Federal Funding for Broadband Infrastructure

There is a lot of speculation that we might be seeing some money aimed at broadband due to the budget passed by Congress on February 9. That bill contains $20 billion for infrastructure spending spread evenly in fiscal years 2018 and 2019. On a floor speech as part of the vote, Senate Majority Leader Charles Schumer says the money will go towards “existing projects for water and energy infrastructure as well as expanding broadband to rural regions and improving surface transportation”.

Any broadband money that comes out of this funding will have to be spent quickly by the government. The fiscal year 2018 is already almost half over and ends on September 30 of this year. It’s likely that any grants coming out of such money would have to awarded before that September date to count as spending in this fiscal year. In order to move that fast I’m guessing the government is going to have to take shortcuts and use processes already in place. That probably means using the BTOP grant forms and processes again.

The short time frame for any of this funding also likely means that only ‘shovel-ready’ projects will be considered. But that aligns with statements made by the administration last year when talking about infrastructure projects. Anybody hoping to go after such grants better already have an engineered project in mind.

Assuming that funding follows the BTOP funding program, there were a few issues in those grants that ought to be kept in mind:

  • The grants favored areas that had little or no broadband. This is going to be more muddled now since a lot of rural America is seeing, or soon will be seeing broadband upgrades from the CAF II and A-CAM programs funded by the FCC. It’s doubtful that the big telcos are updating the national databases for these upgrades on a timely basis, so expect mismatches and challenges from them if somebody tries to get funding for an area that’s just been upgraded.
  • The BTOP grants required that anybody that wanted funding had to already have the matching funds in place. There were some notable BTOP failures from winners who didn’t actually have the funding ready, and I speculate tighter restrictions this time.
  • There were several requirements that added a lot of cost to BTOP programs – requirement to pay prevailing wages along with environmental and historic preservation reviews. There has been talk in Congress about eliminating some of these requirements, and hopefully that would happen before any funding. But that will take Congressional action soon.
  • The BTOP process surprisingly awarded a number of projects to start-up companies. Some of these start-ups have struggled and a few failed and it will be interesting to see if they make it harder for start-ups. The BTOP process also made it difficult, but not impossible for local governments to get the funding.

If there is going to be any money allocated for broadband, it’s going to have to be announced soon and one would think that deadline to ask for this funding is going to have to come soon – in very early summer at the latest.

The alternative to a federal grant program would be to award the $20 billion as block grants to states. If that happens it might be bad news for rural broadband. There are only a handful of states that have created state broadband grant programs. Any state with an existing program could easily shuttle some of this funding into broadband.

States without existing broadband programs will have a harder time. Most states will need legislative approval to create a broadband grant program and would also have to create the mechanisms for reviewing and approving these grants – a process that we’ve seen take a year in the few states that are already doing this.

It’s almost been two weeks since the budget was passed and I’ve read nothing about how the $20 billion will be used. Regardless of the path chosen, if any of this money is going to go to rural broadband we need to know how it will work soon, or else the opportunity for using the money this year will likely be lost.


One thought on “Federal Funding for Broadband Infrastructure

  1. Pingback: Federal Government has $20 billion for infrastructure – is Minnesota poised to make the most of it? | Blandin on Broadband

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