As States look ahead to how they’ll use BEAD funds beyond broadband infrastructure deployment, one key area of opportunity is emerging: supporting underserved multi-dwelling units (MDUs). The Infrastructure Investment and Jobs Act (IIJA) singles out a funding opportunity for MDUs where a “substantial share” of units lack adequate internet access or are in low-income communities.

While States have already received NTIA approval for how they plan to use non-deployment funds, there is a good chance that the upcoming revised Notice of Funding Opportunity (NOFO) might narrow States to only using funding for purposes specifically allowed in the Act. If that happens, States may be invited to revise their Initial or Final Proposals, giving them a valuable opportunity to rethink and refine their funding strategies.

This blog is a plea for States not to give up on the opportunity to use non-deployment funds to bring better wired-broadband to affordable housing MDUs. Landlords of affordable housing MDUs face a chicken-and-egg dilemma – many affordable housing MDUs don’t have good broadband because the tenants can’t afford to pay market rates for broadband.

The affordable rates needed for success will vary according to the incomes of tenants. In the MDUs that serve residents with the lowest incomes, prices will have to be in the range of $10 to $15 per month. There are affordable housing MDUs where incomes are higher, but generally still not high enough for tenants to afford normal market rates for broadband.

The MDU solution for States to consider is to wire MDUs with fiber or Category 6 cable to enable gigabit speeds within apartments. States should support wired solutions instead of funding  building-wide Wi-Fi, which will not meet the requirements of a served technology and is notoriously inconsistent (has anybody ever loved the Wi-Fi they get in a hotel?)

There are a number of reasons for States to consider this use of any remaining BEAD funding to wire affordable housing and other underserved MDUs.

It’s a lot more affordable to wire buildings than States probably assume. I’ve been doing research with the vendors and technologies used to wire MDUs. My analysis that the cost to retrofit a typical 72-unit MDU complex with Category 6 wire ranges from $300 to $630 per unit. Wiring with fiber costs a little more, and ranges from $450 to $800 per unit. It cost a lot more to wire buildings a decade ago, but modern wiring technologies and techniques have significantly reduced the cost.

It is also getting increasingly easier to find ISPs willing to work with landlords to bring affordable broadband when it’s needed. If the landlord takes on all of the rewiring and infrastructure costs inside an MDU, then ISPs need only bring a fiber connection to the MDU. The cost of a bulk-billed wholesale fiber connection can be made affordable when ISPs and landlords step outside of the industry norm. Most ISPs operate on rolling 3-year contracts for selling to businesses (ISPs view an MDU as a business customer). For example, ISPs and landlords both get a huge benefit by considering ten or even twenty-year contracts for a fiber connection – landlords get lower costs and ISPs eliminate churn.

Because of the affordable cost of rewiring buildings for high-speed broadband, States can do a whole lot of good for a relatively small investment. Even if States pay 100% of the cost to rewire MDUs (and there is no particular reason they should pay 100%), the cost per family to bring better broadband to MDUs is a tiny fraction of the cost to serve a rural family with any broadband solution. BEAD originally held out a hope that it could help to solve the MDU broadband gap, and with non-deployment funds, some of that promise can still be kept.