WASHINGTON, May 11, 2022 – A Treasury Department program that is bringing capital to disadvantaged communities is helping drive key money into broadband infrastructure builds in rural America, some of those recipient institutions said at an event Tuesday.
The department provides grants to and certifies institutions such as banks, credit unions, loan funds, microloan funds, or venture capital providers as Community Development Financial Institutions that provide financial services in low-income communities and to people who don’t have access to financing, according to the government website.
The program is also helping build much-needed broadband connectivity, as seen in rural Wyoming, where the Midwest Minnesota Community Development Corporation has already utilized CDFI funds to finance a project to run fiber optics networks to rural Wyoming.
“We believe that there’s capital available for rural broadband,” Gary Franke, managing director of the communications group at CoBank, said at the Local Initiative Support Corporation event on Tuesday.
LISC is an intermediary non-profit that connects public and private resources with underinvested places. CoBank, however, is not a CDFI.
Such deals “typically will involve partnerships with state, local, or federal programs in addition to private equity,” he said.
Suzanne Anarde, CEO at Rural Community Assistance Corporation, a CDFI, said Tuesday that CDFIs must “find out what our individual niche is and how we can build capacity that makes us viable.”
Brian Vo, chief investment officer at Connect Humanity said that his organization could work with CDFIs in the future to fund their holistic approach to digital equity.
LISC alleges that the large national financial institutions are not interested in making investments to improve rural broadband expansion across the country. The organization states on its web site that “rural broadband is lacking in many areas because the large national providers are not interested in making the investment.”
“We see a lot of opportunity out there. With the right capital and the right funding programs, there’s a lot more to come,” Franke said.
There are currently more than 1,200 CDFI funds operating across the nation, many of which are now focusing on crossing the digital divide by providing funds for rural broadband infrastructure.
Local Governments Provide Valuable Information for Rural Infrastructure Builds
Rural communities vary in broadband needs, making community engagement essential for breaching the digital divide.
WASHINGTON, May 11, 2022 – A critical first step to delivering on the Infrastructure Investment and Jobs Act for rural communities at a local level is community engagement and understanding, panelists said at a Tuesday event of the Local Initiative Support Corporation.
As a local leader in a rural community “the first thing to do is a community survey,” said Josh Seidemann, vice president of policy at NTCA – The Rural Broadband Association.
Seidemann and other panelists provided advice on what local communities need to do to be successful in applications under the IIJA. The process is expected to kick off upon release of rules from the Commerce Department’s National Telecommunications and Information Administration. The agency must release rules under the IIJA by May 16.
A community survey will help “determine and evaluate where your community needs broadband the most,” said Seidemann. Such a survey is “going to inform and illuminate the type of network that will best meet your needs.”
Community needs can vary due to topography and existing infrastructure available for use. “Make sure your network meets your community needs,” added Bob Knight, CEO of public relations agency Harrison Edwards and a local government official in Connecticut. He is co-chair of Fiber Broadband Association’s public officials group. “The best projects have an element of community engagement.”
Jerry Kuthy, Program Officer at Cameron Foundation, urged local leaders to create a mapping system of their individual geographical broadband needs.
The Virginia Department of Housing and Community Development launched an interactive broadband coverage map in April of 2022. Kuthy said the map will help local leaders in Virginia roll out funding for rural broadband infrastructure.
Mapping areas of focus for broadband projects has long been the focus for state and regional leaders, in part because so many people have expressed disappointment at previous FCC broadband mapping efforts.
LISC is an intermediary non-profit that connects public and private resources with underinvested places. The role of Community Development Financial Institutions was also discussed at the event.
Universal Service Fund in Need of Reform, Said Panelist at Broadband Community Summit Event
The Universal Service Fund’s base is shrinking.
HOUSTON, May 3, 2022 – As funding for the Universal Service Fund continues to fall year over year, the Federal Communications Commission is evaluating options to reform it.
During Broadband Communities Summit 2022, Principal Consultant for Mattey Consulting LLC, Carol Mattey anticipated what kind of changes to the Universal Service Fund that stakeholders could expect in the coming years.
The Universal Service Fund is responsible for funding several high-profile financial benefits including the Rural Digital Opportunity Fund, the Connect America Fund, E-Rate, the Lifeline Program, and the Rural Healthcare Program.
The USF is funded through compulsory service provider contributions. Though those contributions have historically been based on providers’ interstate and international telecommunications service revenues, critics of the program argue that providers are increasingly able to dodge these contributions by reclassifying their sources of revenue.
A common misconception for dwindling contributions is cord cutting, Mattey said. As more people drop landlines, there is simply less voice revenue – but that is only part of the issue.
Mattey said that while information revenues have increased through consumer use of the internet, voice revenues have fallen. This disparity has caused the telecommunication contribution to skyrocket and could be nearly 30 percent in 2022.
Mattey explained that most companies simply bill their consumers to offset that amount, and as a result, the contribution has been disproportionately burdened by the elderly who are more likely to use landlines.
When addressing potential reforms, Mattey pointed to three most likely possibilities being considered: broadband internet access revenue, a flat fee per voice and broadband connection, and a flat fee per phone number.
“Any reform needs to be simple and must be able to be audited,” she said. “The current system is not equitable.”
FCC Greenlights $200 Million More in Latest Rural Digital Opportunity Fund Round
It’s the ninth wave of funding confirmations, bringing the total amount to more than $5.2 billion to three million locations.
WASHINGTON, May 3, 2022 – The Federal Communications Commission announced Tuesday it has approved $200 million to be distributed from the $9.2-billion Rural Digital Opportunity Fund, which will go to fund broadband expansion to over 230,000 locations in 26 states.
The announcement marks the ninth wave of funding confirmations, bringing the total amount confirmed to over $5.2 billion to three million locations in 47 states and the northern Mariana islands.
Since last year, the agency has embarked on investigating which winners from the reverse auction process would be covering areas that didn’t need the money. The investigation emerged after reports that money to some of the winners, who were announced under a previous administration in December 2020, would go to areas that already had adequate connectivity.
“We need to connect everyone, everywhere, and today’s announcement will open new opportunities to serve communities that need high-speed, reliable broadband service,” FCC Chairwoman Jessica Rosenworcel said in a Tuesday press release. “We’re also working hard to make the best use of this funding to ensure that applicants meet their obligations and follow our rules. With proper oversight, this program can advance our goal of closing the digital divide.”
The FCC announced Tuesday that more defaulted bids were submitted, bringing to approximately 5,000 the total number of census blocks that bidders are now not going to pursue.
The commission had previously sent letters to 197 applicants about coverage areas with existing service asking them if they wanted to revoke their bids, with a number of companies having done so on the grounds that previous FCC maps on which their bids were based did not show areas that already had existing infrastructure. The FCC is currently working on improved maps that will instruct the distribution of billions of dollars in broadband infrastructure.
In January, the commission had also established the Rural Broadband Accountability Plan, which adds audit and verification measures to monitor compliance with programs including RDOF.
Details about the states covered are available on the FCC’s Auction 904 website.
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