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New Treasury Rules on Broadband Funding Give Local Governments Flexibility on Spending

The rules will give Capital Projects Fund applicants authority to decide what’s ‘affordable, reliable, and unserved.’

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Treasury Department Senior Broadband Policy Advisor Jeffrey Sural

November 4, 2021 – The U.S. Department of Treasury, tasked with writing the rules on how state and local governments can spend various federal relief funds made available for broadband expansion by the American Rescue Plan, recently released the guidelines [pdf] governing the Capital Projects Fund, a $10 billion pot of money available to states, territories, and Tribal governments [pdf] to confront the need for improved Internet connectivity exposed during the pandemic.

Compared to when Treasury released rules governing the State and Local Fiscal Recovery Funds earlier this year, this go ‘round brought cheers instead of jeers from community broadband advocates, as we are seeing federal broadband policy break new ground.

The flexibility the Capital Projects Fund gives state and local governments to decide how to spend the relief funds is what broadband advocates are most excited about. CPF applicants are able to use the money in creative ways to respond to critical needs in their community laid bare by the Covid-19 pandemic, as long as the resulting project directly enables remote work, education, and health monitoring.

The Treasury’s guidance for CPF [pdf] takes a holistic approach, as it not only invests in deploying broadband infrastructure, it directly addresses affordability and digital literacy, which are barriers to broadband adoption long-overlooked by federal broadband programs. In addition, the new rules include language to ensure that projects that use CPF funds take local needs into consideration, including requirements to survey communities to determine what exactly is an “affordable” price point for monthly Internet service, requirements to simultaneously invest in infrastructure and digital skills training, and requirements to consider how projects can bolster workforce training and development.

The CPF rules give applicants clear authority to decide what is deemed to be “affordable, reliable, and unserved” in their respective communities. The program also expands the definition of “unserved” to take into account whether Internet service in a region is affordable. If existing high-speed Internet service in a community is found to not be affordable, that will now be considered sufficient to declare that particular area as being “unserved.”

Other gems contained in the guidelines include: a new emphasis put on funding scalable fiber optic infrastructure, elevating investment in historically disadvantaged communities, and prioritizing investment in infrastructure owned or co-owned by local municipalities, nonprofits, and cooperatives — “providers with less pressure to generate profits and with a commitment to serving entire communities,” states the Treasury guidelines [pdf].

Turning the page on federal broadband programs

Unique to this program is the focus on determining where affordability is a barrier to broadband adoption and an emphasis on the importance of providing 100 Megabits per second symmetrical speeds, reports CTC Technology & Energy.

CPF guidelines direct applicants to incorporate plans to address affordability into their project proposals in new ways. Recipients of the funding are required to report pricing data as part of an ongoing effort to monitor costs to subscribers. The guidelines require recipients of CPF funding to participate in federal broadband subsidy programs, such as the current Emergency Broadband Benefit program, or subsequent federal programs that subsidize the cost of monthly Internet access. Furthermore, recipients are encouraged to “include at least one low-cost option offered at speeds that are sufficient for a household with multiple users to simultaneously telework and engage in remote learning.”

Additionally, under the new CPF rules, Treasury requires eligible projects to go beyond delivering connection speeds the federal government has required in the past, stressing the importance of funding projects that will deliver 100 Mbps symmetrical speeds and encouraging recipients to invest funds in fiber infrastructure where feasible, “as such advanced technology better supports future needs.” The guidelines recognize the need for more robust upload speeds, evident by Treasury’s updated definition of an unserved area — “one that cannot receive affordable, reliable, fixed wireline service of at least 100/20 Mbps.” The guidelines also encourage CPF recipients to prioritize investing in projects that will result in last-mile connections.

Another highlight of the Capital Projects Fund is that the program is designed to help restore a sense of community connectedness in an age of social distancing. To that end, the Treasury’s guidelines place an emphasis on funding applications aiming to construct and connect community education centers, and other anchor institutions, which can tailor initiatives and programs to respond to unique community needs. The CPF guidelines list multiple possibilities applicants constructing multi-purpose community facilities should consider utilizing the funding for, including:

  • career counseling services that provide community members with the knowledge needed to engage in work, including digital literacy training programs
  • activities to acquire knowledge and skills undertaken as part of a person’s participation in school, an academic program, extracurricular program, social-emotional development program for students or youths, internship, or professional development program
  • projects to construct or improve full-service community schools that provide a comprehensive academic program to their students and adult education in the community at large
  • projects that provide health monitoring and a broader range of services including health education classes

To hear more about the potential to use CPF funds to address digital inclusion, listen to Episode 14 of our bonus podcast series, “Why NC Broadband Matters.”

