With all due respect to Federal Communications Commissioner Brendan Carr, his reaction to the Rescue Plan Act's State & Local Fiscal Recovery Fund (SLFRF) spending rules is way off base. As I wrote last week, the rules for broadband infrastructure spending are a good model for pushing down decision-making to the local level where people actually have the information to make informed decisions. (Doug Dawson recently also responded to Commissioner Carr’s statement, offering a response with some overlap of the points below.) 

The Final Rule from the Treasury Department gives broad discretion to local and state governments that choose to spend some of the SLFRF (SLurF-uRF) funds on broadband infrastructure. The earlier draft of rules made it more complicated for networks built to address urban affordability challenges.

However, in coming out against the rules, FCC Commissioner Carr is giving voice to the anger of the big cable and telephone monopolies that cities can, after collecting evidence of need, make broadband investments even in areas where those companies may be selling services already. Commissioner Carr may also be frustrated that he has been reduced to chirping from the sidelines on this issue because the previous FCC, under his party’s leadership, so badly bungled broadband subsidies in the Rural Digital Opportunity Fund (RDOF) that Congress decide NTIA should administer these funds and have the state distribute them. 

Nonetheless, the issues that Commissioner Carr raised are common talking points inside the Beltway and we feel that they need to be addressed. 

Background Note

The failure of the FCC to assemble an accurate data collection is many years in the making. No single presidential administration can take the full blame for it, but each of them could have corrected it. 

President Biden’s FCC is not yet fully assembled because of delays in appointment and in Senate confirmation, but it would not be reasonable to lay blame on the current FCC for the failures discussed below. That said, it is not clear that we are on a course for having better maps and data that will resolve these problems anytime soon.

Commissioner Carr’s Criticism 

Once a booming center of manufacturing, Allentown, PA (pop. 120,900) is looking to reinvigorate its economy by reinventing itself as a modern 21st century “smart city,” bringing fiber-to-the-home Internet connectivity to every resident in the city.

In October, the city proposed using $7 million of its $57 million in American Rescue Act Funds to aid in the deployment of a citywide FTTH network. City leaders hope the investment will help them reach the goal outlined in its strategic economic development plan to become a smart city by 2030.

The city will work with Iota Communications to conduct a feasibility study they hope will be complete in the coming months. While the possibility of a FTTH network is in the early stages for the city, the proposal signals a serious ambition to bridge the digital divide in the region.

Feeling The Way Forward

Allentown is one of three cities that make up a larger geographic area known as Lehigh Valley, with the other cities being Easton (pop. 27,000) and Bethlehem (pop. 75,500). For a while now, leaders in the valley have been talking about the digital divide and it’s been made clear with the pandemic that it can no longer be put on the backburner.

Pennsylvania lawmakers passed a law 2019 clearing the way for municipalities to have more of a say in how 5G is deployed in their communities. And while many local officials say the new law will help pave the way for Allentown to stay ahead of the curve, some have cautioned that a focus on 5G is a major distraction.

Communities across the United States got an unexpected gift from the Biden Administration last week in the form of additional flexibility to use Rescue Plan funds for needed broadband investments, particularly those focused on low-income neighborhoods in urban areas. 

When Congress developed and passed the American Rescue Plan Act, it tasked the Treasury Department with writing the rules for some key programs, including the State & Local Fiscal Recovery Funds (SLFRF). That program is distributing $350 billion to local and state governments, which can use it for a variety of purposes that include broadband infrastructure and digital inclusion efforts.

Treasury released an Interim Final Rule in May, 2021, detailing how local governments would be allowed to invest in broadband. I promptly freaked out, at the restrictions and complications that I (and others) feared would result in local governments backing away from needed broadband investments due to fears of being out of compliance with the rule. 

After we worked with numerous local leaders and the National League of Cities to explain the problems we saw in the proposed rule, Treasury released updated guidance in the form of a Q&A document to explain how local governments would be able to build and partner for needed networks. 

Given the many challenges the Biden Administration has had to deal with, we did not expect significant new changes to the Rescue Plan rules around the SLFRF. But after many months of deliberations, the Treasury Department has resolved all of the concerns that we identified as areas of concern in May. 

As we explain below, local governments have wide latitude to use SLFRF funds for a variety of needed broadband infrastructure investments, especially to resolve affordability challenges.

Summary and TL;DR

While a national debate rages over immigration and the border wall, just 30 miles north of the U.S.-Mexico border, Harlingen city officials are coming together to plan the building of a bridge – across the digital divide deep in the heart of the Rio Grande Valley.

When Harlingen (pop. 75,000) was founded at the turn of the 20th century, it established itself as a prominent commerce and transportation hub – the “Capital of the Rio Grande Valley” at “the crossroads of South Texas.” Over the years, thanks to its fertile delta soil, the cultivation of citrus fruit, grain, and cotton became a major part of the local economy. Today, however, the biggest industry in the second most populous city in Cameron County is healthcare.

As attractive as Harlingen has become to residents and visitors – with its extensive park system and tropical bird-watcher’s paradise (the city happens to be located where two primary avian flyways converge) – one thing the city lacks is adequate access to broadband, which is particularly acute among households with school-aged children.

