While cooperatives, utilities, and municipalities are seeing a welcome portion of Covid relief and infrastructure bill funding, the nation’s two biggest cable broadband monopolies continue to hoover up the lion’s share of most new broadband infrastructure grants. 

All told, the American Rescue Plan Act and Infrastructure Investment and Jobs Act will deliver more than $50 billion in new funding for broadband infrastructure. And while cooperatives and utilities have been big winners in states like Tennessee, a recent breakdown by Fierce Telecom of money awarded so far shows that cable monopolies have been the biggest winners by far. 

As of September, Charter (which sells service under the Spectrum brand) had won more than $170.8 million in grants across Ohio ($51 million), Kentucky ($49.9 million) Indiana ($27 million), Georgia ($12.2 million), Maryland ($8.5 million), Louisiana ($7.88 million), Alabama ($7.26 million), Wisconsin ($5.9 million) and Pennsylvania ($1.2 million).

Alabama and New Mexico voters will soon be given the midterm option of changing their state constitutions to help boost broadband funding and deployment, albeit in notably different ways. 

In Alabama, voters will head to the polls on November 8th to vote on a Broadband Internet Infrastructure Funding Amendment that would amend the state's constitution "to allow local governments to use funding provided for broadband internet infrastructure under the American Rescue Plan Act (ARPA) and award such funds to public or private entities."

County leaders have spent much of this year warning that Section 94 of the Alabama Constitution bans the state from granting public money or “things of value” to local governments for public and private use. That’s a significant problem when it comes to the $276 million in ARPA funds Alabama Governor Kay Ivey earmarked for broadband expansion last March.

Programs such as the USDA’s ReConnect and the FCC’s Rural Digital Opportunity Fund (RDOF) haven’t run afoul of the Alabama Constitution because they both involve the federal government directly doling out funds for broadband expansion. But ARPA funding allows local municipalities to distribute a portion of state-allocated funds.

Lexington, Tennessee is the latest U.S. city that will soon see the expansion of more affordable fiber thanks to the city-owned utility, Lexington Electric System (LES). LES’ recent $27.49 million state grant award will be the backbone of a new initiative that will both improve the utility’s electrical services, and deliver a long overdue dose of broadband competition to the area. 

Cooperatives and utilities were huge winners in the latest round of awards from the Tennessee Emergency Broadband Fund, itself made possible by the American Rescue Plan. Of the $446.8 million in awards doled out by the state, utilities and cooperatives walked away with $204.4 million — or nearly half of all funds.

LES Lands Major Grant Funding

The second biggest grant recipient was LES, whose $27.49 million award will be used to deliver future-proof fiber to the 22,000 residents across Henderson, Decatur, Benton, Carroll and Hardin counties that already receive electricity service from the utility. 

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The utility’s original business plan estimated that it will take five years and roughly $42 million to deploy 2,101 miles of new fiber to about 88 percent (18,183) of its current electric customer base. It then proposed taking another five years — and an additional $1.2 million — to reach the remainder of the utility’s harder to reach service users.

The U.S. Treasury Department announced this week the latest cohort of states approved to receive money for broadband infrastructure from the American Rescue Plan’s $10 billion Coronavirus Capital Projects Fund: Massachusetts, Michigan and Wisconsin.

“Together, these states will use their funding to connect more than 91,000 homes and businesses to affordable, high-speed Internet,” according to the Treasury’s press release.

Louisiana, New Hampshire, Virginia, and West Virginia were the first states approved to receive CPF funds in June; followed by Kansas, Maine, Maryland, and Minnesota in July; and Connecticut, Indiana, Nebraska, North Dakota, and Arkansas in August.

The latest tranche of CPF funds totals a little over $435 Million with Massachusetts approved for $145 million to fund new broadband infrastructure; $250.6 million for Michigan; and $40 million for Wisconsin.

A virtual press event was held on Thursday announcing the awards, led by Gene Sperling, Senior Advisor to the President and American Rescue Plan Coordinator; Jacob Leibenluft, U.S. Treasury Chief Recovery Officer; U.S. Sens. Ed Markey of Massachusetts and Debbie Stabenow of Michigan; Congressman Dan Kildee of Michigan; and Chairwoman of Wisconsin’s Public Service Commission Rebecca Cameron Valcq.

