Editor’s Note: The most recent edition of Broadband Communities Magazine features a special section on rural broadband, including this overview piece about the passage of the Agricultural Improvement Act and the ReConnect. Incidentally, the U.S. Department of Agriculture’s series of webinars on the program continue with events on Tuesday, March 12; Thursday, March 14; and Wednesday, March 20. For details about upcoming events, visit https://www.usda.gov/reconnect/events.
New Funding For Rural Broadband January/February 2019 • By Drew Clark | BroadbandBreakfast.com | The passage of the Agricultural Improvement Act and the opening of a funding window for the ReConnect program will help narrow the rural digital divide.
The U.S. Department of Agriculture has two new significant broadband programs to implement in addition to its existing telecommunications-focused programs.
On December 20, 2018, President Trump signed the Agriculture Improvement Act, known as the “farm bill.” In addition to including measures designed to stimulate rural broadband, the act also revamped several aspects of Rural Utilities Service broadband funding.
One week earlier, the Agriculture Department unveiled the details of its $600 million broadband loan and grant program – dubbed ReConnect – which was originally called for by appropriations legislation passed in March 2018.
Farm Bill Additions
The farm bill, H.R. 2, passed by the House of Representatives on December 12 and by the Senate one day earlier, included a number of items previously included in the Precision Agriculture Connectivity Act and increased funding for RUS grant and loan programs to $350 million for the years 2019 to 2023. It annually allocates $50 million for Community Connect grants, $10 million for rural middle-mile infrastructure grants and loans, and $10 million for a gigabit-focused program called the Innovative Broadband Advancement Program.
The precision agriculture measure established a task force to identify connectivity gaps in agricultural areas. Members, who will be nominated by the USDA and the Federal Communications Commission, will also develop policy recommendations to promote the rapid, expanded deployment of fixed and mobile broadband internet access service on unserved agricultural land, with a goal of achieving reliable capabilities on 95 percent of agricultural land in the United States by 2025.
The task force will propose effective policy and regulatory solutions that encourage the adoption of broadband internet access service on farms and ranches and promote precision agriculture; recommend specific steps that the FCC should take to obtain reliable, standardized data measurements of the availability of broadband internet access to unserved rural areas; and explore ways that USDA expertise can inform FCC policies.
Additionally, the farm bill legislation codifies the Agriculture Department’s definition of minimum acceptable broadband speeds at 25 Mbps downstream and 3 Mbps upstream. And it will require that RUS fund projects only in areas where at least 90 percent of households lack access to internet speeds of more than 10 Mbps downstream/1 Mbps upstream.
ReConnect Details Unveiled
On December 13, one day after the House passed the farm bill, the USDA released the long-awaited details of the ReConnect program. It implements the $600 million in new funding that was included in the $1.3 trillion congressional omnibus spending bill passed in March 2018.
“High-speed internet e-connectivity is a necessity, not an amenity, vital for quality of life and economic opportunity, so we hope that today rural communities kick off their rural broadband project planning,” said Agriculture Secretary Sonny Perdue, who spoke at a briefing at the department’s headquarters near the National Mall. “We don’t want an urban-rural divide in the county,” he said. “When are we going to stop having to drive rural kids to places where they can do homework by skimming off Wi-Fi from fast food restaurants?”
The program is being administered by USDA Rural Development, the umbrella agency at the Agriculture Department that includes the Rural Utilities Service.
Jannine Miller, senior adviser for rural infrastructure to Perdue, introduced the secretary, saying that “connecting America is truly transformative.”
Funding Rules for ReConnect
Municipalities, rural electric co-ops and utilities, and private internet companies may all apply for funding through ReConnect.
The USDA will make available approximately $200 million for grants, $200 million for loan and grant combinations and $200 million for low-interest loans. The grant applications are due by April 29, 2019, the loan-grant combination applications are due May 29, and loan applications can be submitted between March 1 and June 28. (At press time, the USDA was shut down, so these dates may have to be adjusted.)
