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Infrastructure Investment and Jobs Act Will Close Digital Divide if States Are Prepared, Says Alan Davidson

Money coming from the IIJA must be flexible and include extensive private contributions, Davidson said at Broadband Breakfast event.

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WASHINGTON, April 14, 2022 — The head of the Commerce Department agency responsible for more than $43 billion in federal broadband infrastructure funding said that the Biden administration wouldn’t be satisfied until every American had access to low-cost and broadband internet at 100 Megabits per second (Mbps) download and 20 Mpbs upload.

Speaking at a Broadband Breakfast Club event on Wednesday, National Telecommunications and Information Administration chief Alan Davidson said that in order to truly eliminate the digital divide, state engagement and leadership was necessary to maximize federal funding.

Money coming down from the from the NTIA through the Infrastructure Investment and Jobs Act must be flexible, including extensive private contributions to projects.

Photo of Alan Davidson and Drew Clark (right) at Broadband Breakfast for Lunch on Wednesday by Megan Boswell

“We expect there will be flexibility,” Davidson said about how much private communications companies and state funding should go toward projects. “The statute gives them that flexibility. It’s not a one-size-fits-all at all,”

The IIJA – which gives the NTIA $42.5 billion to distribute among states – requires network operators to match at least 25 percent of project costs funded by the Commerce agency’s Broadband Equity, Access, and Deployment program. But states could require more than a 25 percent match, Davidson said.

“There are a lot of folks out there that – if you just give them little bit more support – would be willing to do that next deployment,” Davidson said. A lot of the funding won in the Rural Digital Opportunity Fund auction will go to companies that committed to covering at least 50% of project costs, he noted.

“We’ve been talking about closing the digital divide in this country for over twenty years,” he said, recommending states “reach out” to the NTIA for guidance.

“When this project is done, everyone in America will have access to high-speed, affordable broadband” said Davidson, referring specifically to the 100 Mbps x 20 Mbps definition of high-speed broadband in IIJA.

Davidson also said that “there’s a need for political leadership to be engaging [and] to understand the importance of [the IIJA].

“One of the biggest areas that we’re investing in is in the folks we’re going to be working with in the states,” he said. “The broadband offices in the states are going to be the key front line for a lot of this work.”

The NTIA requested comments on the IIJA, with the due date being February 4. It is planning on requesting additional comments later on for the State Digital Equity Capacity Grant Program and the Digital Equity Competitive Grant Program.

See the questions for Alan Davidson at the Broadband.Money community

Wednesday, April 13, 2022, 12 Noon ET — Preparing for Infrastructure Investment and Jobs Act: A Fireside Chat

Join the broadband grants community in welcoming special guest Alan Davidson, head of the National Telecommunications and Information Administration.

Broadband Breakfast’s Drew Clark will host Alan for a fireside chat. Broadband.money will also preview its platform for broadband grant application research, development, reporting and compliance. Hear Alan’s vision for the $42.5 billion Broadband Equity, Access and Deployment program, as well as $1 billion for middle mile funding, $3 billion tribal funding programs, and the interaction of BEAD and the Affordable Connectivity Program. Get his perspective on important matters, such as:

  • What does success look like?
  • What is the timeline from here?
  • Will states view the 25% match requirement as a ceiling, or a floor?
  • How should local governments, providers, and infrastructure builders – public and private – prepare while waiting on maps and state plans?

And more. If you have questions for Alan in advance of the event, please post them in the Broadband.Money community. We’ll try our best to get them into the discussion.

REGISTER TO ATTEND IN PERSON

Guests for this Broadband Breakfast for Lunch session:

  • Alan Davidson, Assistant Secretary of Commerce for Communications and Information and NTIA Administrator
  • Drew Clark (host), Editor and Publisher, Broadband Breakfast

Alan Davidson is an Internet policy expert with over 20 years of experience as an executive, public interest advocate, technologist, and attorney. He was most recently a Senior Advisor at the Mozilla Foundation, a global nonprofit that promotes openness, innovation, and participation on the Internet. He was previously Mozilla’s Vice President of Global Policy, Trust and Security, where he led public policy and privacy teams promoting an open Internet and a healthy web. Alan served in the Obama-Biden Administration as the first Director of Digital Economy at the U.S. Department of Commerce. He started Google’s public policy office in Washington, D.C., leading government relations and policy in North and South America for seven years until 2012. Alan has been a long-time leader in the Internet nonprofit community, serving as Director of New America’s Open Technology Institute where he worked to promote equitable broadband access and adoption. As Associate Director of the Center for Democracy and Technology, Alan was an advocate for civil liberties and human rights online in some of the earliest Internet policy debates. Alan currently resides with his family in Chevy Chase, Maryland. He is a graduate of the Massachusetts Institute of Technology and the Yale Law School, and is a member of the District of Columbia Bar.

