Broadband Funding in the Infrastructure Act: What Does It Provide and How Do Companies Qualify For It?

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In 1936, during the throes of the Great Depression, the federal government launched the Rural Electrification Act to provide electricity to the people living outside of cities and towns. While 90% of homes in urban and nonfarm rural areas had electricity, only 10% of farms did.  That “electricity gap” was largely closed by 1960, even with the delays caused by World War II. 

In 2021, with the COVID-19 pandemic still a threat, the federal government approved a similarly ambitious plan to expand broadband to the nation’s underserved and unserved areas. The $65 billion broadband expansion allocation is part of the overall $1.2 trillion Infrastructure Investment and Jobs Act (H.R. 3684), which President Biden signed into law in mid-November.

The Infrastructure Act represents a monumental investment in America’s broadband infrastructure, which is a key component of 21st century economic preparedness. With the massive amount of funds appropriated over various broadband-related programs, there will be numerous opportunities for communications providers and their infrastructure vendors to capitalize on these opportunities.  Implementation of these broadband programs will likely begin mid-2022 and will require an increase in the number of skilled workers capable of fiber and wireless broadband deployment, which, in turn, could greatly benefit community colleges and technical schools who have programs in place to train the necessary workforce.

This broadband plan also presents opportunities for construction industry businesses, particularly those serving fiber and tower infrastructure needs. One key unanswered question is whether current supply chain problems will complicate or slow the massive expansion of broadband infrastructure spelled out in the Infrastructure Act. Steel, fiber, semiconductors and other electronic components are already in high demand and snarled in supply chain issues. 

What is in the Broadband Plan?

The bulk of the broadband funding will go towards a $42.45 billion competitive grant program administered through the states (in the form of designated “Eligible Entities”) for qualifying infrastructure, mapping, and adoption projects, dubbed the Broadband Equity, Access, and Deployment Program.  The plan also includes:

  • $14.2 billion to extend the FCC’s Emergency Broadband Benefit (EBB) Program, now referred to as the Affordable Connectivity Program. This program provides a subsidy for low-income broadband users.
  • $2.75 billion for digital equity programs, including digital skills training and online accessibility of social services for individuals with disabilities. 
  • $1 billion in funding for middle mile projects
  • Money for the USDA Rural Utilities Service ReConnect and broadband loans programs, the Tribal Connectivity Program and grants to improve cybersecurity. 

The Broadband Equity, Access, and Deployment Program will allocate a minimum of $100 million to each state as well as the District of Columbia and Puerto Rico, plus $25 million to each to the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands (a total of $5.3 billion).

After the FCC releases the first broadband map required by the Broadband DATA Act, 10 percent of the total allocation of funds ($4.45 billion) will be allocated for unserved locations in high-cost areas. The map is expected to be developed in 2022. The FCC defines unserved locations” as locations where available broadband speeds are less than 25/3 Mbps and “high-cost areas” as where the cost of deploying broadband service is greater than the cost of building out broadband service on average in unserved areas.

The bulk of the funding ($32.7 billion) is also to be allocated after the Broadband DATA map is made public.  It is to be allocated on the basis of each Eligible Entity’s pro rata share of unserved locations nationally.

What Types of Projects will be Available?

It is important to keep in mind that the Broadband Equity, Access, and Deployment Program (and the Infrastructure Act in general) is a long-term investment, not a short-term expenditure. Actual work on these projects probably won’t begin until late 2022 at the earliest. States and territories first must draft and submit their plans for using the broadband funds—and that will take some time.

But once those plans are approved, companies will be able to bid for the following types of work:

  1. Unserved service projects and underserved service projects. Unserved areas are those with either no access to broadband service or access to broadband speeds less than 25/3 Mbps, while underserved locations are those with broadband speeds of less than 100/20 Mbps.
  2. Connecting eligible community anchor institutions, such as libraries, schools and hospitals;
  3. Data collection, broadband mapping, and planning;
  4. Installing internet and Wi-Fi infrastructure; and
  5. Providing reduced cost broadband to multi-family residential buildings.

What are the Requirements for Contractors?

In carrying out eligible projects with grant funds, companies must: 

  1. Adhere to the quality-of-service standards to be established by the NTIA; 
  2. Comply with prudent cybersecurity and supply chain risk management practices; 
  3. Incorporate best practices for ensuring reliability and resilience of broadband infrastructure; and 
  4. Refrain from purchasing communications equipment or services from certain Chinese companies that have been flagged by federal authorities as national security threats.

In awarding subgrants, states and territories must prioritize unserved service projects, then underserved service projects and finally projects that connect eligible community anchor institutions. States and territories may not exclude cooperatives, nonprofit organizations, public-private partnerships, private companies, public or private utilities, public utility districts, or local governments from eligibility for grant funds.  

Entities that receive subgrants will be required to meet established deployment and performance targets and will be subject to oversight, including regular, detailed reports on the work being done and the performance of these projects.

Click here to read a more detailed report on broadband infrastructure opportunities in the Infrastructure Act.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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