Chad Parker, the Rural Utilities Service assistant administrator for telecommunications policy, said that projects funded through this initiative must serve communities with fewer than 20,000 people who have no broadband service or whose service is slower than 10 Mbps download and 1 Mbps upload.
“Approved projects must create access speeds of at least 25 Mbps download and 3 Mbps upload,” Parker added. Priority will be awarded for projects that propose to deliver higher-capacity connections to rural homes, businesses and farms.
“USDA seeks to stretch these funds as far as possible by leveraging existing networks and systems without overbuilding existing services greater than 10/1 Mbps,” the USDA said in a news release.
Evaluation criteria include connecting agricultural production and marketing, e-commerce, health care and education facilities. The grant program and grant/loan combination program will award funding to the applicants with the highest scores according to the evaluation criteria, but the pure loans will be awarded on a rolling basis to any qualified applicant.
Previous research by the USDA – and many others – has connected high-capacity broadband to all aspects of rural prosperity, including the ability to grow and attract businesses, retain and develop talent and maintain rural quality of life.
The USDA is holding a series of webinars and regional in-person workshops; a list of upcoming public webinars and workshops is available at ReConnect’s resource portal at reconnect.usda.gov.
The historical genesis of the program includes the Trump administration’s establishment of an Interagency Task Force on Agriculture and Rural Prosperity to identify legislative, regulatory and policy changes that could promote agriculture and prosperity in rural communities.
The task force findings included 31 recommendations to align the federal government with state, local and tribal governments to take advantage of opportunities that exist in the rural United States, and increasing investments in rural infrastructure was a key recommendation of the task force.
At the time of the March 2018 omnibus appropriation bill’s passage, Perdue said that “increased support for broadband internet access is in line with administration goals and will be an important boost as we look to improve the economy in rural America.”
Reception to ReConnect
A variety of other government and nongovernment entities weighed in with support for the ReConnect program.
Senate Agriculture Committee ranking member Debbie Stabenow, D-Mich., said in a statement, “I’m pleased the USDA is finally moving forward on the $600 million high-speed internet investment Congress provided in the 2018 omnibus. Expanding high-speed Internet access is vital to the growth and success of our small towns and rural communities in Michigan and across the country.”
When the bill was passed in March, Stabenow noted that the $600 million for rural broadband “represents the largest investment in broadband expansion since the American Recovery and Reinvestment Act of 2009.”
Jim Matheson, CEO of the National Rural Electric Cooperative Association, said, “Secretary Perdue’s announcement lays the groundwork for an improved approach to making broadband a reality across rural America. This pilot program and the strong broadband provisions included in the 2018 farm bill highlight a much-needed shift in federal policy to make rural broadband a possibility for the estimated 23 million Americans who lack it.
“More than 100 electric co-ops have launched broadband deployment projects to help modernize rural economies,” Matheson added. “We are very pleased that the pilot program adopts a 25/3 sufficiency standard and will prioritize applications that would deliver speeds in excess of the 25/3 minimum standard.”
Matheson said “all capable providers should have equal access to federal funding” and that grants should be prioritized in areas with the lowest population density “given that is a prime cost driver of the lack of broadband deployment.”
Source: New Funding For Rural Broadband, from Broadband Communities
Broadband Breakfast on October 27, 2021 — When ‘Greenfield’ Fiber Meets ‘Brownfield’ Multiple Dwelling Units
What options do owners of, operators in, and tenants within MDUs have for better-quality broadband?
Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the October 27, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.
Wednesday, October 27, 2021, 12 Noon ET — “When Greenfield Fiber Meets Brownfield Multiple Dwelling Units”
Bringing fiber to the premises is sometimes only half the battle. For example, bringing fiber to an MDU may not mean that every tenant will get better-quality broadband. In the case of multiple dwelling units or multi-tenant housing, it isn’t easy to completely rewire an existing building with fiber-to-the-unit. Further, the Biden Administration and the Federal Communications Commission are pushing real estate owners to eliminate or minimize exclusive MDU broadband contacts. What options do the owners of, operators in, and tenants within MDUs have to enjoy both competitive and better-quality broadband?