Drew Clark is the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney. Drew brings experts and practitioners together to advance the benefits provided by broadband. Under the American Recovery and Reinvestment Act of 2009, he served as head of a State Broadband Initiative, the Partnership for a Connected Illinois. He is also the President of the Rural Telecommunications Congress.

This Broadband Breakfast for Lunch event is co-hosted with:

Photo by Commuter Benefits used with permission

The Infrastructure Investment and Jobs Act provides a number of program that, all told, provide $65 billion for broadband infrastructure investment. A part of the bipartisan infrastructure bill that passed 69-30 last year, the measure has the promise of promoting an “infrastructure decade” for the United States, President Joe Biden said in his State of the Union Address. We are excited that National Telecommunications and Information Administration chief Alan Davidson, the Assistant Secretary of Commerce, has accepted our invitation to speak about the Infrastructure Investment and Jobs Act. In this second session of this Broadband Breakfast for Lunch series, Broadband Breakfast and Broadband.Money will explore what the federal government, states and infrastructure builders – public and private – should be doing to prepare for the Broadband Equity, Access and Deployment grant program.

WATCH HERE, or on YouTubeTwitter and Facebook.

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

Broadband's Impact

Dianne Crocker: Recession Fears Have Real Estate Market Forecasters Hitting the Reset Button

Growing fears of recession trigger pullback on previous rosy forecasts.

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The author of this Expert Opinion is Dianne Crocker, Principal Analyst for LightBox

The lyrics to “Same As It Ever Was” by the Talking Heads certainly don’t apply to how 2022 is playing out in the commercial real estate market. Two quarters of negative economic growth has put a damper on market sentiment and triggered fears that the U.S. economy is heading for a recession. By midyear, market analysts were taking a good, hard look at their rosy forecasts from the start of the New Year and redrawing the lines.

Once upon a time…

At the start of 2022, forecasters were bullishly predicting that commercial real estate investment and lending levels would be nearly as good as 2021. This was significant, considering that 2021 set new records for deal-making and lending volume as the debt and equity capital amassed during the pandemic while looking for a home in U.S. commercial real estate.

What a difference a few quarters have made. Virtually, all the predictions that started the New Year were obsolete by mid-summer. The abrupt shift in market conditions is palpable and surprised just about everyone. Now, markets are reaching an inflection point that is in sharp contrast with the strong rebound of last year.

The two I’s: Inflation and interest rates

At the core of the recent upset in market sentiment is the persistence of high inflation, which seems to be ignoring all attempts by the Federal Reserve to raise interest rates and bring prices down. Higher inflation is having a ripple effect throughout the economy, pushing up the costs of construction materials, energy, and consumer goods. Among the notable economic indicators showing stress at mid-year was the GDP, which fell for the second consecutive quarter, and the Consumer Price Index, which jumped 9.1% year-over-year in June – the highest increase in about four decades.

In July, the CPI fell to 8.5%, an encouraging sign that inflation was beginning to stabilize. By the latest August report from LightBox, however, hopes were dashed when the CPI showed little improvement, holding firm at a still high of 8.3%.

The market is responding to a higher cost of capital as lenders tap the brakes. As the cost of capital rises with each interest rate hike and concerns of a recession intensify, many large U.S. financial institutions are pulling back on their loan originations for the rest of 2022 and into 2023. This change in tenor is a significant shift, given that 2021 was a record-breaking year for commercial real estate lending. Many lenders have already shifted to a more defensive underwriting position as they look to mitigate risks.

The Mortgage Bankers Association, which had previously predicted that lending levels in 2022 would break the $1 trillion mark for the first time revised their forecast downward in mid-July. By year-end, the MBA now expects volume to be a significant 18% below 2021 levels—and one-third lower than the bullish forecast made in February. Now, investment activity is cooling as higher borrowing costs drive some buyers from the market.

In the investment world, transactions were down by 29% at midyear due to a thinning buyer pool as higher rates impact access to debt capital. Market volatility is causing investors, lenders, and owners to rethink strategies, reconsider assumptions, and prepare for possible disruption.

Looking ahead to year-end and 2023

The rapid and diverse shifts in the market make for an uncertain forecast and certainly a more cautious investment environment. The battle between inflation and interest rates will continue over the near term. As LightBox’s investor, lender, valuation, and environmental due diligence clients move toward the 4th quarter—typically the busiest quarter of the year–unprecedented volatility is driving them to recalibrate and reforecast given recent market developments.

Continued softness in transaction volume is likely to continue as rates and valuations establish a new equilibrium. If property prices begin to level out, there will be more pressure on buyers to consider how to improve a property to get their return on investment. The next chapter of the commercial real estate market will be defined by how long inflation sticks around, how high interest rates go, and whether the economy slips into a recession (and how deeply). The greatest areas of opportunity will be found in asset classes like office and retail that are evolving away from traditional uses and morphing to meet the needs of today’s market. Until barometers stabilize, it’s important to rethink assumptions, watch developments, and recalibrate as necessary.

