Tag Archives: FEMA

North Carolina Provides Storm Relief

North Carolina announced a $50 million program to help ISPs that suffered damage a year ago with Hurricane Helene. The grants will be awarded through the North Carolina Department of Information Technology (NCDIT) Broadband Infrastructure Office. This is the same group that has been administering state broadband grants as well as BEAD.

The grants are available to ISPs who suffered damage in the 39 counties affected by the hurricane, plus the Eastern Band of Cherokee, who are in the far western part of the state. For anybody who has followed North Carolina and broadband, these awards are no surprise. North Carolina has been a national leader in broadband since the beginning. The state built the first state-funded middle-mile network that was designed to support broadband throughout the state and has been involved in promoting rural broadband for decades.

There is no question that networks in the region suffered big damage from the hurricane. In Buncombe County, where I live, 40% of all trees were damaged or destroyed. The hurricane devastated an estimated 822,000 acres of forests in the region. The flooding from the hurricane washed away entire towns, roads, and bridges. Mudslides wiped out a lot of homes and neighborhoods. Just within a few blocks from my home, dozens of wires were knocked off poles.

The area was aided after the hurricane by an amazing outpouring of help from across the country. Huge number of crews came in to replace poles and reattached wires. People who drove out of the area after the storm reported passing a non-stop caravan of utility trucks coming into town.

The quick fixes done by these crews were awesome and got the networks up and running. But anybody like me who always looks up at poles still notices a lot of work is needed to shore up the many quick fixes.

Network owners around the country might be wondering why this state grant funding is needed. In the past, FEMA has always stepped up to help utilities and telcos in disaster areas. Unfortunately, North Carolina has only received about 25% of the $59.6 billion estimated damage costs from FEMA. FEMA doesn’t ever pay all damage costs, but they have always paid a lot more than what Western North Carolina has received this time.

To be fair, Congress allocated a lot of funding for storm relief, but the money is not flowing. This seems to fall in the same category as other billions of dollars of federal money that aren’t making it to states for a huge range of issues.

To put the storm damage into perspective, the annual budget for the State of North Carolina was $29.7 billion in 2024 and $30.8 billion in the current fiscal year. There is no way the state could ever pick up the cost of a major storm.

Perhaps the money will eventually flow, but there doesn’t seem to be much movement on the federal side. The federal reaction to this storm should be a wake-up call to every network owner in the country. Everybody has gotten used to thinking of FEMA as the backstop for covering catastrophic damage. What happens if this is no longer true?

One of the best things about electric and communications companies is that everybody is willing to send crews to help after storm damage anywhere. But those utilities have always expected to eventually get reimbursed for a significant portion of that cost. Will utilities be so quick to send crews elsewhere if they have to fully foot the cost? I would hope so, but realistically, a lack of federal payment of disaster funds could put a crimp in the amazing system of mutual aid that benefits every community when they need help. And eventually, it’s going to be your community that needs the help.

Misaligned Priorities

We have several sets of broadband priorities at odds with each other in the country. The federal government is on a big push to move all transactions with the government to digital. The example that got a lot of press was when FEMA said it would only communicate with disaster victims through emails and its online portal. But government agencies across the board are pushing folks online to communicate.

The government is also clearly supporting an AI revolution where AI is supposed to revolutionize the way we work and live. According to federal government rhetoric, we are a little bit ahead of the Chinese in terms of AI development, and politicians seem to support the idea of doing whatever is needed to make sure that the U.S. wins the AI race.

At the same time that we are prioritizing AI and moving everything online, we seem to be deprioritizing broadband. NTIA cut the BEAD program funding in half to save money, at the expense of building new networks that would provide solid infrastructure for the next fifty years. The Administration outright killed the Digital Equity Act, which had the goal of getting computers into people’s hands and training them how to use them.

These goals are clearly at odds with each other. Consider the Digital Equity funding. There is a huge lost opportunity cost for not giving people the tools to enter the digital world that the government wants. What is the cost to society for people who aren’t given the tools to enter the digital world? Digital equity folks can rattle off tons of stories of folks who were given help with broadband who then went on to work in a tech field, start a business, become teachers, or otherwise thrive and contribute to society.

The disparity between these policies makes no sense to me. It looks to me like the Digital Equity Act was killed for the simple reason that it had the name ‘equity’ in its title. But digital equity never had any of the connotations that politicians classify as DEI. Digital Equity has always been an effort to help people learn more about and master computer technology and broadband. It makes no sense not to have digital equity as a goal if we want everybody to be able to use AI or communicate with the government online.

The BEAD grants were trimmed back for one reason only – to save money. The new Administration sent folks into every nook and cranny of the government to find ways to save money. On the surface, this isn’t a bad thing, and I have to think that many of the cuts to government expenses are good in the long run. But BEAD was never about spending money. BEAD is an infrastructure bill. There are reams of economic studies that show that spending money on infrastructure always returns more to the economy than the cost.

