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The Infrastructure, Investment and Jobs Act

State and local governments have a lot of work to look forward to in the next few years -- especially after the House approved President Biden’s $1.2 trillion infrastructure spending legislation, the Infrastructure, Investment and Jobs Act

The massive package includes $65 billion for broadband deployment and digital inclusion initiatives. This current effort differs from another major communications overhaul in 1996 because this one also authorizes funds. This means that grantees don’t have to wait for Congress’ annual, separate budgeting process. 

The legislation’s goal is to make sure no-one’s left out in our information-driven society. To this end, it is tasking the Commerce Department’s National Telecommunications and Information Administration (NTIA) with disbursing the money. The Senate voted in January 2022 to confirm President Biden pick Alan Davidson to lead the division. 

This funding supplements the tens of billions that Congress already appropriated for broadband in the Consolidated Appropriations Act of 2021 and the American Rescue Plan

Those pots of money were meant to finally establish universal broadband access and affordability. Grant applicants will notice that the NTIA and the Treasury Department’s guidelines for applicants encapsulate these goals (see below.)

 

The Big Picture: As longtime telecom analyst and Brookings Senior Fellow Blair Levin pointed out earlier this year, the IIJA addresses four important elements that have previously stalled broadband’s rollout:

-- It funds the capital expenditures to build the infrastructure
-- Provides subsidies to low-income Americans
-- Orders the Federal Communications Commission to come up with ideas on how to reform the way the nation subsidizes universal broadband access through the Universal Service Fund. They must do this within nine months of the law’s enactment. 
-- It provides money for digital literacy programs so that the intended recipients understand how to best use broadband in order to participate in our digital economy.

The IIJA doesn’t specify what kinds of technology that states should deploy, but some states like California have already committed to using fiber optic networks because they’re deemed to be “future proof.” In addition, many telecommunications analysts say that publicly-funded fiber optic networks that allow multiple commercial service providers to compete to provide services is a more sustainable and consumer-friendly business model in the long run.   

The IIJA gives the NTIA specific formulas by which to dole out the funds. Specifically, states must submit five-year plans to be approved by the agency. Grantees would apply for project funds from the state. All states at this point have some central office and point person to co-ordinate all the projects.

For its part, the federal legislation establishes a couple of standards for “broadband” through the definitions of “unserved” and “underserved.”

Unserved” locations are those that, according to soon-to-be updated federal broadband maps, can be served with broadband. But these “unserved” locations have no access to broadband at all, or access only to services with internet service speeds of less than 25 Megabits per second (Mbps) download and 3 Mbps upload. Additionally, “unserved” locations doesn’t have access to broadband with latency rates that support “real-time, interactive applications.” 

Meanwhile “underserved” means serviceable areas in which  at least 80 percent of the area includes service with at speeds between 25 Mbps and 100 Mbps for download -- and between 3 Mbps and 100 Mbps for upload. 

The legislation also targets areas designated as “high cost and “anchor institutions.” 

The Federal Communications Commission currently defines “broadband” as speeds of at least 25 Mbps for downloads and 3 Mbps for uploads, although that standard has been widely criticized and could be changed in the future by a Democratic-controlled FCC. 

The law establishes: 

The Broadband Equity, Access, and Deployment Program: $42.5 billion

Timeline: The NTIA has six months after the law’s passage to invite states to apply for this grants from this program. The agency does this by issuing a“Notices of Funding Opportunities” (NOFO). States must indicate whether they intend to participate. NTIA must establish standards for the states by which to evaluate grantees and subgrantees’ capabilities.  

How much: States, including the District of Columbia and Puerto Rico, will get at least $100 million each, with the rest distributed according to the ratio of state’s unserved locations to all unserved locations nationwide. The law also stipulates that $100 million will be divided equally the American Samoa, the Commonwealth of the Northern Mariana Islands, Guam and the Virgin Islands. 

How fast, and deployment to whom: Grant projects must provide speeds of at least 100 Mbps x 20 Mbps. Other criteria, such as whether an area constitutes one whose inhabitants live with “persistent poverty” also affect the priority status of grant applicants. Applicants should make sure to carefully look at the language within the legislation to look at other prioritization criteria that’s laid out for the NTIA. 

What else? The legislation also allows states to use the money for data collection, broadband mapping, and planning. And they can also use the funding to bring low-cost broadband or Wi-Fi to qualifying multi-family apartments. 
 

States also have to explain its long-term objectives for broadband and how its deployments are expected to close the digital divide and promote economic growth. The proposals must outline steps to support local and regional broadband planning efforts, among other things. And they must outline how the states will competitively award subgrants in a timely fashion. 
 

Notably, states drawing from this pot of money may not exclude cooperatives, local governments from eligibility, nonprofits, public-private partnerships, private companies, public or private utilities. At the same time, no particular type of entity gets a preference over another. 
 

