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Pandemic and Funding Programs Increasing Investments in Broadband and M&A, Conference Hears

Broadband money programs and a need for connectivity is driving capital into the space.

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2 years ago

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The experts hosted by Broadband Breakfast at the Digital Infrastructure Investment conference on September 27.

HOUSTON, September 27, 2021 – The pandemic and President Joe Biden’s infrastructure agenda are accelerating investments and mergers and acquisitions in broadband related ventures, according to panelists at the Digital Infrastructure Investment conference on Monday.

Experts hosted by Broadband Breakfast said trends that are emerging from the pandemic, the $1.2-trillion infrastructure bill that is now before the House and the Federal Communications Commission’s $9.2-billion Rural Digital Opportunity Fund, are bigger and accelerated investments not just in broadband, but in non-traditional markets.

Digital Infrastructure Investment 2021 was hosted as an online and in person conference by Broadband Breakfast at the Broadband Communities Summit. The recording of the Monday event is available for registration and replay.

“I think [the pandemic] it opened up new markets,” said Lindsay Miller, a partner at law firm Ice Miller. “Whereas for a long time investment was being made in the metropolitan areas, in the big cities, where the return on investment was pretty much certain and likely to be quick, now we’re seeing more investment in small-to-mid-sized cities and rural markets, especially because, in the pandemic, more folks may have relocated to those areas or stayed in those areas.

“So I think we’re seeing a lot of changes in terms of where these investments are taking place,” she added.

For mergers and acquisitions, James Wagar, a partner at Frontbridge Capital, noted companies are buying service providers at very high valuations and using government grants to upgrade the networks.

That strategy may benefit areas that need connectivity fast, as Ryan Carr, a partner at MC Partners, said when he described how some are using the FCC’s RDOF money. He used the example of winners of RDOF money who see that some local service providers can’t provide high enough internet speeds and so they buy the provider and just upgrade the networks.

“They view that as an easier way to get to market faster, rather than them going out and building that network all over again,” Carr said, adding it’s akin to a land grab as it’s not about a thirst for connectivity and how fast you can build out. “So you may be able to go out and buy a local WISP or local ILEC, or whatever it may be…and upgrade their infrastructure as a way to get to market faster.”

Carr added that he expects “continued M&A and a lot more institutional investor interest in this space and continued progress and accelerated investment.”

Local focus a big plus in infrastructure bill

Carr also noted that the infrastructure bill’s focus on state or city level funding, instead of being divvied out from the federal government will give more opportunities for smaller providers perhaps more attuned to their communities.

It gives a “lot of opportunity for smaller providers to access those funds, rather than it just going to a Charter or A&T. A lot of this is going to come down to, how good is your relationship with your local community and your local municipality,” Carr said.

Miller agrees, stating that this is a unique moment for partnerships and new approaches that can be taken for broadband expansion.

Wagar said in the pacific northwest, the state broadband offices are becoming more active and they “want to give the money away,” if you come with a viable plan.

The session was moderated by Drew Clark, Drew Clark, Editor and Publisher of Broadband Breakfast and Of Counsel to The CommLaw Group.

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Managing Editor Ahmad Hathout has spent the last half-decade reporting on the Canadian telecommunications and media industries for leading publications. He started the scoop-driven news site downup.io to make Canadian telecom news more accessible and digestible. Follow him on Twitter @ackmet.

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Funding

Sen. Ted Cruz Warns of Potential Waste in BEAD Allocations

The conservative critic of the broadband program highlighted inaccurate FCC mapping data in a report.

Published

6 days ago

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September 15, 2023

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Photo of Senator Ted Cruz, R-Texas, Gage Skidmore

WASHINGTON, September 15, 2023 – Senate Commerce ranking member Ted Cruz, R-Texas, warned in a report on Friday of potential waste in Broadband Equity, Access and Deployment funds.

Part of the Infrastructure, Investment and Jobs Act, the program allocated over $42 billion for expanding broadband infrastructure in areas with poor internet access. That funding was awarded to states in June based on the number of those areas listed in the Federal Communication Commission’s National Broadband Map.

The 20-page report from Cruz’s office highlights how it believes the map is inaccurate, and claims that it disproportionately benefited states with fewer unserved areas – those with no meaningful internet access – than the map shows. It points to Washington, D.C., where the FCC’s map shows a third of the district’s unserved areas within the National Zoo, and notes the high allocation per unserved map location.

D.C. received fewer BEAD funds than any state – just over the minimum benchmark of $100 million set out in the program – but its small size and dense population gave it over $540,000 per location, opposed to the national median of $5,600.

The broadband map is also considered by some state broadband offices to be inaccurate. The commission has released an updated version since the allocation of BEAD funds based on challenges to its coverage data and is requiring states to accept local challenges before awarding any grants with BEAD funds.