Not Making the Same Mistakes Twice

It’s encouraging to see that the Treasury Department was responsive to fixing what its first round of rules missed. The rules Treasury released in May of 2021 governing aid sent directly to local governments under the Local Fiscal Recovery Fund instructed recipients to focus broadband investments on unserved areas, defined rigidly under that program as areas that do not have 25/3 Mbps service reliably available.

A strict reading of those rules would significantly limit the ability of non-rural communities to invest in needed broadband networks by prioritizing broadband investment only in rural areas. Those rules would essentially leave out more densely populated cities, which are often served by incumbent providers offering speeds above 25/3 Mbps, but who have few affordable and reliable options for Internet service. The previous Treasury rules also did not prioritize funding community broadband networks.

After those rules were released, municipal leaders across the country rallied to call attention to the limiting language governing the Local and State Fiscal Recovery Funds. That led Treasury officials to release a FAQ clarifying and broadening the rules a bit, and helped nudge Treasury officials toward creating the improved guidelines governing the Capital Projects Fund.

Application process now underway

States, territories, freely associated states, and Tribal governments [pdf] are eligible to apply for CPF aid, which will be issued in the form of block grants. Although local governments are ineligible to be direct recipients of these grants, states are encouraged to allocate portions of their award to local governments, nonprofits, and co-ops.

The deadline for states, territories, and freely associated states to submit an application and grant plan through the Treasury Submission Portal is December 27, 2021. For Tribal governments, the application also serves as their grant plan. The deadline for Tribal governments to request funding through the Treasury Submission Portal is June 1, 2022.

Described as a “60-second process” by Senior Broadband Policy Advisor for the U.S. Treasury, Jeffrey Sural, during a recent National Digital Inclusion Alliance webinar, submitting the initial application requires applicants to indicate their desired award amount, summarize how the funds will be allocated, designate an authorized representative or point-of-contact, and sign a grant agreement.

There are multiple eligible uses of CPF funding, but the program’s guidelines categorize acceptable uses of the funds into three main categories: Broadband Infrastructure Projects, Digital Connectivity Technology Projects, and Multi-Purpose Community Facility Projects.

  • Broadband Infrastructure Projects are those which will result in the construction and deployment of broadband infrastructure.
  • Digital Connectivity Technology Projects are projects facilitating the purchase or installation of devices like laptops, desktops and tablets.
  • Multi-Purpose Community Facility Projects are projects to construct community education centers or anchor institutions which provide the public with access to computers with high-speed Internet service.

States will have access to a total of $9.8 billion of the Capital Projects Fund, with $100 million set aside for Tribes, and another $100 million earmarked for freely associated states. Each U.S. state will likely create their own program to suballocate CPF funds to local applicants. The results and impact of the program created by each state will likely vary. See allocations available to each state here.

Editor’s Note: This piece was authored by Jericho Casper, a reporter for the Institute for Local Self Reliance’s Community Broadband Network Initiative. Originally appearing at MuniNetworks.org on November 2, 2021, the piece is republished with permission.

Former Assistant Editor Jericho Casper graduated from the University of Virginia studying media policy. She grew up in Newport News in an area heavily impacted by the digital divide. She has a passion for universal access and a vendetta against anyone who stands in the way of her getting better broadband. She is now Associate Broadband Researcher at the Institute for Local Self Reliance's Community Broadband Network Initiative.

Funding

Sen. Alex Padilla Emphasizes Billions in Broadband Funds for California

California also has 18 projects that are part of the state’s $6-billion broadband investment under its California Comeback Plan.

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Photo of Alex Padilla from June 2019 by Gage Skidmore used with permission

WASHINGTON, December 3, 2021 – Sen. Alex Padilla, the U.S. senator from California appointed to fill the remainder of Vice President Kamala Harris’ term, on Tuesday celebrated a future in which all Californians are connected to broadband.

Padilla, a Democrat, pushed local governments and internet service providers to not only get their fair share of federal broadband funds, but to also “continue to build upon the efforts and experience of truly connecting California families not to just internet connection, but the opportunities and resources that come with it.”

Speaking at a Tuesday event hosted by California Forward and California Emerging Technology Fund, Padilla discussed federal infrastructure funds for California. As part of the Infrastructure Investment and Jobs Act, California is expected to receive around $1 billion in broadband funds for communities.