Dianne Crocker is the Principal Analyst for LightBox, delivering strategic analytics, best practices in risk management, market intelligence reports, educational seminars, and customized research for stakeholders in commercial real estate deals. She is a highly respected expert on commercial real estate market trends. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Digital Inclusion

White House Presses Outreach Initiatives for Affordable Connectivity Program

White House officials urged schools and other local institutions to engage in text-message and social media campaigns for the ACP.

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Photo of President Joe Biden, obtained from Wikimedia.

WASHINGTON, September 15, 2022 – The White House on Monday urged schools and other local institutions to engage in text-message and social media campaigns, PSAs, and other community-outreach initiatives to promote enrollment in the Federal Communications Commission’s Affordable Connectivity Program among of families with school-age children.

The Affordable Connectivity Program subsidizes internet service bill for low-income households. Monthly discounts of up to $30 are available for non-tribal enrollees, $75 for applicants on qualifying tribal lands. In addition, the ACP offers enrollees a one-time discount $100 on qualifying device purchases.

To boost ACP enrollment, speakers encouraged schools to reach out directly to families. Bharat Ramanurti, deputy director of the National Economic Council, said text-message campaigns drive up enrollment in government programs. A Massachusetts text-message campaign doubled ACP enrollment rates in subsequent days, said Ramanurti.

Also highlighted was the administration’s “ACP Consumer Outreach Kit,” which provides partners with resources, including fliers, posters, audio PSAs, social-media templates.

In fact, many of these tactics have proved effective in increasing ACP enrollment among telehealth patients. In addition, Microsoft and Communications Workers of America recently announced a circuit of ACP sign-up drives in that will tour several states including Michigan, New York, and North Carolina.

Political considerations as November nears…

As students go back to school and midterm elections loom, new ACP sign-ups could benefit the enrollees as well as the Democrats’ political chances.

Public officials and private experts alike recognize the value of community involvement in extending broadband connectivity and digital literacy nationwide. Marshaling community institutions – like schools – to maximize broadband access could help Biden and other Democrats overcome inflation-driven electoral headwinds in the November midterms. The White House obtained commitments from 20 providers to offer high-speed internet plans for $30 per month or less to ACP-eligible households – this means no out-of-pocket costs for recipients of ACP discounts. Free broadband coverage could bring the administration – and all Democrat candidates, by extension – back into the good graces of low-income families.

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Digital Inclusion

Federal Government Must Collect More Granular Data on Minorities to Aid in Initiatives

Discussion on the “data gap” comes as the nation tries to connect the unserved and underserved.

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Screenshot of Denice Ross, the White House's chief data scientist

WASHINGTON, August 31, 2022 – In order to serve the needs of all Americans, the federal government must gather and act on more granular data on underrepresented minority groups that have been historically overlooked in the data-gathering process, said Denice Ross, the White House’s chief data scientist.

Ross argued at an online event hosted by the Center for Data Innovation on Tuesday that many minority groups – including African Americans, Native Americans, the disabled, and the LGBT community – are disadvantaged by the “data divide,” a term which refers to disparities in the amount and quality of available data on various groups.

Ross was citing a report issued earlier this year by the Equitable Data Working Group, a task force created by President Joe Biden earlier this year, which said policymakers are often unable to perceive or ameliorate problems facing minority communities if data on those communities are unavailable or insufficiently disaggregated. Disaggregated data, the report says, is “data that can be broken down and analyzed by race, ethnicity, gender, disability, income, veteran status, age, or other key demographic variables.”

The report recommends a federal data collection strategy that safeguards privacy and facilitates analysis of “the interconnectedness of identities and experiences,” or how individuals’ various minority-group identities compound the societal disadvantages they face. The report also advocates the creation of “incentives and pathways” promoting minority representation in the data collection process.

The recommendations come as the broadband industry and federal agencies try to improve knowledge of where there are unserved and underserved areas for broadband connectivity and to take action to improve digital literacy. The Illinois Broadband Lab and other state broadband offices, for example, implement a community-up approach to data gathering. Direct community involvement provides data insights that help states deliver coverage to in-need communities, officials say. 

In the panel discussion that followed Ross’s opening remarks, experts and academics agreed that community outreach is a necessary step in closing the data divide. Dominique Harrison, director of bank Citi Ventures’ Racial Equity Design and Data Initiative, said that some in the African American community view data collection with skepticism.  

Christopher Wood, executive director of LGBT Tech, argued that the passage of a federal privacy standard is a critical step toward establishing trust in government data collection. The most recent attempt to pass a national privacy regime, the American Data Privacy and Protection Act, was approved by the House Committee on Energy and Commerce last month.

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