- Sandra Howe, Board of Directors, Minim
- Pierre Trudeau, President and Chief Technology Officer, Positron Access
- Other Guests have been invited
- Drew Clark (moderator), Editor and Publisher of Broadband Breakfast
Drew Clark, Editor and Publisher of Broadband Breakfast, also serves as Of Counsel to The CommLaw Group. He has helped fiber-based and fixed wireless providers negotiate telecom leases and fiber IRUs, litigate to operate in the public right of way, and argue regulatory classifications before federal and state authorities. He has also worked with cities on structuring Public-Private Partnerships for better broadband access for their communities. Drew brings experts and practitioners together to advance the benefits provided by broadband. He is also the President of the Rural Telecommunications Congress.
As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.
National Non-Profit to Launch Joint Initiative to Close Broadband Affordability and Homework Gap
EducationSuperHighway is signing up partners and will launch November 4.
WASHINGTON, October 18, 2021 – National non-profit Education Super Highway is set to launch a campaign next month that will work with internet service providers to identify students without broadband and expand programs that will help connect the unconnected.
On November 4, the No Home Left Offline initiative will launch to close the digital divide for 18 million American households that “have access to the Internet but can’t afford to connect,” according to a Monday press release.
The campaign will publish a detailed report with “crucial data insights into the broadband affordability gap and the opportunities that exist to close it,” use data to identify unconnected households and students, and launch broadband adoption and free apartment Wi-Fi programs in Washington D.C.
The non-profit and ISPs will share information confidentially to identify students without broadband at home and “enable states and school districts to purchase Internet service for families through sponsored service agreements,” the website said.
The initiative will run on five principles: identify student need, have ISPs create sponsored service offerings for school districts or other entities, set eligibility standards, minimize the amount of information necessary to sign up families, and protect privacy.
The non-profit said 82 percent of Washington D.C.’s total unconnected households – a total of just over 100,000 people – have access to the internet but can’t afford to connect.
“This ‘broadband affordability gap’ keeps 47 million Americans offline, is present in every state, and disproportionately impacts low-income, Black, and Latinx communities,” the release said. “Without high-speed Internet access at home, families in Washington DC can’t send their children to school, work remotely, or access healthcare, job training, the social safety net, or critical government services.”
Over 120 regional and national carriers have signed up for the initiative.
The initiative is another in a national effort to close the “homework gap.” The Federal Communications Commission is connected schools, libraries and students using money from the Emergency Connectivity Fund, which is subsidizing devices and connections. It has received $5 billion in requested funds in just round one.
Steve Lacoff: A New Standard for the ‘Cloudification’ of Communications Services
The cloudification of communications services makes it easy to include voice, data, SMS, and video within any existing service.
The line of demarcation between what has traditionally been considered a telecommunications service was once very clear. It was tangible – there were wires, end points, towers, switches, facilities. Essentially, there was infrastructure required to relay voice or data from point A to point B.
Today that line is fuzzy, if not invisible. The legacy infrastructure remains, but an industry of cloud-based services that don’t require the physical connections has exploded. Voice, data, SMS, and video conferencing can now be conveniently delivered OTT. Enabled by simple API integrations, businesses can embed just one of these services or a complete communications platform-as-a-service (CPaaS) into an app, service, or product.
Cloudification is a game changer
This “cloudification” of communications services makes it easy to include voice, data, SMS, and video within any existing application, product, or service. These are essential components for many business models.
Consider these services we have come to rely on in our daily lives: food or grocery delivery, ride services, and business and personal communications. These require multiple methods of communication with shoppers, drivers, co-workers, watch party groups, and external business partners.
The exciting news is there is no end in sight. Use cases will continue to evolve and growth will continue to skyrocket. The scale cloud delivery accommodates is massive. These untethered, easy to embed communications services are a critical differentiator for both business-to-business and business-to-consumer buyers, and the lifeblood of the businesses providing both the end user subscriptions and the APIs.
In fact, one industry juggernaut saw H1 YoY video application service demand grow nearly 600% in 2020.