Cruz also noted in the report that some areas slated to be served by other federal funding programs are marked as unserved in the FCC map. Funds under the Rural Digital Opportunity Fund, Capital Projects Fund, and ReConnect Program have been awarded for providers to build infrastructure in areas that are still currently unserved, meaning BEAD funds were allocated based in part on areas that will receive broadband anyway.

The report calculated 85,000 of the 3 million unserved areas slated to be served by BEAD will already have been given service by another federal program.

The report also criticized BEAD’s preference for fiber infrastructure, saying alternative means of providing internet like satellite and fixed wireless could serve hard-to-reach areas for less money.

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Funding

Broadband Breakfast Webcast of BEAD Implementation Summit Available for $35

Space is extremely limited for the in-person event; Zoom in instead with the Broadband Breakfast community.

Published

1 week ago

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September 11, 2023

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WASHINGTON, September 11, 2023 – The Broadband Breakfast community is pleased to announced that those outside of Washington will be able to participate remotely in the BEAD Implementation Summit on Thursday, September 21, via a live webcast.

Participation in the webcast, via a live Zoom webcast, is available for $35. Breakfast and lunch are not included in the live webcast.

However, both in person and live online registrants for the BEAD Implementation Summit will obtain access to the complete videos of the BEAD Implementation Summit, a pathbreaking event tapping into the energy surrounding the $42.5 billion Broadband Equity, Access and Deployment program.

As state broadband offices work to prepare their five-year plans for the BEAD program, this timely event will discuss the challenges, controversies and solutions surrounding this historic push for universal high-speed connectivity.

Evan Feinman, deputy associate administrator for the Broadband Equity, Access and Deployment program, will be the keynote speaker at Summit.

The event, hosted by the Broadband Breakfast community and featuring an in-person and online streaming component, will feature four panels on the most relevant and topical issues regarding BEAD Implementation. Among the panelists who have confirmed include state broadband leaders like North Carolina’s Angie Bailey, New Jersey’s Valarry Bullard, Arkansas’ Glenn Howie, Virginia’s Dr. Tamarah Holmes, Maine’s Andrew Butcher and Illinois’ Matt Schmit.

New panelists and keynote speakers are being added frequently to the program.

The complete program – including both in-person and online registration options – is available at the BEAD Implementation Summit. In-person event registration is available for $245.

“The BEAD Implementation Summit will drill into the particulars of BEAD implementation as states are looking at the largest-to-date federal investment in high-speed internet infrastructure, said Drew Clark, editor and publisher of Broadband Breakfast. 

The event will take place at Clyde’s of Gallery Place at 707 7th Street NW, Washington. 

Register now to hear what federal and state government officials, plus industry and non-profit groups, have to say about the next steps in this historic broadband funding. In addition to discounts on events and access to premium videos, Broadband Breakfast Club members have access to comprehensive monthly exclusive reports that delve into key topics pertaining to Better Broadband, Better Lives.  

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Funding

Treasury Approves $167 Million for Oklahoma Broadband Expansion

The state plans to serve 20,000 locations with 100 * 100 Mbps broadband.

Published

2 weeks ago

on

September 8, 2023

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Photo of Wally Adeyemo, deputy secretary of the treasury

WASHINGTON, September 8, 2023 – The Treasury Department approved on Friday over $167 million for broadband infrastructure in Oklahoma.

The money will fund the Oklahoma Broadband Infrastructure Grants Program, a state effort to subsidize broadband projects in areas that are expensive to serve because of low population density or geographic obstacles.

The state estimates that 20,000 locations will be served with OBIG-funded projects, about 13 percent of the areas lacking broadband in the state. 

Projects supported by the fund will be required to deliver speeds of 100 Mbps upload and download. That’s faster than the FCC’s broadband benchmark of 25/3 Mbps.

The money comes from the $10 billion Capital Projects Fund, established with the American Rescue Plan Act in response to the Coronavirus pandemic. The fund provides money for projects that enable work, education, and health monitoring.

More than $8 billion in CPF funds have now been awarded. Many states, territories, and tribal governments are using the money to finance broadband development projects.

Some state officials say the CPF is better suited to reach high cost areas because of its “sliding scale” model. States can provide matching funds for up to 95% of project costs with CPF money, compared to 7% under the Broadband Equity, Access and Deployment program.

Providers that build CPF-funded projects are required to participate in the Federal Communications Commission’s Affordable Connectivity Program, a monthly internet subsidy for low-income households. It provides $30 a month to most recipients and $75 per month to residents of Tribal lands.

The $14 billion ACP is set to dry up in 2024. It is unclear whether Congress will renew it.

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