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Regulation - What is it Good For?

Earmarks – a New Source of Broadband Funding?

The current Congress stuck almost 5,000 earmarks costing almost $9 billion into the $1.5 trillion budget that was recently signed by President Biden. An earmark is when each member of Congress gets to designate funds directly to pet projects.

Earmarks have an ugly history. Earmarks were used in last year’s budget after an absence of over a decade. In the past, earmarks have often been labeled as pork-barrel spending, and there are many cases in the past when earmarked spending went unfairly to friends and backers of politicians.

But on the plus side, having earmarks again seems to have sped up the otherwise contentious budgetary process since each member of Congress has a vested interest in getting a budget passed.

There is no reason that earmark spending can’t be used for broadband infrastructure, and it’s likely that there were broadband construction projects buried inside of the 4,962 projects that were just funded this way. The recent earmark awards averaged a little over $1.8 million each, but there were some earmarks over $100 million. Each member of Congress awarded an average of $16.8 million in earmarks.

However, the dollars of earmarks allowed to any given member of Congress is not preset. The amounts are negotiated. It was the trading of political favors to gain earmark allocations that gave the process a bad name in the past.

The idea of getting an earmark for broadband is intriguing because I’m not sure anybody knows what rules would apply. If a member of Congress gives an earmark to build fiber in a specific part of a city, I don’t think it would matter what broadband speeds are already there. It probably doesn’t matter if other grants are already promised in the same geographic area. For example, I can imagine earmarks being used to overbuild an area with unawarded RDOF funding.

If earmarks are here to stay, then communities need to add this As a tool for funding broadband. In much of rural America, the lack of broadband is the number one local issue. A member of Congress might be able to provide the money to build broadband in a whole county – and be a local hero for doing so.

If you are going to pursue earmarks, you have to treat it the same as going after the grant. You must do your homework first and have a shovel-ready project that will come in on budget. That means doing the engineering and market research so that you know the cost of construction. You must be ready to jump on a project and build quickly if earmark spending comes with a deadline for spending the funding.

You’ll have a lot of questions about earmark spending that you’ll have a hard time getting answered. For example, I’m pretty sure that a federal project funded by an earmark would still be subject to the Buy American laws. You’ll want to understand upfront if an earmark-funded project would be subject to any other rules such as needing an environmental review or having to pay prevailing wages.

In the end, an earmark is a grant that bypasses the competitive grant process. If your community has a good enough broadband story to tell and a local member of Congress as an ally, then this idea is worth considering.

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