Localities Should Take Advantage of Grant Programs Before Application Deadlines Close

California has launched a new $6 billion Broadband Program to fund broadband internet access service (BIAS) infrastructure in response to the demonstrated need for broadband access connections exposed by the COVID-19 pandemic. The details, summarized below, include funds designated for middle-mile broadband infrastructure and broadband last-mile support and establishment of a loan loss reserve. This state program is in addition to federal broadband funding. If Congressional action is completed on the Invest in America Act (H.R. 3684), even more broadband funding could become available to communities across the country.

Middle-Mile Broadband
The California Broadband Program provides for the construction of a state-owned, open-access middle-mile broadband network. Allocated $3.25 billion, this project will be overseen by the Office of Broadband and Digital Literacy within the Department of Technology. While a third-party administrator will manage the construction and operation of the network, the California Public Utilities Commission (CPUC) is tasked with identifying locations for the broadband infrastructure, specifically prioritizing:

• locations that enable last-mile connections to residences unserved by 25 mbps downstream and three mbps upstream;
• communities with no known middle-mile infrastructure that is open access with sufficient capacity at affordable rates;
• entities that lack sufficient high-bandwidth connections, including anchor institutions; and
• state highway rights-of-way, focusing on a geographically diverse group of projects in rural and urban areas to achieve the greatest reductions in the amount of households whose BIAS is below federal and state standards.

The CPUC is required to solicit public comments on commercial sources of supply of middle-mild broadband network services (i.e., locations, routes, availability, technical performance characteristics) as well as various design, technical, business, and operational considerations that would increase the attractiveness and usefulness of the state-wide open-access middle-mile broadband network for commercial internet service providers (i.e., network design, regeneration points, interconnection points and tie-ins). The CPUC is currently accepting comments until September 3, 2021 as part of proceeding number R.20-09-001. More information can be found in the Assigned Commissioner’s Second Amended Scoping Memo and Ruling.

At this point, several ambiguities surround the middle-mile broadband network. The meaning of “geographically diverse group of projects” is not clear, or what the policies, standards and network management practices developed by the Office of Broadband and Digital Literacy will entail. Further, it is not clear what “technical advice” from entities (including wireless providers) will be relied upon during the comment period.

Last-Mile Broadband
Additionally, the California Broadband Program dedicates $2 billion for the construction of broadband last-mile infrastructure. Under an amendment to the existing Broadband Infrastructure Grant Account program, rural and urban areas will be allocated $1 billion each for last-mile broadband projects. The CPUC will first allocate $5 million in base funding for last-mile projects in each rural and urban county. After that, any remaining money will be allocated based on each rural and urban county’s proportionate share of the California households without BIAS with at least 100 mbps download speeds.

While applicants may apply for money allocated for last-mile broadband projects until June 30, 2023, there is not yet guidance on the procedures for applicants to do so.

Loan Loss Reserve
The California Broadband Program also establishes a Broadband Loan Loss Reserve in the State Treasury.

• This includes $750 million dedicated to assisting local governments and nonprofits in financing broadband service projects.
• It is contemplated that funds will be continuously appropriated to the PUC to fund costs related to the financing of the deployment of broadband infrastructure.

Moving Forward
The timing of grant issuance is also unclear. The CPUC has not yet established eligibility requirements or financing criteria for the loan-loss fund. BB&K will continue to monitor and provide updates.

In addition to the funds discussed above, billions of federal dollars are available for various broadband-related projects throughout the country. The push to improve and expand broadband access continues to heat up, and it is important for localities to take advantage of grant programs and other funding sources available to them before application deadlines close. If you have questions about your eligibility for certain broadband funding opportunities or related application deadlines, please contact a BB&K attorney.

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