On June 17, the US Treasury Department clarified the rules for using federal ARPA broadband money that is being given to states, counties, cities, and smaller political subdivisions. The new FAQs make it a lot clearer that local government can use the funds to serve businesses and households that are considered as served – meaning they receive broadband speeds over 25/3 Mbps. My first reading of the rules came to the same conclusion, but these clarifications hopefully make this clear for everybody. There was language in the original Treasury Interim rules that might have scared off city and county attorneys from using the funding for broadband. Following is some of the clarifying language from the revised FAQs:
FAQ 6.8 adds the clarifying language that unserved or underserved households or businesses do not need to be the only ones in the service area funded by the project. This is a massively helpful clarification that discloses Treasury’s intent for the funds. The response to this FAQ could have previously been interpreted to mean that the money could only be used to bring broadband to places that have less than 25/3 Mbps. FAQ 6.9 further makes this same point, that while the goal of a broadband project must be to provide service to unserved or underserved areas, a sensible solution might require serving a larger area to be economical – and again, unserved and underserved locations need not be the only places funded by the ARPA funding.
FAQ 6.11 looks at the original use of the term ‘reliably’ when defining the broadband provided to homes and businesses. The Treasury response makes it clear that advertised speeds don’t define broadband speeds, but rather the actual broadband performance experienced by customers.
The use of “reliably” in the IFR provides recipients with significant discretion to assess whether the households and business in the area to be served have access to wireline broadband service that can actually and consistently meet the specified threshold of at least 25/3 Mbps – i.e., to consider the actual experience of current broadband customers that subscribe to served at or above the 25/3 Mbps threshold. Whether there is a provider serving the area that advertises or otherwise claims to offer speeds that meet the 25 Mbps download and 3 Mbps upload speed threshold is not dispositive.
FAQ 6.11 goes on to clarify that governments can consider a wide range of information to use as proof that broadband is not reliably meeting the 25/3 threshold including federal or state broadband data (meaning State broadband maps or the newly released NTIA broadband map), speed tests, interviews with residents, or any other relevant information. Local governments can consider issues such as whether speeds are adequate at all times of the day – do speeds bog down at the busiest times? Issues like latency and jitter can be considered.
Maybe most significantly, the FAQ gives an automatic pass to overbuild DSL or cable companies still using DOCSIS 2.0. While there are very few homes still served by DOCSIS 2.0, Treasury is allowing localities to basically declare DSL to be obsolete, regardless of any speed claims made by the telcos. This negates the tens of thousands of Census blocks where telcos claim rural DSL speeds of 25/3 Mbps – an area served only by DSL is justification to use the funding.
In a clarification that some states and counties will find reassuring, FAQ 6.10 says that the ARPA funding can be used to fund middle-mile fiber as long as it is done with a goal of supporting last-mile fiber.
These were critically important clarifications since there has been a lot of debate at the local level about whether ARPA money could be used in various circumstances. The clarifications make it clear that ARPA money can always be used to overbuild rural DSL. It’s also clear that the ARPA money can be used in urban settings as long as the funded area included at least one location that doesn’t have a broadband option of at least 25/3 Mbps. There are numerous little pockets in all cities where the cable companies didn’t build and where DSL is the only option. Cities can clearly use this funding to provide support for low-income neighborhoods and places the big ISPs have bypassed or ignored.