There is one section of the $42.5 billion Broadband Equity, Access, and Deployment  (BEAD) grants that cities should find interesting. These grants can be used for installing internet and Wi-Fi infrastructure or providing reduced-cost broadband within a multi-family residential building, with priority given to a residential building that has a substantial share of unserved households or is in a location in which the percentage of individuals with a household income that is at or below 150 percent of the poverty line applicable to a family of the size involved (as determined under section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)) is higher than the national percentage of such individuals.

The BEAD grants are mostly aimed at solving the rural digital divide, but this is an open invitation for cities to seek grant funding to bring better broadband to low-income apartment complexes.

As is usual with most new laws, this one has one interesting incongruity. The BEAD grants establish a priority for States to follow – States should first use BEAD grants to bring broadband to unserved locations with broadband under 25/3 Mbps, then underserved locations with broadband slower than 100/20 Mbps, and finally to anchor institutions. My reading of the language is that serving low-income housing shares top priority along with rural unserved locations – the language says that grants can be used for unserved apartment buildings OR for low-income apartment buildings. This language seemingly gives low-income apartment buildings a higher priority than underserved locations. This language also implies that there is no speed requirement for low-income apartments to qualify for grant funding – the only requirement is the level of poverty.

It’s going to be interesting to see how States interpret this. States with big cities could see huge demand for broadband grants from cities that see this as the chance to solve the urban digital divide. I know that $42.5 billion is a lot of money, but it’s not going to stretch as far as Congress might have believed if every major city sees this as a chance to bring fiber to low-income neighborhoods.

The language is interesting in that it allows for bringing either Wi-Fi or reduced-cost broadband. The term Wi-Fi suggests what I call centralized Wi-Fi that floods hallways and common areas in apartment buildings. It’s a nice thing to have, but it is not the future-looking broadband that is needed for the next twenty years. I’d hate to see a lot of grants asking to install Wi-Fi instead of bringing real broadband to apartment units.

Bringing broadband to apartments will require an ISP. That could be almost anybody under the BEAD grants. Cities could be the ISP in a state that allows municipal ISPs. Cities could partner with the large incumbent ISPs or with smaller commercial ISPs. The most interesting idea is to partner with a non-profit ISP. It would even be possible for cities to hand these networks off to an urban cooperative. Anybody interested in the last two possibilities needs to be moving quickly to have the non-profit or cooperative formed by the time the grant requests are filed in a year.

A year is not a lot of time for cities to capitalize on this possibility. The specific apartments to be served should be identified. Somebody has to design and price out a technical solution. A city will have a better chance of winning funding if it has identified the ISP partner. And cities need to get active over the next few months to make sure that States build this option into the broadband plan that must be approved by the NTIA.

This $42.5 billion grant program is extraordinary in its size and scope – and it’s a once-in-a-lifetime chance to solve persistent broadband gaps. Cities need to marshal their resources quickly to make this happen because there probably won’t be another funding program for a long time aimed at solving the urban digital divide.