Tag Archives: ReConnect grants

A New ReConnect

Senators Roger Marshall (R-Kansas) and Peter Welch (D-Vermont) have introduced a new bill that would fund USDA ReConnect grants with $650 million annually through 2030. It seems probable that, if passed, this would be the only federal grant program for the foreseeable future.

The requirements listed in the bill are pretty basic and reminiscent of prior rounds of ReConnect:

  • The funding can only be used in rural areas.
  • At least 75% of households in a grant area must be unable to buy broadband of at least 100/20 Mbps. Grants applicants will get priority if 90% of locations don’t meet that speed.
  • Constructed networks must provide speeds of at least symmetrical 100 Mbps.
  • The money can be awarded as grants, loans, or grant/loan combinations.
  • Applicants must make a 25% match, but this can be waived.
  • Grantees have five years to construct the network.

As I wrote recently, I believe there will still be many millions of locations left behind after the BEAD grants. But there are a few issues that will stop the proposed new ReConnect grants if not remedied:

  • If satellite is considered when looking at existing broadband coverage, then every place in the U.S. will be considered to have adequate broadband. The last round of ReConnect allowed applicants to disregard locations where the only fast broadband came from satellite and unlicensed fixed wireless. Without a similar exclusion, there will be no chance of creating a ReConnect grant serving area.
  • I believe there are many millions of locations where an ISP claims the capability to provide 100/20 Mbps in the FCC mapping data, but delivers slower speeds. Applicants need to have some reasonable way to challenge exaggerated FCC map data. In the last round of ReConnect, USDA largely accepted the FCC maps as gospel.
  • The requirement to propose service areas where at least 75% of locations don’t have fast broadband is based on an assumption that there are still entire neighborhoods that don’t have good broadband. The reality on the ground is that most places are a jumble of served and unserved locations mixed across the geography. The only way the 75% rule can be realistically met is if ISPs can cobble together a dozen little pockets of folks with poor broadband into a single grant application. USDA theoretically allows that, but practically, they have made this difficult. This will be totally impossible if USDA sticks with looking at broadband coverage at the hexagon level instead of at individual homes.

It would be very beneficial for USDA if the proposed bill gives the agency the authority to put together study areas that ignore satellite and that provide a reasonable way for applicants to ignore faulty FCC maps. I fear that, without that specific guidance in the new Bill, there is a decent chance that USDA will find itself paralyzed and unable to find grants that can work.

It’s not hard to picture the three broadband arms of the government at odds with each other in the near future concerning the definition of broadband. NTIA won’t want to see ReConnect used to ‘overbuild’ areas where BEAD awarded grants to satellite. It’s easy to imagine the FCC defending the broadband maps and not making it easy for USDA to ignore exaggerated speed claims.

I see this bill as a positive move. It’s bipartisan, which has normally been the case for rural broadband policy. But there are some real challenges to make this work, and if the legislation is the only guiding document for the USDA, I’m not sure it is enough to make a viable future ReConnect program.

Why ReConnect Now?

The USDA just announced a new round of ReConnect grants. These are grants that can only be used to serve the most rural places in the country, and one of the qualifications is the distance between the grant market and the nearest towns.

The new program provides $600 million in new funding, as follows:

  • $150 million in grants that must include at least 25% matching
  • $150 million is being offered as 100% grants with no matching for tribal areas
  • $100 million is available as 50% grant and 50% USDA loan
  • $200 million is available as 100% USDA loans.

There are a lot of grant scoring points awarded for serving areas with high poverty rates or that are socially vulnerable. The grants also favor projects that pay prevailing wages.

The homes served by the grants must not have any broadband available at speeds of at least 25/3 Mbps. A grantee must serve every home in a grant area. Anybody who has been following my blogs about the broadband maps knows that it’s not going to be easy to find a grant area that is rural and that has no homes where ISPs claim the capability to deliver speeds of at least 25/3 Mbps. A few other consultants I’ve talked to are wondering if there will be enough markets that can meet the ReConnect grant parameters.

But the oddest thing about these grants is the timing. This grant program was announced just as states are gearing up to award the much larger BEAD grants. Having both grant programs running concurrently is going to cause all sorts of problems for both ISPs and State Broadband Offices.

Two years ago, the Biden administration directed the FCC, the NTIA, and the USDA to coordinate everything associated with federal funding for broadband. It’s pretty obvious that there is no coordination happening.