Massachusetts

In Massachusetts, the funds will be used for the Commonwealth’s Broadband Infrastructure Gap Networks Grant Program. The state estimates that will be enough to connect 16,000 households and businesses, which represents 27 percent of locations in the state that lack high-speed Internet access.

Sen. Markey spoke to the importance of high-speed Internet connectivity and how it touches nearly every aspect of day-to-day life:

Tennessee cooperatives and utilities came out at the top of the heap in the latest round of awards from the Tennessee Emergency Broadband Fund, netting nearly half of all money awarded for the expansion of more affordable broadband statewide.

The Tennessee Department of Economic and Community Development (TNECD) awarded $446.8 million to 36 applicants, who are now tasked with deploying improved broadband service to 150,000 unserved homes and businesses across 58 Tennessee counties. All told, TNECD said that 218 applicants applied for a total of $1.2 billion in broadband funding.

Of the $446.8 million in awards, utilities and cooperatives walked away with $204.4 million.

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Major awards to utilities included Lexington Electric System ($27.5 million), Bledsoe Telephone Cooperative ($17.7 million), Greeneville Energy Authority ($8.2 million), Knoxville Utilities Board (KUB) ($15.2 million), Board of Public Utilities of the City of Fayetteville ($23.9 million), and Cumberland Electric Membership Corporation ($17.5 million). 

“This is great news for our community,” Gabriel J. Bolas, President & CEO of KUB, said in a statement provided to ILSR. “We have known for some time that there is a need for reliable internet in Union, Grainger, Sevier, and Jefferson Counties, and this announcement proves there is a broad and concerted commitment to address their needs soon.”

Grants for Regional Telecom Giants Part of the Mix

Regional telecom giants and local monopolies were also well represented by the state’s latest broadband funding round. 

Tennessee cooperatives and utilities came out at the top of the heap in the latest round of awards from the Tennessee Emergency Broadband Fund, netting nearly half of all money awarded for the expansion of more affordable broadband statewide.

The Tennessee Department of Economic and Community Development (TNECD) awarded $446.8 million to 36 applicants, who are now tasked with deploying improved broadband service to 150,000 unserved homes and businesses across 58 Tennessee counties. All told, TNECD said that 218 applicants applied for a total of $1.2 billion in broadband funding.

Of the $446.8 million in awards, utilities and cooperatives walked away with $204.4 million.

Major awards to utilities included Lexington Electric System ($27.5 million), Bledsoe Telephone Cooperative ($17.7 million), Greeneville Energy Authority ($8.2 million), Knoxville Utilities Board (KUB) ($15.2 million), Board of Public Utilities of the City of Fayetteville ($23.9 million), and Cumberland Electric Membership Corporation ($17.5 million). 

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“This is great news for our community,” Gabriel J. Bolas, President & CEO of KUB, said in a statement provided to ILSR. “We have known for some time that there is a need for reliable internet in Union, Grainger, Sevier, and Jefferson Counties, and this announcement proves there is a broad and concerted commitment to address their needs soon.”

Grants for Regional Telecom Giants Part of the Mix

Regional telecom giants and local monopolies were also well represented by the state’s latest broadband funding round. 

Harnessing its American Rescue Plan funds, the city of Syracuse is seeking a partner to launch a pilot project as a precursor to creating a citywide municipal broadband network and to support the city’s broader digital inclusion efforts.

In his 2022 State of the City address, Syracuse Mayor Ben Walsh laid out the vision, recognizing that now is a time of opportunity.

"At no time in the past half century have conditions aligned so favorably for the City of Syracuse," Walsh said. "Population is growing. Graduation rates are rising. Private investment and job creation are again on the upswing. Our city fund balance has grown. The American Rescue Plan provides an unprecedented injection of federal aid — $123 million – to address challenges created and made worse by the pandemic. The Bipartisan Infrastructure Framework will pour tens of millions into the infrastructure challenges that always seemed just out of reach – roads, water, and broadband."

Syracuse wants to seize the opportunity by investing in both improved telecommunication infrastructure and digital literacy programs.

It has led the mayor’s office to issue a Request-for-Proposals (RFP) for the design, implementation and maintenance of a municipal network that would target households in Syracuse not currently served by the city’s incumbent providers (AT&T, Spectrum, and T-Mobile Home Internet). 

The deadline for submitting proposals is 2:30 pm ET October 11.

