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Funding

Treasury Feels Obligated to Inform Federal Agencies about Capital Projects Fund Projects Locations

Department of Treasury is working to provide guidance for providers on how to grow their business.

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Photo of the Treasury Department building in Washington.

WASHINGTON, March 16, 2023 – The Treasury Department is focusing on keeping afloat other federal agencies about completed broadband builds using its Capital Projects Fund to ensure federal money is not wasted, according to the program’s director on Wednesday.

Joseph Wender said on a Fiber for Breakfast web event that the department requires recipients of money from the fund to provide the coordinates of “every location that’s been served.

“Because we do feel an obligation to our federal partners, particularly the [Federal Communications Commission] and the [National Telecommunications and Information Administration] to ensure that our federally funded locations are fit into the larger map,” Wender added.

“We need to have a global awareness of where all of our funds are,” he added. “That is a reporting requirement that we take very seriously.”

The FCC released its first version of the broadband map in November and subsequently opened up a second round of data collection on January 3.

Since then there have been challenges sent to the agency on the accuracy of the map, including where areas are reported to have builds but don’t.

The map will be used by the NTIA’s Broadband Equity, Access and Deployment program to deliver $42.5 billion to the states by June 30.

Industry associations and experts have requested that the FCC map add more information, including up-to-date information on where other federal and state funds are being allocated.

In January, experts agreed at an event that the federal funds should be better tracked in order to maximize its benefits.

“Money goes out from the government in broadband stimulus, but we don’t track where it’s going very well,” said Sarah Oh Lam, senior fellow at the Technology Policy Institute, a federal funded research and development center. “We really don’t know outcomes…and I don’t see many efforts in mandating that we collect data from this [stimulus] round from the grantees that receive money.

Funding

Treasury Department and Local Officials Tout American Rescue Plan Funds

Federal funding program prepares communities for economic turmoil.

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Photo of Jacob Leibenluft of the U.S. Department of the Treasury

WASHINGTON, March 23, 2023 – American Rescue Plan Act funds sets the United States ahead in economic resiliency, said experts at a Brookings Institution event Thursday. 

When ARPA was passed in March of 2021, the United States Department of the Treasury was tasked with ensuring that funds would be used to build sustainable programs past the 2026 expenditure deadline as well as programs that would build capacity for future government programs, said Jacob Leibenluft of the Treasury.  

At the onset of the COVID-19 pandemic, states did not have the systems in place to reach people in need of help, said Leibenluft. ARPA funds help communities invest in a strong system to provide support to community members, which sets the United States ahead of where it would have been otherwise, he said, claiming that the funds will help the country weather upcoming economic turmoil. 

To take advantage of this opportunity, Leibenluft suggested that localities develop and share best practices. The most effective way to use ARPA funds is to develop the “plumbing” that connects citizens to government programs which localities can then maintain on their own budgets, he said. 

“There are certain things that are just not sustainable in the absence of ARPA funds,” he continued, “what we have built is really a demonstration of programs that can be sustained through a combination of local, state and federal funds.” 

Local governments need to view ARPA as one-time spending, added Tishara Jones, mayor of Saint Louis, Missouri. Saint Louis did not develop any ARPA-reliant programs that would extend beyond the 2026 expenditure deadline. Instead, the city is finding revenue in its existing budget for supporting new programs on its own. 

Even so, state officials suggest that the Treasury’s 2026 expenditure deadline is too soon, claiming that not all funds necessary for broadband infrastructure upgrades will be received by that time.  

The American Rescue Plan gave $1.9 trillion for direct financial assistance, education support, health programs, transportation, and state and local fiscal recovery. An estimated 10% of funds are being used to build infrastructure, including broadband deployment, according to Brookings. The program’s allocation phase is set to be complete by the end of 2024.  

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Expert Opinion

David Strauss: How Will State Broadband Offices Score BEAD Applications?

Fiber, coax and fixed wireless network plans dependent on BEAD funding demand scrutiny.

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The author of this Expert Opinion is David Strauss, Principal and Co-Founder of Broadband Success Partners.

Given the vital ways in which access to broadband enables America, adequate Internet for all is a necessary and overdue undertaking.  To help close the digital divide, the Infrastructure Investment and Jobs Act includes $42.5 billion in Broadband Equity, Access and Deployment funding for the last mile. Add to this the estimated level of subgrantee matching funds and the total last mile figure rises to $64 billon, according to the BEAD Funding Allocation and Project Award Framework from ACA Connects and Cartesian.

The federal funds will be disbursed by the Department of Commerce’s National Telecommunications and Information Administration to the State Broadband Offices who will then award subgrants to service providers. On June 30, each state will find out their allocation amount. By 2024, the states will establish a competitive subgrantee process to start selecting applicants and distributing funds.

