As the bipartisan Infrastructure Investment and Jobs Act (IIJA) is set to unleash an unprecedented amount of federal funds to expand high-speed Internet access as part of the Biden-Harris administration’s “Internet for All” initiative, all 50 states and U.S. territories have now received their initial planning funds.

Just before Christmas, the U.S. Commerce Department’s National Telecommunications and Information Administration (NTIA), which is administering the broadband funds in the infrastructure bill, announced Massachusetts as the final state to receive its portion of the planning funds ($6 million) in a joint press conference with outgoing Massachusetts Gov. Charlie Baker.

U.S. Commerce Secretary Gina Raimondo said the end-of-the-year allocation of planning funds for Massachusetts marked a significant milestone in the federal government’s support of state broadband offices rolling out competitive grant programs to build new broadband infrastructure and an array of other initiatives to close the nation’s digital divide.

All 50 states, Washington, D.C., and Puerto Rico have now received these planning funds. In a matter of months, we’ll begin to see plans from around the country, detailing how each state will connect all their residents to high-speed, affordable Internet service.

With the broadband-related portion of the IIJA made up of two major funding sources – $42.5 billion in the Broadband, Equity, Access and Deployment (BEAD) program and $2.5 billion in Digital Equity Act (DEA) programs – each state will receive $100 million in BEAD funding, plus an additional amount based on a formula that includes how many unserved and underserved households are in each state.

After years of efforts, the telecom industry and a range of independent broadband experts are making progress in a quest to make broadband grants tax exempt, a move industry players large and small say is necessary if the federal government wants the historic round of new federal broadband funding to benefit as many un- and under-served Americans as possible. 

During previous broadband grant programs, such as the (Broadband Technology Opportunities Program) BTOP and (Broadband Initiatives Program) BIP grants in 2010, the Internal Revenue Service had the authority to unilaterally exempt some grants from taxation. 

The Tax Cuts and Jobs Act (TCJA) required that broadband grants be treated as taxable income. As a result, telecom industry watchers have been warning since March that upwards of 21 percent of new grant awards would need to be paid back to the United States government in the form of taxation, complicating project financing and scale. 

“Entities expecting to receive grant funds would need to budget for the tax bill, potentially requiring a reduction in the scope of their project,” Casey Lide of the law firm Keller & Heckman wrote in a post detailing the implications. “Entities might also consider structuring a project so that grant funds are received by tax-exempt entities.”

With more than $50 billion in Infrastructure Investment and Jobs Act (IIJA) and American Rescue Plan Act (ARPA) funding waiting in the wings, industry players large and small are working to reverse the changes imposed in 2017 before the tax man comes knocking.

The National Telecommunications and Information Administration (NTIA) announced earlier this week that Louisiana will be the first state in the nation to receive federal grant planning funds to help states prepare for the deployment of high-speed Internet infrastructure and digital skills training under the Biden Administration’s “Internet for All” initiative.

Enabled by last year's passage of the Infrastructure Investment and Jobs Act (IIJA), the $2.9 million heading to the Pelican State is from the Broadband Equity Access and Deployment (BEAD) program and the Digital Equity Act (DEA) – a development Commerce Secretary Gina Raimondo said was a signal that “the Internet for All initiative is on track and on schedule.”

Over the coming weeks, every state and territory will have funding in hand as they begin to build grant-making capacity, assess their unique needs, and engage with diverse stakeholders to make sure that no one is left behind. My thanks go to Governor Edwards and his team; Louisiana was among the first to sign onto Internet for All and to apply for funding, and I know they’re ready to get to work for the people of Louisiana.  

According to NTIA’s press announcement, $2 million of the planning funds being allocated to Louisiana come from the BEAD program and will help the state:

One way or another, Grafton County, New Hampshire is lining up funding to build a massive new middle-mile network county officials hope will drive broadband competition—and more affordable fiber—into long underserved New Hampshire communities. 

Grafton was one of 230 U.S. communities that applied for a National Telecommunications and Information Administration (NTIA) Broadband Infrastructure Program grant. Grafton’s specific application asked for $26.2 million to help fund the creation of the 353 mile broadband middle mile network they’re calling Grafton County Broadband Now.

Costly Challenge from National Incumbent Providers

Charter Communications filed costly challenges with the NTIA challenging the application, falsely claiming that the county’s proposal was “duplicative” and Charter already provided broadband to the region. Most of the claims were based on older, unreliable data provided to the FCC by Charter dramatically overstating broadband availability.

Image

Grafton County surveys actually indicate the majority of county residents still can’t get access to the FCC’s base definition for broadband, 25 Megabits (Mbps) per second downstream, 3 Megabits per second upstream. Availability data across the county will likely look even worse should the FCC pass a new proposal to boost the definition of broadband to 100 Mbps.

In March, the Institute for Local Self-Reliance and the National Digital Inclusion Alliance held a livestream event on the range of challenges and tools available to communities to accomplish infrastructure, equity, and inclusion goals. We called it Building for Digital Equity: Demystifying Broadband Policy and Funding. There, we discussed the new policies and funding options available that can be applied at the state and local levels to help communities improve their Internet services.

This time we will be focusing on organizing around broadband, community impact of the federal funding, and new initiatives in progress thanks to the grants communities are taking advantage of. 

Join us on Wednesday June 29th from 1:00pm-2:15pm ET as we discuss what's happening on the ground in these communities and what some of them are planning to do with the new federal broadband dollars. We are calling it Building for Digital Equity, Chapter 2: Claiming Broadband For Your Community. Register here.

This event will feature:

• Your favorite co-host:  Christopher Mitchell of ILSR and Pamela Rosales of NDIA
• Videos from communities discussing what they are planning and doing with the funding
• Discussing the “how” in organizing communities
• Guest speakers discussing organizing strategies, and success stories.
• The return of the crowd favorite Broadband Trivia!

Looking forward to seeing you all there!

Event Links

Register for Building for Digital Equity, Chapter 2 here to get the livestream links; on the day of the event, it will also be available on Twitter, via @netinlusion, @communitynets and @muninetworks. 

During the livestream, you can also join the trivia game (link to follow).

The BEAD Notice of Funding Opportunity (NOFO) released by NTIA is packed with guidance and regulations for how tens of billions in new funding with be spent. Reading the rules closely gives us a sense of who they might advantage, at least early on, and the line NTIA is trying to walk in giving the money the most bang for its buck while also heading off abuse. 

On a recent episode of the Connect This! Show, Christopher Mitchell, Travis Carter (USI Internet), Kim McKinley (UTOPIA Fiber), and Doug Dawson (CCG Consulting) tackled what we know, what we don't, and what's likely to happen as states begin to file their letters of intent to participate in the program. Watch the shorts below to see them tackle Congressional intent, supply chain requirements, who we think will apply for these subgrants, and WISPs and overbuilding.

Watch the full episode here.

Subscribe to the show using this feed on YouTube Live or here on Facebook Live, on find it on the Connect This! page.

Email us broadband@muninetworks.org with feedback and ideas for the show.