California’s Broadband Funding

In addition to the 18 statewide broadband deployment efforts announced by governor Gavin Newsom last month, Californians can take advantage of federal funds that will be made available by the National Telecommunications and Information Association.

NTIA Acting Administrator Evelyn Remaley detailed programs from the Infrastructure Investment and Jobs Act for which organizations should apply:

  • $42.5 billion Broadband Access and Deployment Program. This program, the largest of all the programs administered by the NTIA, is distributed among states, US territories, Washington D.C. and Puerto Rico for projects supporting broadband infrastructure deployment and adoption.
  • $1 billion Enabling Broadband Middle Mile Infrastructure Program. This program will be targeted at lowering the cost of unserved and underserved areas to the backbone of the broadband infrastructure.
  • $2 billion added to the Tribal Broadband Connectivity Program. Directs funding to tribal governments for deployment on tribal lands. The program also funds telehealth, distance learning, broadband affordability, and digital inclusion.
  • $2.75 billion Digital Equity Act Programs. Promoting digital equity to ensure that all communities have the same opportunities to obtain the skills and technology necessary to participate in our digital economy.
  • The Digital Equity Act programs includes $16 million for the State Digital Equity Planning Grant Program, $1.44 billion for the State Digital Equity Capacity Grant Program, and $1.25 for the Digital Equity Competitive Grant Program.

These investments build on the NTIA’s Broadband Infrastructure Program, the Tribal Broadband Connectivity Program, and the Connecting Minority Communities Pilot Program (which closed on December 1).

“At the NTIA we are so excited to begin this endeavor to connect every single American to high-speed, affordable broadband,” Remaley said. “Senator Padilla talked about the need, we know it is global, and we are committed to getting this done with all of our partners: our states and communities.”

The California Emerging Technology Fund is a sponsor of Broadband Breakfast.

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Governors Discuss Infrastructure Bill Spending at Summit

Leaders addressed strategies and importance of private spending.

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From left to right: Jane Garvey, Tom Wolf, Lourdes Leon Guerrero, John Bel Edwards, Larry Hogan

ANNAPOLIS, December 2, 2021 – Governors from some states gathered in Annapolis, Maryland, to discuss how they would use the billions in funding coming from the Infrastructure Investment and Jobs Act.

The three-day National Governor’s Association Infrastructure Summit, a large part of which was closed off to media, hosted a panel discussion on Tuesday. The panel included Louisiana Democratic Governor John Bel Edwards, Guam Democratic Governor Lourdes Leon Guerrero, Maryland Republican Governor Larry Hogan, and Pennsylvania Democratic Governor Tom Wolf.

Edwards said that once Louisiana had received money from the infrastructure bill – signed into law in mid-November that would provide a minimum of $100 million to the states – the changes to broadband would be drastic. “We will be able to address [access and the digital divide] to a degree that was not be possible before.

“If there is a home or business [in Louisiana] without high-speed internet by 2029, it is because they do not want it,” Edwards said. He explained that because Louisiana identified the shortcomings in its broadband infrastructure and began laying the groundwork to improve it years ago, the state is more well equipped to take advantage of the funding that will come with the IIJA.

In early 2020, Edwards announced his “Broadband for Everyone in Louisiana” plan that outlined coverage priority areas, the guiding principles, and goals for the state’s approach to improved broadband connectivity. The state broadband office, Connect L.A., was formed to help put the plan into action.

As part of the state’s initiative to bridge the digital divide, Edwards’ administration created Louisiana’s Grant Unserved Municipalities Broadband Opportunities program, or GUMBO, to help underserved and unserved areas apply for federal funding for broadband projects.

Need for private investment

Wolf pointed to actions Pennsylvania is taking to ensure that funds are not squandered. “[The IIJA] is not an infinite amount of money and it is not nearly what our engineers say we need,” he said. To get the most out of the funding they receive, Wolf recommended that states create centralized infrastructure banks to only allocate money to approved projects and avoid both literal and figurative “bridges to nowhere.”

“Private investment is also critically important,” Hogan said. Indeed, all the governors sharing the stage encouraged states to explore public-private efforts. Edwards said he was hopeful that the IIJA would not tie states’ hands, preventing states from utilizing such models. “We need an approach that has the flexibility to work for us,” he said. “I hope the rules are not written in a way that requires us to do all of this ourselves [without private investment].”