Just in my part of North Carolina, there are a bunch of counties where all of the BEAD awards went to satellite broadband. Set aside that Western North Carolina is mountainous and heavily wooded, and there will be homes that won’t be able to get adequate broadband from the satellites. Set aside that many of these counties have low overall incomes and many folks won’t be able to afford the satellite broadband.

The bigger issue is that building fiber is about a lot more than just bringing broadband to homes. When counties get a fiber network, they can start to get creative to find ways to leverage a new network to improve the local economy. Satellite broadband is finally starting to deliver the broadband that the average home needs to join the modern world. But satellite broadband isn’t going to support schools. It’s not going to enable a county to attract a new factory. Satellite is not going to enable a county to seek ways to improve cellular coverage. Fiber is the infrastructure needed to help the overall community, while satellite broadband just helps customers who can afford it.

I know this is probably coming across as another rant, but I know I’m right. BEAD and the Digital Equity Act were tools that could have made a big difference in rural communities. I’m pretty sure that by killing broadband programs that AI will not be coming to the rural counties in Western North Carolina. Folks here are going to fall through the cracks because they will be unable to communicate with FEMA and other government agencies. It feels like the government is making a conscious decision to exclude Western North Carolina. I don’t think this is deliberate, but unfortunately, by pursuing misaligned priorities, that’s exactly what is happening. The current government is making far too many decisions in a vacuum without considering the bigger picture.

Forcing Connectivity

In August, FEMA changed its disaster policy, and everybody who receives federal aid from the agency must now have an email address and must register and deal with disaster-related issues through a FEMA portal. WIRED reported having seen an internal document from FEMA that said the change is “an important step to prepare for the transition to digital payment methods and enhance communication with survivors throughout the application process.” The change is the result of an executive order in March that tasks the entire federal government with going digital and discontinuing the writing of checks for payments.

This is the first time I can recall any government agency that is only willing to correspond with constituents digitally. A huge number of local, state, and federal government systems have gone online, but I can’t recall any government processes that didn’t allow people to do things in person or using a telephone.

FEMA told WIRED that about 80% of people who need aid already do the process online. For folks who are unable to do this online, FEMA has always sent people into disaster areas to meet with and talk to people. In my area after Hurricane Helene, FEMA set up tents at public sites that were advertised on the radio. In the worst hit places, FEMA staff went door-to-door. Apparently, such local efforts are not going to happen in the future.

This is a really big deal because there are plenty of people who are illiterate and can’t deal with an online system. There are more people with no digital literacy skills, particularly a lot of the elderly, who will not be able to figure out an online portal. There are still people in every community who don’t have home broadband, don’t have a computer or laptop, or don’t own a smartphone. These people are going to be unable to interact with the government if all communications are by email and a portal.

The FEMA online process will be a huge barrier for folks with no digital skills or broadband connectivity. The process starts by registering with FEMA through a portal. The portal will then ask people to verify who they are, which means taking and sending pictures of documents. The portal will be the only source of communication for the entire assistance process. My experience with government portals suggests it won’t be as easy to use as advertised, even for people with good digital skills.

This is particularly troublesome for an agency with the mission of helping areas struck by emergencies. My region of Appalachia was decimated by Hurricane Helene. Cities and towns mostly got power and cell coverage within a few weeks, and a few more weeks to get home broadband. But a few towns were so devastated that outages were much longer. A few towns were wiped off the map. There was a handful of rural areas that were without power for months. There are still some remote roads that have still not been opened a year later. Immediately after the hurricane, nobody here was able to connect with FEMA online.

I’m sure that this is only the start, and it’s not hard to envision that all interactions with the federal government will move online. The IRS has already stopped paying refunds by check. The agency encourages people to get a bank account, but will send money on a prepaid debit card or a digital wallet. I shudder thinking of the government helping somebody who lost a home by mailing a debit card.

What is probably the most disturbing about this is that these new requirements come on the heels of NTIA cutting $3.5 billion in digital equity grant funding that was aimed at helping people improve digital skills and learn how to get online.

FEMA and ISPs

One big change coming from the current administration is that the federal government is shoving payments from FEMA down to States. The administration talked about completely closing FEMA, but just recently said that they would keep the agency open in the future. But with the budget cuts that came out of the OBBB, it’s clear that the federal share for paying for disasters will go down, meaning the State share will increase.

Depending on the state, this transfer of funding responsibility could have a huge impact on an electric utility or a telecom provider with an extensive network. FEMA has quietly helped to pay for damages to networks caused by major storms, fires, floods, or other disasters.

FEMA was created in 1979 by combining several emergency response efforts in the federal government. FEMA became part of the Department of Homeland Security in 2003 and has the dual mission of providing disaster relief and educating the public on disaster awareness.