Last year, the FCC released its A-CAM order only three weeks after the NTIA announced the BEAD allocations that would go to each State. The A-CAM program provides a subsidy to small, regulated telephone companies from the Universal Service Fund to upgrade rural broadband to speeds of at least 100/20 Mbps. The timing of the FCC announcement made no sense because the allocation of BEAD funding to states would have changed significantly had the A-CAM locations been removed from the universe of unserved locations before the allocation to states.

The timing of the FCC announcement gave the appearance of the FCC wanting headlines about how it’s tackling rural broadband right after NTIA got all of the headlines. It’s impossible to believe that the FCC couldn’t have provided this information to NTIA before the $42.5 billion was allocated.

It’s hard to imagine how State Broadband Offices can handle the concurrent grant program. What does a State do with an area where there is a pending ReConnect grant? They can’t take it off the table because the ISP might not win the ReConnect grant. If the State awards a BEAD grant in the same area as a ReConnect award, they will probably be duplicating or overlapping the ReConnect grant.

An ISP considering a ReConnect grant has a similar dilemma. Should they also apply for a BEAD grant for the same area to be safe? What does an ISP do if a State awards a BEAD grant in some portion of the ReConnect area before the ReConnect awards are announced?

It’s not hard to understand why the USDA did this because once BEAD grants start getting awarded, there might not be many places left that meet the ReConnect eligibility rules. Both grant programs provide grants to the same areas.

It’s clear that the FCC and USDA ignored the White House directive to coordinate grants and have done the opposite. I have to frankly wonder how much of this boils down to policymakers who want to make grant awards for the headlines and photo ops at ribbon cuttings. This duplicate effort is not making it any easier to solve the rural broadband gaps.

Rural America is Losing Patience

From all across the country, I’m hearing that communities without broadband are tired of waiting for a broadband solution. Local broadband advocates and politicians tell me that folks with little or no broadband are hounding them about when they are going to see a broadband solution.

A large part of the frustration is that folks have heard that broadband is coming to rural America, but they aren’t seeing any local progress or improvement. A big part of the reason for this frustration is that folks aren’t being given realistic time frames for when they might see a solution. Politicians all gladly told the public that they had voted to solve rural broadband when the IIJA infrastructure legislation was enacted in November 2021. But almost nobody told folks the actual timelines that go along with the broadband funding.

Consider the timeline to build broadband as a result of various kinds of funding:

  • There was a recent round of ReConnect funding awarded. It generally takes 4- 6 months to get the paperwork straight after accepting a ReConnect award, and then grant winners have four years to build the network. Some of the folks in areas of the ReConnect awards that were recently awarded won’t get broadband until 2026. Most won’t see any broadband until 2024 or 2025.
  • The best timelines are with state broadband grants. Most of those awards require grant recipients to complete networks in two or three years. A lot of these grant programs were either recently awarded or will be awarded in the coming spring. The winners of these state grants will have until the end of 2024 or 2025 to complete the network construction, depending on the state and the specific grant.
  • The longest timeline comes from the FCC’s RDOF program. The FCC approved a lot of RDOF recipients in 2021 and again in 2022. A 2021 RDOF recipient has six years to build the full broadband solution – starting with 2022, the year after the award. A recipient of a 2021 RDOF award must build 40% of the network by the end of 2024, 60% of the deployment by the end of 2025, 80% of the network by the end of 2026, and 100% of the network by the end of 2027. At the end of 2027, the FCC will publish a final list of locations in the RDOF area, and the ISP has until the end of 2029 to reach any locations that have not already been covered. For an RDOF award made in 2022, add a year to each of these dates.
  • The big unknown is the giant $42.5 billion BEAD grants. We know that grant recipients will have four years to construct a network. But we don’t know yet when these grants might be awarded. It’s starting to look like grant applications might be due near the end of 2023 or even into 2024. This likely means grant awards in 2024. There will likely be an administrative pause for paperwork before the four-year time clock starts. My best estimate is that the bulk of BEAD construction will occur in 2025 and 2026, but BEAD grant projects won’t have to be completed until sometime in 2028 and maybe a little later in some cases.

In all cases, ISPs can build earlier than the dates cited above. ISPs realize that the longer they delay construction, the higher the likely cost of the construction. But some grants have built-in delays, such as having to complete an environmental study before any grant funds will be released. Many ISPs are going to suffer from supply chain issues with materials and labor and might not be able to speed up a lot.

The big problem is that people without good broadband want a solution now, not years from now. A family with a freshman in high school doesn’t want to hear that a broadband solution won’t reach them until after that student graduates from high school. People are getting frustrated by announcements from state and local politicians telling them a solution is coming – especially since most announcements aren’t being truthful about the possible timeline. Unfortunately, politicians like to deliver the good news but don’t want to be the ones to announce that faster broadband might reach folks between 2025 and 2028.