Seeking Open Ended Innovative Proposals

Similar to a recent request for proposals from Onondaga County (where Syracuse is the county seat), the city is seeking open-ended and innovative proposals. City officials have adopted a technology neutral approach and are not specifically asking for proposals to build a fiber network as most new municipal broadband proposals involve. Still, the city does have some parameters in mind. 

Plans for an open access fiber backbone in Erie County, New York (pop. 951,000) are being readjusted after having been stymied by the pandemic. The county will use Rescue Plan funding to cover the cost of building the backbone, which will be owned by the county and operated by ErieNet, a nonprofit local development corporation. The backbone will make connectivity directly available to anchor institutions and enterprise businesses, but the county hopes the project will draw private providers to build out last-mile infrastructure to residents. With the new fiber ring, Erie County seeks to increase both broadband availability and competition in the area. 

The project began in spring 2019, when the county announced its plan for a $20 million open access network, which at that time it was looking to have up and running before 2022. ErieNet’s original plan was a response to an acute need for connectivity among the county’s southern and eastern rural towns, as well as much of Buffalo – despite these areas’ proximity to relatively well-connected wealthier suburban communities nearby. The county is for the most part monopoly domain, served by Charter Spectrum, Lumen (formerly CenturyLink), and in some small patches, Verizon. Verizon has cherry picked wealthier areas like Kenmore, Williamsville, and Amherst, as well as a few blocks in Buffalo by the company’s hub there, but has not found the rural or high-density and low-income areas profitable enough to build to. Relatively smaller providers like Crown Castle and FirstLight have also made infrastructure investments in parts of the county, but do not appear to have expansion plans.

Last March, Caribou, Maine city council members expressed unanimous support for a charter amendment allowing the Caribou Utilities District to establish a broadband infrastructure division. It was just the latest move in a multi-year quest by the city to finally deliver affordable fiber broadband access to every last city resident.

Groundwork for the effort was laid one year ago, when city council members approved using $159,000 in American Rescue Plan Act funds to craft a broadband engineering study with the help of Caribou’s Business Investment Group and executives from local ISP Pioneer Broadband.

Late last March, the Maine Senate unanimously approved LD 1949: “An Act to Amend the Caribou Utilities District Charter to Include Broadband Services,” which formally, as the name makes clear, provided approval for the CUD to expand its services into broadband access.

Now the hard work begins. 

The plan as it currently stands is to build an open-access dark fiber network to every unserved Caribou residential and business location. The city would own the network, but private ISPs would provide last mile service to customers. 

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“We would like two or more ISPs to provide citizens with a choice of providers,” Hugh Kirkpatrick, Caribou Utilities District general manager, recently told the Bangor Daily News. “Competition should keep monthly prices lower and customer service higher.”

On the southern border of Texas in the Rio Grande Valley, Pharr Texas is the home of the largest commercial bridge from Mexico into the U.S. Now, the city is working on building an equally impressive virtual bridge to every home in Pharr with the construction of a municipal fiber-to-the-home (FTTH) network.

The progression has been steady despite pandemic induced setbacks, as city leaders are determined to solve the connectivity challenges in Pharr by leveraging the assets the city already owns while taking advantage of the unprecedented amount of federal funds now available to help communities expand access to broadband. To that end, the city has created regional partnerships, completed a feasibility study, and launched a pilot project. Now, Pharr officials are moving ahead with the construction of a city-wide municipal network. 

Wake Up Call in Rio Grande Valley

Pharr has a population of almost 80,000 people of which 94 percent identify as Hispanic or Latino with over 30 percent of families living below the poverty line. Their public meetings are often bilingual. But, it was in 2015 that the Federal Reserve Bank of Dallas reported that the Rio Grande Valley was on the wrong end of the digital divide. The report also highlighted the impact that had on the communities in the region:

The study involved focus groups with colonia residents. One theme that arose from the conversations with residents was the lack of access to the internet. The report found that the digital divide was a factor preventing residents from accessing regional labor market opportunities. Additionally, the report described the challenges colonia students face in school because of their inability to complete homework assignments due to lack of internet service and computers at home.

When earlier this week ILSR caught up with Jordana Barton Garcia, author of the report, she explained that “colonias” are informal neighborhoods where people live with no (or limited) infrastructure. Residents are sold lots without existing infrastructure, from water to broadband.