FEMA was busy in 2024 and responded to 90 disaster events that included numerous fires, several major hurricanes, including Milton and Helene, floods, landslides, and tornadoes.

FEMA has served as a financial backstop when disasters cause widespread damage to infrastructure of all kinds. FEMA has shown up in the past when a governor and the President both declared a disaster event. FEMA typically has paid for a portion of storm damage, with additional help coming from a State.

FEMA isn’t the only source of federal funding, and Congress can directly approve funding to go to a state that has a disaster. However, all of the experts I’ve been reading expect that the federal funding for disasters will drop significantly, meaning States will be expected to fund a significant portion of storm damages.

A diminished FEMA is going to create havoc. States do not have the extensive disaster teams that swarm a disaster area for up to a year after a disaster. States may not have mechanisms in place to easily fund damages to infrastructure and may need to pass legislation to be able to reimburse an electric company, cable company, or other network owner.

I’ve witnessed numerous occasions when disasters cause extensive damage to networks. I worked with a client a few years ago who had large stretches of fiber burned from an extensive wildfire. There was a hurricane in the U.S. Virgin Islands a few years ago that snapped almost every utility pole on one island. Hurricane Helene last year not only knocked down poles in Appalachia, but in many cases, the ensuing floods washed away entire roads and the networks along them.

You might wonder why network owners don’t buy commercial insurance to protect networks. I suppose they could, but such a policy would be extremely expensive and would drive up the cost of the services supported. I’m not aware of any affordable network replacement insurance available in the market.

There are things that telecom network owners and utility owners might want to consider doing in reaction to a weakened FEMA. It’s important for network owners to work with states to make sure they are ready to help them after a disaster. With FEMA as the financial backstop, network owners have felt able to begin repairs immediately since they understood that the funding to cover repairs would eventually show up. It’s scarier to begin spending money without understanding how disaster reimbursement will work.

It’s not unrealistic to picture disasters where a state will be unable to cover the full cost of damages. It’s not hard to imagine network owners who can’t afford to make repairs without a guarantee of at least partial reimbursement. This could result in electric or broadband networks that sit unrepaired and customers unconnected to vital services, magnifying the negative impact of disasters.

Do I Need to Insure My Network?

I periodically get asked about buying insurance to cover a new fiber network, mostly asked by investors or bankers who are working with a fiber network for the first time. The assumption is that there must be insurance to protect against damage to a fiber network because there is insurance for everything.

The surprising response I give them is to not try to buy insurance for a network. If you can even find an insurance company that will insure it, the premiums are going to be far larger than you can financially justify. The reality is that fiber and copper networks and electrical grids are not easily insured.

This horrifies a banker because they are lending money for an expensive asset. So how are network owners protected against losses?

Small damages to networks are generally recovered from the party that caused the damage. If a water company or electric utility cuts a buried fiber, that utility pays for the cost of the damage. This works the other direction also, and it’s rare to build a new fiber network without damaging a few other utilities during the process. This concept carries to everybody else. If a commercial truck knocks down a pole, the pole owner tries to get recovery from the insurance company of the truck owner. If a homeowner goes awry building a new driveway and badly damages the fiber network, that homeowner or his insurance covers the damage.

Big network damage is mostly covered by FEMA. If there is a big hurricane, ice storm, flood, fire, tornado, or other major events, then FEMA funding kicks in as long as the governor of a state has declared an emergency. I have had clients get fully reimbursed from FEMA in recent years for damage caused by the western fires, damage from a hurricane, and damage from a tornado. The FEMA paperwork process is not pretty, but the agency covers the cost of damage to utility infrastructure. In fact, the two biggest things that FEMA payouts often cover are damage to buildings and damage to utilities – that’s what gets damaged by storms.

There are other kinds of damage that don’t fit these two categories. For example, a small brush fiber caused by lighting might damage a short section of a pole line but not be large enough to kick in FEMA. Utilities are on the hook and self-insure for this kind of damage. They generally send out their own crews to get the damage fixed as quickly as possible, and nobody reimburses them for something like a local brush fire.

This is not to say that insurance isn’t important. Smaller ISPs generally buy insurance for all buildings, including all of the electronics inside them. You can get insurance to cover powered field huts. It’s important to make sure your insurance policy is specific and that you add new locations to your policy since property policies are often specific by the street address of the asset being insured. It’s not mandatory to buy such insurance, and many ISPs choose to self-insure. If you borrowed the money to build a network, you might be required to insure.

Note that most of the big ISPs don’t carry insurance. They self-insure because, over the long-run, it’s cheaper for a big telco or cable company to pay to repair things than it is to pay an insurance company every year. But smaller ISPs probably don’t have deep enough pockets to pick up the tab for replacing a central office or a NOC.

When insurance is optional, you should do the math. How do the premiums paid over some period like ten years compare to the cost of replacing the asset? That math gives you a numerical way to weigh the risk of insuring or not insuring a given asset.