Tag Archives: county governments

County Governments and BEAD

Today’s blog talks about the big disappointment being felt by elected officials in Counties all over the Country as word of the NTIA’s new rules for BEAD filters down to them.

I’ve worked across the country with dozens of Counties that committed time and resources to the BEAD process. Many Counties put a lot of effort into the map challenge process. Many Counties carefully interviewed ISPs and chose their favorites – because State BEAD grant rules told them that ISPs would get more grant points with local support. Many Counties went further and made local matching grants to ISPs to support a BEAD application. Some of these grants came out of the general coffers, but many were from ARPA funding. Unfortunately, most of those matching ARPA grants are now lost, and the money will fall to the floor.

Counties made the effort for BEAD because their constituents told them to. I have been in numerous Counties where the elected officials say that fixing broadband is the number one issue they hear about. They can’t stop and pump gas or go to the grocery store without somebody talking to them about poor broadband.

That’s all gone now. Broadband equity grants were completely killed in May. BEAD grants for fiber are all but killed. Almost every County official I talked to wanted BEAD to be used in their County to build fiber. They learned how fiber networks would be good for many decades to come, and they want broadband in rural areas that is as good as in larger towns and cities.

County officials understand better than anybody that better broadband is economic development. They understand that fiber means people will have enough upload speeds to work from home and how higher-paying jobs uplift a local economy. They understand that rural fiber networks are the first step for providing backhaul for rural cell towers – because rural cellular coverage is often even worse than rural broadband coverage.

They were looking at BEAD as a tool that would bolster the future of their County. A large majority of rural Counties are aging and losing population, and they saw fiber as a way to bring good jobs that might stop young folks from leaving the County after they turn eighteen.

County officials that put a lot of time and money into the BEAD process are not going to be happy with the NTIA’s ruling that effectively guts their chance to get fiber. Until this NTIA Notice, broadband has been a non-partisan issue. I remember being in a County Board meeting where Commissioners from both parties joked that getting better broadband is the one issue everybody could agree on. Unfortunately, the NTIA order is completely partisan and seems to be part of a larger effort of the new administration to undo the infrastructure program implemented by the last administration.

County officials don’t understand the need for the big change in BEAD. State Broadband Offices are already in the process this year of awarding grants so that fiber construction could be started soon. Everybody wishes BEAD had moved faster, but they are glad to see it finally moving forward.

The most disheartening thing about the NTIA Notice is seeing all of the effort local folks have made to get better broadband fall by the wayside. I was disappointed the day the BEAD grants were announced because Congress made it too complicated. I’ve written many blogs complaining about the rules and the process. But I never complained about the BEAD goals – because this was the chance to bring fiber infrastructure to thousands of rural counties.

To rub salt in the wound, the NTIA Notice also eliminates the local preference where local governments could give their favorite ISP extra grant points with an exclusive letter of support, and even more points by awarding a local grant.

I hope that a large number of rural elected officials are voicing their unhappiness to federal politicians this week. I doubt there are many members of Congress who haven’t supported BEAD grant applicants with letters of support. And most of them who visit rural areas always mention that better broadband is coming. Congress created the BEAD rules, and at this point they are the only ones who can insist that the NTIA lets the BEAD grant program play out as planned.

Related blogs:

Updating My BEAD Bingo Card

BEAD and State Broadband Offices

The County Dilemma

eyeballSomebody made a comment to me last week that we need more municipal broadband. I certainly agree with the sentiment, but I’ve recently been working with a lot of rural counties and what I’ve found is that bringing broadband to rural places is a lot harder than it sounds.

In the last year I have analyzed in detail a number of different rural counties. Engineers took a hard look at the cost of bringing broadband to each of these counties and I also created extensive financial models trying to find a way to pay for the broadband solution.

One unsurprising result of these studies is that it’s exceedingly hard to find and fund permanent broadband solution in rural places. A few of the counties I studied were in the Midwest where the soil is deep and soft and where buried fiber is as cheap as, or sometimes even cheaper than getting onto poles. But even with the lowest possible construction costs it can be hard to justify building rural fiber. And most of the country has higher construction costs than in rural Iowa or Minnesota.

I’ve also looked at places where the soil is rocky and hard and expensive to bury fiber. But some of these places also have a big mess on poles, making it a challenge to hang fiber. There are many rural pole networks that consist of short poles that need a lot of work or even replacement to add fiber. And as I have covered in several blogs, there are often major practical issues with getting access to poles even where it makes sense to do so.

But the number one issue with building rural fiber is getting financing. As it turns out, many rural counties have an exceedingly hard time contributing much financing towards a broadband network.

Citizens who want fiber often say that local governments ought to just suck it up and borrow the bonds needed to build fiber. But that sentiment is naïve. Rural counties generally don’t have the borrowing capacity to fully fund a fiber network. I’ve looked at counties recently where the cost of building just the fiber and electronics (which ignores operating losses and the cost of financing) ranged from $20 million to over $100 million. Numbers that large are beyond the ability of most rural counties to finance, even if they have the political will.

Rural counties as a whole don’t have a lot of discretionary money. By that, I mean that the revenues they are able to collect are generally almost entirely needed for the services they are required to provide by law. Counties have a long list of responsibilities. They generally have to maintain extensive road systems and bridges. They generally have to fund a police and jail system. They have to provide a healthcare systems of some sort. Many of them have to provide water and sewer systems to at least some of their constituents. And they have to take care of the daily issues of removing snow, repairing potholes, and all of those things that local governments do for citizens.

Counties everywhere have similar sources of funding. For instance, they collect property taxes, but some significant portion of those taxes is usually earmarked for specific purposes like the school systems. Counties also generally share in the sales taxes collected anywhere in the county, but in rural counties this is a much smaller revenue source than for more urban places. Counties also typically get a significant amount of their funding from the state or federal government, but these funds are usually earmarked for specific purposes as well. And most rural counties don’t collect a lot of taxes from businesses, which are a significant funding source for cities and towns.

I’ve talked to the bond advisors in many rural counties about the possibility of financing fiber. What I’ve generally found is that even if most counties borrow up their credit limit they can’t raise nearly enough to pay for a broadband network. And so many county governments, as much as they might want to find a broadband solution, are not themselves able to contribute much towards paying for the solution. So in many counties, municipal funding is not ever going to be possible, meaning that broadband networks need to funded in some other way.