- The Infrastructure Investment and Jobs Act would provide $65 billion to upgrade US broadband coverage.
- Rural broadband providers using both fiber and wireless technology have an opportunity to expand in unserved and underserved rural areas.
- The Act only provides funding for construction, not maintenance for operations.
While the COVID-19 pandemic remains a public health and economic concern, companies are adapting and adjusting, finding new and better ways to do business moving forward. Womble Bond Dickinson is taking a comprehensive look at this new Opportunity Economy from a wide range of viewpoints. For example, Womble Bond Dickinson attorney Carri Bennet explored how the Infrastructure Investment and Jobs Act will greatly benefit broadband expansion, particularly to underserved rural areas. She recently spoke to Womble Bond Dickinson attorney Mark Henriques on an episode of the “In-house Roundhouse” podcast, and the article below is based on that conversation.
Infrastructure in the 21st Century encompasses more than roads, bridges and dams. The Opportunity Economy depends on a vast network of fiber, cable, spectrum, towers and equipment that provide a stable, speedy internet connection that future proofs these wired and wireless networks.
The Infrastructure Investment and Jobs Act currently before Congress not only addresses traditional infrastructure needs, but if approved in its current form, would provide $65 billion to provide ubiquitous nationwide broadband coverage.
Womble Bond Dickinson attorney Carri Bennet works closely with rural broadband carriers who are on the front lines of providing high-speed internet coverage to America’s most remote regions using both fiber and wireless technologies. While the details of the Act are yet to be finalized, Bennet said the Infrastructure Investment and Jobs Act is a potential game-changer that stands to greatly benefit not only rural residents, but the nation’s overall economic competitiveness.
The Infrastructure Investment and Jobs Act on Paper
The key number is $65 billion—that is how much the Infrastructure Investment and Jobs Act allocates to upgrade broadband coverage. The money will be sent to states (approximately $100 million per state initially, plus $100 million split among US territories), who will decide how to distribute the funds via a grant process guided by NTIA. The proposal is similar to broadband funding provided under the American Recovery Act under the Obama Administration which was also administered by NTIA, but with the twist of letting the states control who is awarded the funding with NTIA providing oversight. States could potentially receive up to an additional $100 million annually for the eight years of the program depending on how much broadband coverage is needed.
States could potentially receive up to an additional $100 million annually for the eight years of the program depending on how much broadband coverage is needed.
Broadband providers will have to invest their own money in the form of at least a 25 percent match in order to access the grant funds. As Bennet said, “It will be incumbent upon the companies to work with the states and show that they can provide the matching funds. It isn’t completely free money,” although there will be limited waivers of the matching fund requirement for the most difficult-to-reach areas. Those who are willing to kick in more than 25% probably stand a better shot at getting the funding.
For purposes of broadband funding, “unserved areas” are defined as those with less than 25 download or 3 upload megabits per second. “Underserved areas” are those with less than 100 download or 20 upload megabits per second. Priority for grants will be given to high-poverty areas, and applicants also will be judged based on the broadband speed they can provided and the expediency with which they can complete the project.
The landmark infrastructure bill also includes the Digital Equity Act, which would provide an additional $1.5 billion (over a five-year period) for digital literacy. The money would fund programs that increase the ability of individuals and communities to access and use the internet by training people in online skills.
“We take it for granted, but there are a lot of people who don’t know how to use the internet,” particularly poor and elderly people,” Bennet said. “To participate in the digital economy, you have to be able to go online and use the internet.” Having devices to access the internet is also important and the digital equity money covers the cost of devices.
The Infrastructure Investment and Jobs Act passed the divided Senate with perhaps a surprising amount of bipartisan support. The act now heads to the Democratic-majority House of Representatives, where Bennet expects it to eventually pass.
Finally, the Infrastructure Investment and Jobs Act includes an additional $1 billion for “middle mile” broadband infrastructure projects—those that do not connect to an end user—and $14.2 billion to the Affordable Connectivity Program (formerly the Emergency Broadband Benefit Program). This program helps schools and libraries provide remote services and began in response to the COVID-19 pandemic.
How Will the Act Impact Broadband Expansion?
Broadband expansion under the Infrastructure Investment and Jobs Act is scheduled to be an eight-year project. But Bennet said the real timetable for true broadband equity is an even longer-term project.
“Broadband is not a thing you can just do immediately, especially if you have to lay fiber,” she said. For example, broadband infrastructure projects will need to be coordinated with road-building projects.
“Eight years is a nice goal, but we’re probably going to be working on this for a long time. The good news is that this is going to create a lot of jobs and opportunity and once it is done, it’s going to be amazing,” Bennet said. In our ever expanding digital economy, broadband is a quintessential necessity.
“Eight years is a nice goal, but we’re probably going to be working on this for a long time. The good news is that this is going to create a lot of jobs and opportunity and once it is done, it’s going to be amazing."
And if the timetable is one aspect still in question, broadband industry officials also want greater clarity around operations and maintenance funding for the broadband expansion. The act only provides funding for construction, not ongoing operation and maintenance.
The federal Universal Service Fund currently provides $10 billion a year to subsidize broadband operation and maintenance costs. But with the number of networks expected to quadruple under this round of broadband expansion, the Universal Service Fund will need to also increase. Phone customers pay into the fund as part of their monthly phone bills, but with rising costs and fewer landline users, the funding mechanism is broken and needs to be retooled, Bennet said. Big tech companies, which reap the benefits of widespread consumer broadband access, may be asked to contribute to the fund. Bennet expects the FCC to take this up once the permanent Chair is named and there are five commissioners in place.
Winners and Opportunities in Wireless Broadband Expansion
Bennet said the large, national broadband providers may receive some funding, “But I see this opportunity being more for the infrastructure players, like the tower builders. The rural carriers and coops that have built infrastructure have the opportunity to expand their footprint. But I think we’re going to see a lot of new players, because there’s a lot of rural America where telephone and broadband cooperatives don’t exist. It’s going to take a lot of creativity because there’s a reason nobody has gone there – it’s not lucrative.”
She said small wireless internet service providers (WISPs) have a real opportunity to grow under the Infrastructure Investment and Jobs Act. These small businesses already are working to bridge the digital divide by providing service to underserved and unserved areas, and the funding provided by the act will aid in that mission.
However, Bennet said current market challenges—including some supply shortages and a tight market for construction labor—could be issues, particularly in the short term.
Companies interested in accessing the broadband expansion funds should pay close attention to coverage maps to ensure that the areas they seek to cover are classified as underserved or unserved.
“You’ll get cut out of the process if you don’t challenge mapping inaccuracies,” she said.
But while the process won’t be easy or quick, Bennet said the prospects for broadband expansion to hard-to-serve areas holds great promise. Economically challenged areas will have new opportunities to attract business with the deployment of high-speed broadband. Many companies and workers may be attracted to rural areas due to the lower costs of living, once they are able to be fully connected to high-speed broadband.
“Everything is going to be connected somehow, in some way, to the internet,” Bennet said. “It just goes to show you that broadband is the lifeblood of the new economy. We saw that during the pandemic. We’ve just got to get everyone connected to it.”