A critical element of the selection process is the methodology for scoring the technical merits of each subgrantee and their proposal. Specific assessment criteria to be used by each state are not yet set. However, the subgrantee’s network must be built to meet these key performance and technical requirements:

  • Speeds of at least 100 Megabits per second (Mbps) download and 20 Mbps upload
  • Latency low enough for “reasonably foreseeable, real-time interactive applications”
  • No more than 48 hours of outage a year
  • Regular conduit access points for fiber projects
  • Begin providing service within four years of subgrant date

What level of scrutiny will each state apply in evaluating the technical merits of the applicants and their plans?

Based on our conversations with a number of state broadband leaders, the answers could be as varied as the number of states. For example, some states intend to rigorously judge each applicant’s technical capability, network design and project readiness. In contrast, another state believes that a deep upfront assessment is not needed because the service provider will not receive funds until certain operational milestones are met. Upon completion, an audit of the network’s performance could be implemented.

We, at Broadband Success Partners, are a bit biased about the level of technical scrutiny we think the states should apply. Having assessed over 50 operating and planned networks for private sector clients, we appreciate the importance of a thorough technical assessment. Our network analyses, management interviews and physical inspections have yielded a valuable number of dos and don’ts. By category, below are some of the critical issues we’ve identified.

Network Planning & Design

  • Inadequate architecture, lacking needed redundancy
  • Insufficient network as-built diagrams and documentation
  • Limited available fiber with many segments lacking spares

Network Construction

  • Unprotected, single leased circuit connecting cities to network backbone
  • Limited daisy-chained bandwidth paths on backhaul network
  • Lack of aerial slack storage, increasing repair time and complexity

Network Management & Performance

  • Significant optical ground wire plant, increasing potential maintenance cost
  • Internet circuit nearing capacity
  • Insufficient IPv4 address inventory for planned growth

Equipment

  • Obsolete passive optical network equipment
  • Risky use of indoor optical network terminals in outdoor enclosures
  • Sloppy, untraceable wiring

Technical Service / Network Operations Center

  • Technical staff too lean
  • High labor rate for fiber placement
  • Insufficient NOC functionality

While the problems we uncover do not always raise to the level of a red flag, it happens often enough to justify this exercise. Our clients who invest their own capital in these networks certainly think so. The same should hold true for networks funded with taxpayer money. Fiber, coax and fixed wireless network plans dependent on BEAD funding demand serious scrutiny.

David Strauss is a Principal and Co-founder of Broadband Success Partners, the leading broadband consulting firm focused exclusively on network evaluation and technical due diligence. 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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Funding

‘Buy America’ Waivers Possible, But Very Difficult to Obtain, Says NTIA Chief

The bar ‘is not impossibly high, but it is high,’ Alan Davidson said.

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Photo of Alan Davidson on Wednesday by Drew Clark

WASHINGTON, March 16, 2023 – The bipartisan infrastructure law is a broadband connectivity program as well as “an opportunity for us to be promoting U.S. jobs and promoting manufacturing capability,” said the head of the federal agency charged with implementation.

Although “there will be instances” where “Buy America” rules will be waived, “we will be looking very carefully for where” such waivers are allowed, said Alan Davidson, head of the Commerce Department’s National Telecommunications and Information Administration.

Speaking at a Verizon-hosted event here on Wednesday, Davidson cited President Biden’s inclusion of reference to the Buy America regulations in the State of the Union Address on February 7, a marquee forum signaling the importance of the rules to the administration.

“The bar has been set high: Not impossibly high, but it is high,” Davidson said.

Read the Broadband Breakfast special report: What to Know About Build America, Buy America Provisions in the Bipartisan Infrastructure Law. The report is available for Breakfast Club members.

In a statement by NTIA on February 9, two days after the State of the Union, the agency said that broadband projects funded from its $42.5 billion Broadband Equity, Access and Deployment program will “have time” to get “made in America” products

There is widespread concern, raised during in a Broadband Breakfast event on February 8 and in other forums, that the electronic components in fiber-optic equipment are simply not available from American-made manufacturers. The fiber cables themselves, by contrast, are increasingly being manufactured in America.

President Biden, Davidson continued, “fully expects that we will source all of our materials and all of our work in the U.S. Fiber-optic cables are a good example of this.” He cited fiber manufacturer Corning as an example of announcing a new manufacturing facility in Arizona.

“We are hoping and expecting other announcements like that in the near future,” he said.

‘A startup in government’

In a conversation with Kathleen Grillo, Verizon’s senior vice president of public policy, Davidson said that $1.7 billion had already been awarded to state broadband offices, who are working to prepare broadband plans as part of the Infrastructure Investment and Jobs Act’s $42.5 billion BEAD program.

He highlighted the significance of the June 30, 2023, deadline by which the agency will announce funding awards to states.

“Some states are very sophisticated; others are just standing up their broadband offices now,” he said.

Asked to define the missions and values that NTIA is bringing to its broadband implementation, Davidson cited excellence, integrity and kindness.

The program, he said, “is like a startup in government.”

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