State Contributions for Broadband

DEEDThe FCC has documented very well the lack of rural broadband. They gave out a tiny handful of ‘experimental’ broadband grants that were supposedly going to be the precursor to a large federal broadband grant program funded by the Universal Service Fund. But as usually happens with these things, politics took over and $9 billion was instead awarded through the CAF II program to the largest telcos to expand rural broadband to a paltry 10 Mbps download and 1 Mbps upload.

And this is a shame because $9 billion could have been used as seed money in matching grants to build a whole lot of last mile broadband. This money could have seeded perhaps $40 billion to $50 billion of fiber in rural areas which would have meant that a lot of areas would get real broadband solutions. What’s probably the saddest is that the CAF II program lasts for six years, so that money is going to be tied up for a long time.

There doesn’t look to be any other move to provide federal funding for fiber, but there are some states that have been looking at the issue. But, as you might imagine, politics comes into play in these efforts as well. There aren’t a whole lot of state programs that are trying to fund fiber, but consider these two that are:

Minnesota crated the Border-to-Border Broadband Development Grant Program, created by the Legislature in 2014 and administered by the Department of Employment and Economic Development (DEED). The grant provides dollar-for-dollar matching for constructing last mile fiber, although the money is likely to go to projects that contribute a higher percentage of the cost of a project. Minnesota is one of the lucky states that is running a budget surplus and this seemed like a good way to spend some of that money. There are numerous rural communities in the state that are actively seeking a broadband solution, so there is no lack of potential projects to be funded.

This was created in the 2014 legislature and the original bill asked to fund this with $100 million. The cable companies and carriers lobbied heavily against this funding, not wanting to have the state fund any competitors – although the funding was supposed to be used in areas where there is no broadband today. And the carriers were successful and chopped the grant pool down to $20 million.

When that money was awarded last year it went almost entirely to independent telephone companies and the only non-incumbent recipient of the grant was a new start-up cooperative. There were numerous applications from municipalities, but none were funded. The governor has recently recommended funding $200 million to this fund over the next two years, and we’ll have to wait and see how much of this makes it through the political gauntlet.

California has a program called the California Advanced Services Fund. Attempts to create funds within that program to build rural fiber have also been met with stiff opposition from the large incumbents.

Recently a bill was introduced to add $350 million to that fund, $150 million of which would go directly towards building last mile fiber in the form of matching grants. Past attempts to get infrastructure funding failed. The latest proposal has made it clear that any funding would only go to rural areas (in the last proposal it could have gone to urban areas). The new funding also has a significant pot of money allocated to broadband adoption efforts and for bringing broadband to public housing. Proponents of the bill are hoping that this will be more acceptable to the opponents, but if the past is any indicator the incumbents don’t want any competition of any kind.

It’s certainly laudable for the states to tackle broadband. There are obviously not going to be any federal programs aimed at the problem for now and anybody who understands broadband knows that help is needed in getting broadband to rural areas. But it seems that every attempt by states to tackle the problem gets killed or whittled down to the bare bones during the political process.

2 thoughts on “State Contributions for Broadband

  1. Both incumbent lobbying to preserve their service territory hegemony and limited state budgets rule out state governments as a viable means of support for the modernization of the nation’s telecommunications infrastructure to address network deficiencies and disparate access. Only the federal government has the resources equivalent to the work that needs to be done.

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  2. Pingback: Minnesota gets nod as a state that is trying to fund fiber in rural areas | Blandin on Broadband

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