with the highest private value, will also generate the greatest benefits to consumers. But that approach can go wrong in the presence of strong wireline or wireless incumbents, since the private value for incumbents in a given locale includes not only the revenue from use of the spectrum but also any benefits gained by preventing rivals from eroding the incumbents' existing businesses. The latter might be called "foreclosure value" as distinct from "use value." The total private value of spectrum to any given provider is the sum of these two types of value. However, the "foreclosure value" does not reflect consumer value; to the contrary, it represents the private value of forestalling entry that threatens to inject additional competition into the market.
In spite of the billions of dollars in private investment and government subsidies over multiple decades, the numbers still paint a disturbing picture. Roughly 39 percent of rural Americans lack access to high-speed broadband, compared with just 4 percent of urban Americans, according to a report from the FCC using 2016 figures.
The digital divide is one of the few issues that Republicans and Democrats can agree on. Since President Obama pledged in his 2011 State of the Union address that high-speed wireless would be available to 98 percent of Americans, there have been fervent discussions about how to get broadband into rural communities.
The issue has also been taken up by President Trump, who has gotten much of his political support in areas where broadband is hard to come by. His infrastructure proposal this year called for $50 billion in rural spending, including on broadband, but so far neither his budget nor the Republican Congress have allocated additional funds for rural broadband deployment.
Pai argues that if the FCC limits the fees that big cities can charge wireless companies to deploy their 5G infrastructure, these carriers will be more willing to plow that money into rural broadband. But critics like Levin called this a false premise and said the FCC's move does nothing more than strip local communities of negotiating power.
Kinetic is simultaneously undergoing a $2 billion, multi-year initiative, funded by private capital, to dramatically expand gigabit internet service across its 18-state footprint. As a result of that network expansion, the company either has or will have fiber in every county it serves in Kentucky over the next couple of years. From 2019 through 2021, the company invested more than $211 million to expand broadband access in the Commonwealth. More than 120,000 locations had access to gig speeds at the end of 2021.
Telecommunications Infrastructure Loans and Loan Guarantee Program The U.S. Department of Agriculture (USDA) Rural Development is accepting applications for loans and loan guarantees to build or update broadband and telephone infrastructure in rural areas where financing can be used for the construction, improvement, or expansion of telecommunications infrastructure serving rural areas with a population of 5,000 or fewer. The application period is ongoing. Visit USDA Rural Development for more information.
Economic Development Grants for Broadband Infrastructure, Adoption, Skills TrainingThe Economic Development Administration (EDA will administer $1.5 billion for economic development assistance, which is being administered under the authority of the bureau's flexible Economic Adjustment Assistance (EAA) program, to provide a wide-range of financial assistance to communities and regions as they respond to and recover from the impacts of the COVID-19 pandemic. EDA is accepting applications from applicants in rural and urban areas to provide investments that support construction, non-construction, technical assistance, and revolving loan fund projects under EDA's Public Works and EAA programs, including planning, broadband infrastructure, broadband adoption, digital skills training, and smart cities. Eligible applicants are libraries, higher education institutions, state and local governments, tribal entities, and nonprofit organizations. Grants and cooperative agreements made under these programs are designed to leverage existing regional assets and support the implementation of economic development strategies that advance new ideas and creative approaches to advance economic prosperity in distressed communities. EDA provides strategic investments on a competitive-merit-basis to support economic development, foster job creation, and attract private investment in economically distressed areas. For more information, click here or contact the Philadelphia Regional Office at (215) 597-4603. 350c69d7ab