COVID-19 pandemic exposed “digital divide” requiring targeted broadband funding.
Majority of funding to be disbursed by Department of Commerce.
FCC’s Emergency Broadband Benefit to be converted to permanent program.

On November 15, 2021, President Biden signed into law the Infrastructure Investment and Jobs Act (IIJA), a $1.2 trillion package of funding for infrastructure projects addressing key “physical” needs, such as roads, bridges, electric vehicles, water plant upgrades and broadband. While broadband has not usually been seen as a “physical” infrastructure requiring federal funding alongside roads and bridges, the COVID-19 pandemic exposed the critical need for rapid expansion of broadband services to areas with limited or no broadband service, i.e., the “digital divide.” The 2021 Consolidated Appropriations Act provided initial funding for several broadband-funding programs, but the demand for these programs easily outstripped the allocated funds.

To that end, the IIJA included $65 billion in funding for several broadband programs. A majority of the funding decisions in connection with the IIJA’s new programs will be administered by the National Telecommunications and Information Administration (NTIA) within the Department of Commerce. Specifically, NTIA will be tasked with establishing the following programs to distribute:

  • $42 Billion—Broadband Equity, Access, and Deployment Program—Each state is allocated at least $100 million for broadband service for underserved and unserved areas. Additional funding will be based on a five-year plan submitted by the states to NTIA, and the public must be offered at least 100 Mbps downstream and 20 Mbps upstream service, with at least one low-cost service plan for subscribers. The original program was allocated $288 million in January 2021, and NTIA received more than $2.5 billion in funding requests.
  • $2.75 Billion—State Digital Equity Capacity Grant Program: Two grant programs administered by NTIA, in concert with a state agency named by that state’s governor, to encourage the adoption of broadband service in underserved areas.
  • $2 Billion—Tribal Broadband Connectivity Program: Provides additional funding to the NTIA program established in January 2021. The original program was allocated $1 billion in funding, but received more than $5 billion in funding requests. These funds are intended to be used for broadband infrastructure deployment, broadband affordability programs, distance learning, telehealth, digital inclusion efforts, and broadband adoption activities on Tribal lands.
  • $1 Billion Middle Mile Grant Program—NTIA was directed to establish the competitive funding program for building out the portion of the broadband infrastructure that connects carriers but does not provide service directly to consumers. Under this program, telecommunications companies and public utilities will be required to fund at least 30 percent of the total cost of the project and complete construction within five years of receiving the funds.

Lest the FCC feel left out of the funding frenzy, the IIJA tasked the FCC with converting the $3.2 billion Emergency Broadband Benefit into a permanent program, the Affordable Connectivity Program. Congress allocated $14.2 billion in funding for the Affordable Connectivity Program, and it will require the FCC to convert current participants in the Emergency Broadband Benefit program by March 2022.

Under this program, participating broadband service providers will receive $30 per month for each eligible customer ordering broadband service or equipment. Additional funding up to $100 will be available to providers that sell connected devices (laptops, desktop or tablet computers) for no less than $10 and no more than $50 to eligible customers. Those customers that are currently participating in the FCC’s Lifeline program do not need to reapply for the new Affordable Connectivity Program; they simply can opt into a plan offered by their broadband service provider.

Several of these programs have tight implementation deadlines. Complicating this, the determination of unserved and underserved consumers in the NTIA programs will be based on broadband availability maps that have yet to be finalized by the FCC. Current estimates are that the FCC maps will not be ready for use until 2nd quarter of 2022 at the earliest.

In the meantime, we can expect to see substantial activity at the state level to establish state broadband offices to help coordinate these funding programs. An analysis completed earlier this year showed that three states had state broadband agencies, with the vast majority relying on task forces or offices within the government to address broadband deployment. Given this wide variety of approaches to deal with broadband deployment at the state level, telecommunications companies and public utilities seeking to take advantage of these new funding opportunities should immediately start planning for the funding programs to be rolled out in the very near future.

These and any accompanying materials are not legal advice, are not a complete summary of the subject matter, and are subject to the terms of use found at: https://www.pillsburylaw.com/en/terms-of-use.html. We recommend that you obtain separate legal advice.