The purpose of this gathering is to allow governors, their secretaries, and staff to meet, collaborate, and share their experiences to help states partner for regional infrastructure projects, prioritize projects, and learn to obtain the necessary resources from the federal government to complete said projects.

Hogan presented the opening keynote and participated in some of the first day’s events. Bipartisanship was one of the focal points of the summit, and Hogan hammered on it during his keynote.

“A lot of conventional wisdom was that a federal infrastructure bill could not be in a bipartisan way,” he said. Hogan said that the collaborative work governors did on a state and regional level proved this “wisdom” to be false, stating, “the nation’s governors will continue to lead the way.”

Waiting on the federal government

Hogan said that while the money in the IIJA will be “transformational,” there are still a considerable number of unknowns. “We are still waiting for guidance from the federal government,” he said. As it stands now, he said there is no precise timeline for when the funds will be dispensed or if certain monies will have rigid, unknown requirements that could hold up the process. “The devil is in the details,” said Hogan.

Maryland Governor Larry Hogan

“We will find a way to make use of every penny we receive,” he added, but said it was still unclear how much money the state would get or, where it could be used, and when the state would get it.

Hogan said Maryland’s efforts would be concentrated on repairing and modernizing infrastructure, while also devising new ways to streamline the deployment of future projects.

The NGA summit runs through December 2 and covers topics such as broadband, freight transportation, green infrastructure and supply chain issues.

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President Biden Signs Infrastructure Bill at White House, Touting Better Broadband

President Biden celebrated $65 billion for broadband deployment.

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President Biden signs the Infrastructure Investment and Jobs Act into law on Monday.

WASHINGTON, November 15, 2021 – President Joe Biden signed the Infrastructure Investment and Jobs Act into law, securing $65 billion for broadband deployment.

Biden declared that the Infrastructure Investment and Jobs Act would connect all Americans to the internet.

The legislation includes $65 billion in funding to “make high-speed Internet affordable and available everywhere, everywhere in America — urban suburban, rural — and create jobs laying down those broadband lines,” he said. “No parent should have to sit in a parking lot of a fast food restaurant again just so their child can use the internet to do their homework,” Biden declared. “That’s over.”

Biden said the fundamental need for high-speed internet everywhere in America became clear over the past year. Comparing to internet access to utilities “as essential or water or electricity,” Biden said that remote learning during the pandemic highlighted the urgency for connecting all Americans.

“Is this not a great day to sign a bill?” said Denita Williams, an optical fiber maker in Wilmington, North Carolina who opened the event by highlighting that investments in infrastructure supports workers like her.

“One of the most exciting parts about this bill is the $65 billion upgrade to expand broadband in communities across the country,” she said. “Communities like mine, in rural north Carolina. This is a not just an investment in broadband. This bill will help everyone have access to the internet to teach their children, run their businesses, and help them run their farms.”

Biden also highlighted green energy technologies

The President also highlighted the law’s provisions that would increase the manufacturing and export of clean energy technologies. “It’s going to make it possible for Americans to get off the sidelines and into the game of manufacturing solar panels, wind turbines, batteries to store energy and power for electric vehicles, including electric school buses, which means millions of children will no longer inhale the dangerous diesel fumes at comes out of the buses.”

The cold and wind did not keep President Biden and his top advisors from gathering on the South Lawn of the White House. Governors and mayors from around the country attended. So did many equity advocates, such as Rev. Al Sharpton.

Additionally, more than a dozen Teamsters, journeymen, and other union workers attended the signing.

The crowd was electric. They cheered as Vice President Kamala Harris, Senate Majority Leader Chuck Schumer, D-N.Y., and Speaker of the House Nancy Pelosi delivered their remarks.

They lauded the legislation as “historic” and described it as “once in a generation.” The Democrats at the event promised Americans that the infrastructure bill was only the first step to “build back better.”

“We will keep working with you, Mr. President, to build on today’s success by passing the rest of your ‘Build back Better’ agenda in the weeks ahead, so we can keep our promises to help families achieve the American Dream,” said Schumer, “This is a great day for America.”

“Our work is already underway, and we’re eager to engage with stakeholders in every state, territory, tribe, and community to ensure these programs succeed,” said Evelyn Remaley, acting assistant secretary of commerce for communications and information and the National Telecommunications and Information administrator.”Under the leadership of President Biden and Secretary [Gina] Raimondo, we now have the resources we need to close the digital divide and make America more connected, more competitive, and more equitable than ever before.”

Ben Kahn, a Reporter for Broadband Breakfast, contributed to this report.

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