However, incumbent Internet Service Providers (ISPs) can challenge whether an area is valid to be serviced. But the NTIA can quash them.  
 

Any recipients of the funds must also comply with minimal quality of service requirements and cybersecurity and supply chain risk management standards as defined by the NTIA. And they can’t use any “untrusted” equipment made in China. 
 

Furthermore, broadband consultant Doug Dawson notes on his blog:
 

  • Grant applications must provide at least a 25 percent matching for the cost of the project. Matching funds can include CAREs funding and ARPA funding. Matching can also come from state grants.
  • Deployed technology must only meet two 9’s reliability, meaning that a network can be out for two days per year and still be considered adequate
  • Grants must cover every home in a grant coverage area within four years of receiving the grant.
  • Grant recipients must provide at least one low-cost broadband option for eligible households. The NTIA is expressly forbidden to regulate rates in any manner. (It's up to the NTIA to determine what "low-cost" means.)
  • Interestingly, any fiber built along highways must include access points at regular and short intervals. This money is not for middle-mile fiber.
  • Grant recipients must carry out public awareness programs in grant areas extolling the benefits of better broadband.
  • Grant recipients must file semiannual reports tracking the effectiveness of the grant funding.

The Affordable Connectivity Program: $14.2 billion.

This is a permanent version of the Emergency Broadband Benefit, which was created by the Consolidated Appropriations Act. The Affordable Connectivity Program reduces the federal benefit applicable to a broadband subscription to a maximum of $30 a month but extends it to include households within 200 percent of the poverty line from 135 percent. ISPs that receive grant money must inform customers of the existence of this program and establish a complaint line. They must also allow public access to these complaints about the service. 

Digital Inclusion Initiatives: $2.75 billion.

The NTIA will run programs to help communities to learn how to take advantage of Internet connections. 
 

More than 30 million households don’t subscribe to broadband even when it’s available and about a third of households without a fixed broadband connection have incomes below $20,000, according to ACA Connects, America’s Communications Association. 
 

Prior efforts to push broadband adoption failed because of a mix of factors that include affordability and lack of knowledge of how to make full use of the connections. This aims to address the last problem. The program allots $250 million a year to a competitive grant program for five years. Sixty million dollars is for state planning grants and $1.44 billion is for state implementation grants.

Tribal Connectivity Program: $2 billion.

United States Department of Agriculture (USDA)’s ReConnect Loan and Grant Program: $2 billion.

This is an already established $600 million loan and grant program to deploy broadband to rural areas that is getting a turbo-boost.

 

Who: Municipalities, rural electric co-ops, utilities and private internet companies may all apply for ReConnect funding. The USDA offers a map and datasets to show which areas are eligible for funding. 
 

Chad Parker, the Rural Utilities Service assistant administrator for telecommunications policy, has previously said that projects funded through this initiative must serve communities with fewer than 20,000 people who have no broadband service or whose service is slower than 10 mbps x1 mbps. 
 

“Approved projects must create access speeds of at least 25 Mbps download and 3 Mbps upload,” Parker said. Priority will be awarded for projects that propose to deliver higher-capacity connections to rural homes, businesses and farms.
 

The Institute for Self-Reliance (ISLR) has a great profile of Madison County, one ReConnect recipient in upstate New York. 

Middle Mile Infrastructure: $1 billion.

The IIJA tasks the NTIA with creating a grant program to expand access to middle mile infrastructure.

This is designed to connect unserved anchor institutions such as libraries and make last mile buildouts cheaper and easier. Broadly, a "middle mile" network refers to the connection between a local, "last-mile" network to the customer and a backbone highway of the internet.

You can find a more specific definition of the term in Section 60401 of the IIJA.

Timeline: Grantees must complete buildout within five years.

Private Activity Bonds: $600 million will finance private activity bonds in public-private broadband partnerships.

The IIJA allows states and local governments to issue municipal bonds to finance “qualified” broadband projects. The goal here is to lower the costs of financing rural projects. 
 

“Based off the Rural Broadband Financing Flexibility Act (S.1676), a Hassan-Capito proposal, this provision allows states to issue PABs to finance broadband deployment, specifically for projects in rural areas where a majority of households do not have access to broadband,” according to an analysis from the National Conference of State Legislatures.   
 

In addition to these buckets of money under IIJA, several other recently-passed laws provide additional funding for broadband.

THE AMERICAN RESCUE PLAN, enacted March 11, 2021 created:

The Coronavirus State and Local Fiscal Recovery Fund

Who & how much: $350 billion in emergency funding for localities: 

  • $195 billion for states
  • $130 billion for local governments
  • $20 billion for tribal governments
  • $4.5 billion for territories.

What: The money was directed at broadband, sewer and water infrastructure. 