Folks are further frustrated when they hear that local governments are creating partnerships or giving grants to ISPs from ARPA funding – but again, with no immediate action or disclosures of the timeline. I am the last person in the world to give advice to local politicians – but I know if I didn’t have broadband at my home, I’d want to hear the truth about when it’s coming. This has to be tough for rural politicians who have negotiated partnerships with good ISPs but who know that a broadband solution is still likely years in the future.

Time to Stop Talking about Unserved and Underserved

I work with communities all of the time that want to know if they are unserved or underserved by broadband. I’ve started to tell them to toss away those two terms, which are not a good way to think about broadband today.

The first time I remember the use of these two terms was as part of the 2009 grant program created by the American Recovery & Reinvestment Act of 2009. The language that created those grants included language from Congress that defined the two terms. In that grant program, unserved meant any home or business that has a broadband speed of less than 10/1 Mbps. Underserved was defined as homes having speeds above 10/1 Mbps but slower than 25/3 Mbps.

As far as I can tell, these terms have never been defined outside of broadband grant programs. However, the terms began to be widely used when talking about broadband availability. A decade ago, communities all wanted to know if they were unserved or underserved.

The terms began to show up in other grant programs after 2009. For example, the FCC’s CAF II grant program in 2015 gave money to the largest telephone companies in the country and funded ‘unserved’ locations that had speeds less than 10/1 Mbps.

The same definition was used in the ReConnect grants created by Congress in 2018 and 2019. Those grants made money available to bring better broadband to areas that had to be at least 90% unserved, using the 10/1 Mbps definition.

The biggest FCC grant program of 2020 has scrapped the old definition of these terms. This $20.4 billion Rural Digital Opportunity Fund (RDOF) grant program is being made eligible to Census blocks that are “entirely unserved by voice and with broadband speeds of at least 25/3 Mbps”. That seemingly has redefined unserved to now mean 25/3 Mbps or slower broadband – at least for purposes of this federal grant program.

There are also states that have defined the two terms differently. For example, following is the official definition of broadband in Minnesota that is used when awarding broadband grants in the state:

An unserved area is an area of Minnesota in which households or businesses lack access to wire-line broadband service at speeds that meet the FCC threshold of 25 megabits per second download and 3 megabits per second upload. An underserved area is an area of Minnesota in which households or businesses do receive service at or above the FCC threshold but lack access to wire-line broadband service at speeds 100 megabits per second download and 20 megabits per second upload.

It must also be noted that there are states that define slower speeds as unserved. I’m aware of a few state broadband programs that still use 4/1 Mbps or 6/1 Mbps as the definition of unserved.

The main reason to scrap these terms is that they convey the idea that 25/3 Mbps broadband ought to be an acceptable target speeds for building new broadband. Urban America has moved far beyond the kinds of broadband speeds that are being discussed as acceptable for rural broadband. Cable companies now have minimum speeds that vary between 100 Mbps and 200 Mbps. Almost 18% of homes in the US now buy broadband provided over fiber. Cisco says the average achieved broadband speed in 2020 is in the range of 93 Mbps.

The time has come when we all need to refuse to talk about subsidizing broadband infrastructure that is obsolete before it’s constructed. We saw during the recent pandemic that homes need faster upload speeds in order to work or do schoolwork from home. We must refuse to accept new broadband construction that provides a 3 Mbps upload connection when something ten times faster than that would barely be acceptable.

Words have power, and the FCC still frames the national broadband discussions in terms of the ability to provide speeds of 25/3 Mbps. The FCC concentrated on 25/3 Mbps as the primary point of focus in its two recent FCC broadband reports to Congress. By sticking with discussions of 25/3 Mbps, the FCC is able to declare that a lot of the US has acceptable broadband. If the FCC used a more realistic definition of broadband, like the one used in Minnesota, then the many millions of homes that can’t buy 100/20 Mbps broadband would be properly defined as being underserved.

In the last few months, the FCC decided to allow slow technologies into the $16.4 billion RDOF grant program. For example, they’ve opened the door to telcos to bid to provide rural DSL that will supposedly offer 25/3 Mbps speeds. This is after the complete failure in the CAF II program where the big telcos largely failed to bring rural DSL speeds up to a paltry 10/1 Mbps.

It’s time to kill the terms unserved and underserved, and it’s time to stop defining connections of 10/1 Mbps or 25/3 Mbps as broadband. When urban residents can buy broadband with speeds of 100 Mbps or faster, a connection of 25/3 should not be referred to as broadband.