Not surprisingly, as business demand for these services increases smaller CPaaS players continue to enter the market to quickly snag market share. According to a recent IDC study, “the global market revenue for CPaaS reached $5.9bn in 2020, up from $4.26bn in 2019, and is expected to reach $17.71bn by 2024.”
Merger and acquisition activity is aligned with this hockey stick growth forecast. Large telcos, SaaS providers, and even other CPaaS providers are all on the hunt. Whether they want to add additional features to punch up their products or eliminate the competition in a very tight, nuanced market, the end game is clear – as the market expands, the players will ultimately contract leaving only the most competitive offerings.
Don’t let communications tax take you by surprise
One of the least understood risks when adding cloud-based voice, data, SMS, or video conferencing to an existing product or service is new eligibility for and exposure to the complex world of communications taxation. Making mistakes can get costly very quickly.
Here are some of the key pitfalls to keep an eye on:
- Expanded nexus: Understanding communications tax nexus is different – and exceptionally more complicated – than sales tax. There are approximately 60,000 federal, state, local, and special taxing jurisdictions, each with uniquely complex rules that tend to change at their own pace. Rules are very different for each service.
- More complex calculations: The more communications services you provide via API, the more complicated communications taxes will be. Each feature can be taxed at different rates in each individual jurisdiction, or the whole bundle can be taxed at one rate. It’s critical to monitor monthly to avoid audit issues.
- Maintaining overall compliance: Just as tax rates and rules need to be maintained, so must tax and regulatory filing forms in each jurisdiction. Some of these are very long and require significant detail. They must be filed in a timely, accurate cadence to avoid additional audit risk.
Bottom line: Don’t assume, be prepared! As these communications services become more pervasive a larger swath of technology providers will find themselves liable for communications tax. The more your business falls behind, the more it can cost you.
It pays to be proactive and prepared. Tax and legal advisory experts can help determine your level of risk, and tax and compliance software providers can help you keep up with changing rules and regulations. Don’t underestimate the ongoing value of networking with peers who are either struggling to answer the same questions or have already overcome the hurdles you’re facing today.
Steve Lacoff is General Manager of Avalara for Communications. With a focus on data, VoIP, and video streaming, Steve has spent 15 years in various product and marketing leadership roles in communications and technology industries, including Disney’s streaming services and Comcast technology solutions. Steve now drives business strategy on today’s changing industry landscape and associated tax impacts. This piece is exclusive to Broadband Breakfast.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to email@example.com. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
- LEO Satellite Technology Should Be in All Schools, Gigabit Libraries Network Says
- Housing, Public Interest Groups Oppose Multitenant Exclusivity Agreements
- Broadband Breakfast on October 27, 2021 — When ‘Greenfield’ Fiber Meets ‘Brownfield’ Multiple Dwelling Units
- Federal Communications Commission Dispenses $544 Million in Rural Broadband Funds
- Google, Municipal Groups Oppose Mediacom Request to Block Google-City Infrastructure Deal
- ‘Squid Game’ Exposes Traffic Problem, Virginia’s $2B Broadband Investment, West Virginia Mapping
Signup for Broadband Breakfast
Antitrust4 months ago
Experts Disagree Over Need, Feasibility of Global Standards for Antitrust Rules
Broadband Roundup2 months ago
Senators Intro App Bill, Groups Drop TracFone Buy Complaint, States Want Shorter Robocall Deadline
Infrastructure3 months ago
Lumen Responds to Allegations it Underbuilds While Collecting Public Funds
Broadband Roundup2 months ago
Mapping Comment Deadline Extended, AT&T Gets Federal Contract, 5G and LTE Drive Microwave Demand
Antitrust4 months ago
House Judiciary Committee Clears Six Antitrust Bills Targeting Big Tech Companies
Antitrust3 months ago
Daniel Hanley: Federal Communications Commission Must Block Verizon’s Acquisition of TracFone
#broadbandlive2 months ago
Broadband Breakfast on September 1, 2021 — What’s Next for Broadband Infrastructure Legislation?
Section 2303 months ago
Facebook, Google, Twitter Register to Lobby Congress on Section 230