The Battle Over Grant Rules

There has been a huge battle going on behind the scenes in Washington as Congress wrestles with including broadband grants in the infrastructure bill. Every lobbyist in Washington has been working overtime to try to influence the process. We’ve now seen the Senate’s vision of legislation, but there will still be a big fight when it’s time to reconcile the Senate and House broadband grant rules. Here are some of the key issues being contested in creating final infrastructure legislation:

What is Grant Eligible? This is the biggest area of contention. The big cable companies and telcos only want to see grants being awarded to places that don’t have 25/3 Mbps broadband today. More importantly, they want to see the eligible areas defined by the FCC’s lousy mapping. The big ISPs don’t want to make it easy for communities to make claims that actual broadband speeds are far slower than what has been reported to the FCC.

What the big ISPs definitely don’t want to see is the definition of unserved and underserved to be updated to something closer to reality. They do not want to see grant funding available to areas that don’t have 100/20 Mbps speeds today.

The worst possible scenario for the big ISPs is that local communities get to decide what areas need better broadband like is happening with ARPA funding that’s been given to cities, counties, and states. They know that cities intend to build fiber to poor neighborhoods, or even to whole cities – and the ISPs want to maintain the monopoly in these areas.

Who Decides the Grant Rules? There is also a lot of arm wrestling about who gets to decide the rules for grants. The big ISPs are not happy that Treasury got to set the rules for ARPA grants because that was a new group of decision-makers who have never been lobbied before. Giving the rulemaking ability to Treasury also meant that the White House could provide input by making its wishes known.

There is no perfect answer to this question from the perspective of the big ISPs. They don’t want Treasury to set the rules again. There are several alternatives. One is to let the FCC award the funding through another reverse auction, the option with the highest chance of following the FCC mapping. The rules can be set by the NTIA – a group that lobbyists know well – but which is likely unpredictable if handed tens of billions of dollars. Grant money could be given to the USDA to administer through the ReConnect grant program and the arcane rules at the RUS. Or funding could be given to states to decide – but only of the rules are first restricted to limit states from using the money freely.

Interestingly, I’ve heard credible rumors over the last few months that each of these options has been considered during various permutations of writing the legislation. The key goal for the big ISPs is to be able to influence grant rules, regardless of who will dispense the money. If the rules are set tight enough, much of the grant money could be unusable – and nothing would please the big ISPs more. For example, if money is divvied up evenly by state, then there are many states that can’t spend a pro rata share of the billions. If the rules can strictly only be used in places that can’t get 25/3 Mbps, then it’s probably impossible to spend much of the infrastructure money.

Broadband Speeds for New Infrastructure. A fight over speeds is the same thing as a fight over the technologies that can be built with grant funds. It seems the Senate has accepted the goal for new infrastructure at 100/20 Mbps. This speed enables grant funding to go to cable companies, WISPs, and satellite broadband. If grants can only be used to fund 100 Mbps symmetrical speeds, those two technologies are largely eliminated. You may have noted a spate of opinion pieces lately throughout the industry claiming that we don’t need symmetrical speeds. This is what that argument is all about.

Summary. You can quickly see who is winning the lobbying war by skimming through proposed legislation for these critical elements. On one side of the battle are broadband and community advocates who think we should largely use grant money to build fiber. This side argues for symmetrical speeds. They want communities to decide the areas that need better broadband rather than stick with erroneous FCC maps.

On the other side are big ISPs that don’t want to see fiber everywhere. They are pushing for a strict definition of areas that are eligible for grants, and they want technologies that barely meet 100/20 Mbps to be grant eligible. They want the ability to influence the writing of the grant rules.

We are now deep into the sausage-making part of legislation, and all of these issues are still open for debate. The Senate legislation clearly favors the big ISP position. There is still work to be done to get a bill that reconciles the House and Senate plans – and much more infighting to come. But at this point, the big ISPs and their lobbyists are winning the fight – which likely means in ten years, we’ll still be wondering why many parts of the country didn’t get adequate broadband.

2 thoughts on “The Battle Over Grant Rules

  1. Thanks for clarifying the issue!!! Although I have a preference, it would be somewhat difficult for me to understand all the cracks and crevices of big business’ interests. For the time being cellular service is the only option here in “rural” areas. Right across the street they have broadband but I heard the speeds are not the greatest. Only the counties really know who has broadband available and who does not. Pima county has updated their maps and those maps could be useful in the current situation. Thanks again, you are great!

  2. The fastest, most reliable broadband I ever had was in a my home in small rural county. The county installed fiber to home and two competing ISPs won contracts to service the accounts. It was an affordable dream for our household. Broadband is a utility. Shareholders and equity partners don’t sit in public meeting and ask “is that is the public’s be interest.”

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