Rulemaking agency: Treasury. See U.S. Treasury Interim Final Rules. Here is a page from the National Conference on State Legislatures of the broadband provisions of the rules and a subsequent FAQ. The Institute for Local Self-Reliance also has a guide on the FAQ.

Timeline: Treasury portal is open for counties to register and request recovery funds

  • May, 2021: Treasury started disbursing the money from this fund
  • January 31, 2022: Deadline for counties to submit first Quarterly Project and Expenditure Report.
  • December 31, 2024: Funds must be incurred and obligated
  • December 31, 2026: Funds must be expended to cover obligations and all work must be completed
     

Also see the ISLR’s running Big List of American Rescue Plan Community Broadband Projects for planned projects (state by state) using this stream of funding. 

The Coronavirus Capital Projects Fund

Who and how much: States, territories and tribal areas. $10 billion. 

What: “The American Rescue Plan provides $10 billion for payments to eligible governments to carry out critical capital projects that directly enable work, education, and health monitoring, including remote options, in response to the public health emergency,” according to the Treasury Department’s funding portal.

What's unique to the program: Treasury released new guidelines for applicants early November. See this Broadband Breakfast story for more details. But "what's unique about this program is the focus on determining where affordability is a barrier to broadband adoption and an emphasis on the importance of providing 100 Mbps symmetrical speeds," as Jericho Casper of ISLR reports. 

Applicants must also survey proposed covered communities to determine what "affordable" means to local communities. And there are requirements regarding investment in digital skills training, how to bolster workforce training and development. Treasury will also prioritize investments in infrastructure owned or co-owned by local municipalities, non-profits and co-operatives where serving the community and not profit maximization is the prime goal.

The Treasury Department’s Capital Project’s Fund page has more detailed information, as well as links to Webinars with guidance.  

Timeline: States, territories and tribal governments will have through December 24, 2021 to apply for grants.

Emergency Connectivity Fund

Who & how much: $7.17 billion for schools and libraries for Internet services and related equipment for remote learning. These institutions had to have been eligible for either the FCC’s Erate program, or eligible for support under the Library Services and Technology Act that governs tribal libraries. 

What: Congress appropriated this money to enable all school children to attend school or complete their homework remotely in the short term. Eligible equipment: Wi-Fi hotspots, modems, routers, devices that combine a modem and router, and connected devices (laptop and tablet computers.) Schools and libraries were also allowed to use the money for commercially available broadband service.

Rulemaking agency: Federal Communications Commission (FCC) 

Timeline: First application filing window closed on August 13, 2021. Second application filing window closed on October 13, 2021. 

CONSOLIDATED APPROPRIATIONS ACT of 2021, enacted December 2020

In addition to establishing the Emergency Broadband Benefit discussed above, the appropriations measure funded three additional programs focused on broadband: the Connecting Minority Communities Pilot Program, the Broadband Infrastructure Program, and the Tribal Broadband Connectivity Program. The latter program was supplemented by an additional $2 billion through the IIJA measure.

Connecting Minority Communities Pilot Program

What: The $268 million to NTIA’s Connecting Minority Communities Pilot Program – grants available to Historically Black Colleges and Universities, Tribal colleges and universities, Minority-serving institutions, and consortiums led by an HBCU, TCU, or MSI, including a minority business enterprise or a nonprofit organization in the surrounding community. 

Eligible equipment includes Wi-Fi hotspots, modems, routers, laptops, tablets, and other Internet-connected devices, including hiring IT personnel, operating a minority business enterprise or a tax-exempt 501(c)(3) organization, and facilitating educational instruction, including remote instruction.

Eligible institutions include 501 Hispanic-serving institutions, 336 Asian American and Native American Pacific Islander-serving institutions, 104 predominantly Black institutions, 102 historically Black colleges and universities, 66 Alaska native-serving institutions and native Hawaiian-serving institutions, 37 Tribal colleges and universities, and 32 native American-serving non-Tribal institutions.

Rulemaking agency: NTIA and official Program Overview Webpage.

Timeline: The current deadline for applications is December 1, 2021. See Notice of Funding Opportunity (NOFO) for resources from NTIA.

Broadband Infrastructure Program

What: This $288 million program grants available to partnerships between states, local jurisdictions, and ISPs to expand fixed broadband service in unserved areas. 
 

Rulemaking agency: NTIA and official Program Overview Webpage


Timeline: The initial application filing window closed on August 17, 2021, with this NOFO. Providers had the opportunity to challenge projects in particular areas by October 19, 2021.

Tribal Broadband Connectivity Program

What: For this program, $980 million was made available for grants available to Tribal governments and organizations to improve broadband infrastructure.


Rulemaking agency: NTIA and official Program Overview Webpage


Timeline: The initial application filing window on the first program under the appropriate act closed on September 1, 2021, under this NOFO. Additional funding was made available under the IIJA program, and the dates for that have not yet been determined.