States risk leaving broadband money on the table

State legislators often joke about “waiting for Washington” to pass laws, distribute funds or approve permits – an age-old tradition in the halls of state governments. But today, when it comes to expanding access to broadband service, the federal government is waiting for the states.

Experts estimate that providing every American with affordable high-speed internet access — a need highlighted by the COVID-19 pandemic — will cost $80 billion or more. Yet more than a year after Congress passed the American Rescue Plan Act (ARPA), only 24 states have confirmed their intention to use billions of federal dollars provided through the Capital Projects Fund (CPF) of the law for the expansion of broadband.

States can actually use resources from two ARPA funds for broadband and related expenses, and while they can use CPF funds for other capital projects, the Treasury Department has designated broadband affordable and reliable as a “key priority” of the fund and has made hundreds of millions of dollars available to states for this purpose right now. But much of it is unused.

States must complete a planning process with the Treasury by September 24 before they can receive their full share of the roughly $10 billion CPF has dedicated to bridging the digital divide, but they can immediately access up to 5% of their allowances. And these cash advances can be applied to expenses related to the planning process, such as data collection and community engagement.

So what stands in the way of the large-scale deployment of these CPF resources? Among other things, state legislatures are choosing not to use the CPF for broadband because they are waiting for other potentially larger federal funds that could be months away rather than seizing this important opportunity now.

In particular, the Infrastructure Investment and Jobs Act (IIJA) provides about $65 billion for broadband and digital equity, including about $42.5 billion through the program. Broadband, Equity, Access, and Deployment (BEAD), which states will be responsible for administering. However, the IIJA requires that the Department of Commerce and the Federal Communications Commission work together to improve the quality of data on broadband access and use, develop a dispute process to promote fairness in the process of grants and create a funding formula before any funds can be disbursed. . As a result, it will be months before states know their final allocations, and they will have to wait even longer to receive the first round of funds.

Time is not the only reason states should not wait for IIJA funding to become available, or even the most important. While the amount of funding available through the IIJA is historic, it will not be enough to provide universal connectivity. The combined impact of years of modest broadband policy goals, limited government oversight, and underinvestment in networks has left our country with a costly problem to solve, and states should seek to use every dollar they can.

In addition, the CPF’s final spending guidance gives states flexibility that the IIJA does not. CPF defines unserved households as those without access to wireline at speeds of 100 megabits per second (Mbps) for downloads and 20 Mbps (expressed as 100/20 Mbps) for uploads and requires that projects funded infrastructure provides 100/100 Mbps speeds or is scalable to these speeds in the future. In contrast, the IIJA’s narrower definition of unserved households – those with access to speeds below 25/3 Mbps – and its requirement that states connect all unserved households before expanding their efforts means that IIJA-funded projects will have to cut communities finely to reach only eligible areas. Besides. The IIJA’s definition of unserved is likely to exclude many densely populated areas, such as city blocks or neighborhoods; suburb; and rural population centers. The likely outcome for states is a map that ends up looking like Swiss cheese and an approach to broadband expansion that is inefficient for ISPs, for communities, and for the use of public funds.

For all these reasons, the CPF is an asset for States. The 100/20 Mbps wired connection requirement broadens the range of eligible households, presents an opportunity to improve connection quality – for example, moving from wireless connections to fiber – and avoids the Swiss cheese problem and could yield better results for providers and communities, especially densely populated ones. And given both the funding needs of the IIJA and the fact that these funds may not be sufficient to achieve universal access, using the CPF now will allow states to connect more residents to broadband. affordable and reliable and to do it faster.

But legislatures must act to reclaim their funds from the CPF for broadband. They should allow their broadband offices immediate access to the 5% administrative funds to hire staff and take the necessary steps to ensure the effective use of public funds. And as states appropriate federal funds, they will also need to ensure that they develop policies that reflect best practices for state broadband programs and align with federal law and funding requirements. Failure to do so will result in a delay in the distribution of funds.

Technically, states have until 2024 to appropriate CPF funds. But with more than a dozen state legislatures already out of session for 2022 and some not even meeting this year, states that have not yet elected to use CPF for broadband should seek to do so. in 2023. What they choose is up to them. But while they debate, millions of Americans still don’t have access to high-speed, reliable and affordable internet. And it will take years to connect all those homes to broadband. With billions on the table today, the choice should be clear.

Kathryn de Wit leads The Pew Charitable Trusts Broadband Access Initiative.

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