Pandemic Spurs City into Action

That realization was the impetus behind a recent city commission vote to move forward with a feasibility study to determine how the city might build a broadband network and whether it should rely on fiber, fixed wireless, or a mix of deployment technologies to modernize Harlingen’s telecommunications infrastructure.

“What brought this to our attention was of course the pandemic,” City Manager Gabriel Gonzalez told Valley Central News. “When the school district had to go to virtual learning, we found out that there were students and some families that did not have access to (the) Internet.”

In August we reported on the effort to bring municipal fiber-to-the-home service to Gainesville. At the time, city commissioners were wrestling with whether to spend a portion of its American Rescue Plan Act (ARPA) funds to start construction on the first phase of a citywide fiber network.

After postponing a previously scheduled vote on how to spend the money at a meeting in October, city commissioners earlier this month voted to set aside $9.6 million of the city’s $32 million in Rescue Plan funds to extend its existing fiber network to connect over 2,000 businesses and nearly 10,000 homes in areas of the north central Florida city identified by planners as neighborhoods where service is most needed. Those neighborhoods include Springhill, Grove Street, Oakview Duckpond, Stephen Foster, Lincoln Estates, Duval, and Highland Court Manor.

“This is a huge step forward for our community,” said Bryan Eastman, founder of Connected Gainesville, a citizen-led advocacy group that launched in 2017 pushing for the city’s utility company to build out its existing fiber network to serve all of Alachua County.

Our city residents are tired of the status quo and are ready for a more connected future with better Internet [access] options. Thank you to our city commission for investing in this future. This is not the final vote on this, but it's the biggest step we've taken yet.

‘Powerful forces’ Lurk Behind-the-Scenes

While city commissioners voted to “set aside” the ARPA funds for broadband expansion, it was not a final vote to fund the project. The final vote is slated for January 6, 2022 after commissioners hear from city staff on how they intend to roll out the initiative.

Eastman said that while the final vote seems likely to pass, now is the time to keep pushing.

“There are still powerful forces that don’t want this to come to fruition, so we’re doing everything we can to get citizens to reach out and tell their commissioners they want municipal broadband in Gainesville,” he told us earlier this week.

Majority Believe Expanding Broadband Access is ‘Essential’

Earlier this month, Waterloo City Councilors unanimously approved a $2.5 million contract using its American Rescue Plan funds to hire Magellan Advisors to design and engineer a fiber-to-the-home network for the ninth-largest city in Iowa (est. population 68,000).

The plan, as we previously reported, is to deploy 309 miles of underground fiber across the city, which according to Magellan’s proposed contract, will pass “nearly every household and business throughout the community.”

Although the design and engineering work will provide city officials with an official estimate on how much it will cost to build the network, a study commissioned by the Waterloo Industrial Development Association (WIDA) in 2019 estimated it would cost between $39 million and $65 million to construct a city-wide network, according to the Waterloo Cedar Falls Courier.

The city’s Chief Financial Officer, Michelle Weidner, told Government Technology magazine the city is likewise eyeing American Rescue Plan funds to help pay for construction costs, although City Councilor Pat Morrissey noted that a bond issue will likely be necessary – something that Morrissey said is well worth it “in the long run.”

"You don't grow a community by cutting, you grow a community by investing," Morrissey said. "And what we as taxpayers will be doing is investing in something that is so long overdue, and I believe will be so appreciated."

Long Time Coming

Across the Commonwealth of Virginia, local governments, county broadband authorities, cooperatives, and private Internet Service Providers are leveraging the influx of American Rescue Plan funds to reach the state’s goal of achieving universal access to high-speed Internet connectivity by 2024.

With $850 million in state appropriations for broadband connectivity and $1.15 billion in local government and private service providers’ funding matches, the state is on track to invest $2 billion dollars toward broadband expansion in the coming years, and is currently investing in broadband expansion projects at record levels.

In August, Gov. Ralph Northam and the Virginia State Legislature agreed to devote $700 million of the state’s $4.3 billion in American Rescue Plan funds to expand access to broadband. The $850 million investment the state has announced will consist mostly of American Rescue Plan aid. The funds will be administered by the Virginia Telecommunication Initiative (VATI), which distributes grants to public-private partnerships to extend broadband service to unserved regions of the state, or areas that lack access to Internet service delivering connection speeds of at least 25/3 Megabits per second (Mbps).

Public-Private Partnerships Deep in the Heart of Virginia

From the marsh grasslands making up Virginia’s Eastern Shore, across the three peninsulas carved out by the Chesapeake Bay, all the way to the Shenandoah Valley in the West, a diverse array of regional partnerships have formed between Virginia’s local governments, electric and telephone cooperatives, and private ISPs as broadband expansion efforts continue to advance in 2022.

The U.S. Department of Treasury, tasked with writing the rules on how state and local governments can spend various federal relief funds made available for broadband expansion by the American Rescue Plan, recently released the guidelines [pdf] governing the Capital Projects Fund (CPF) — a $10 billion pot of money available to states, territories, and Tribal governments [pdf] to confront the need for improved Internet connectivity exposed during the pandemic.

Compared to when Treasury released rules governing the State and Local Fiscal Recovery Funds earlier this year, this go ‘round brought cheers instead of jeers from community broadband advocates, as we are seeing federal broadband policy break new ground.

The flexibility the Capital Projects Fund gives state and local governments to decide how to spend the relief funds is what broadband advocates are most excited about. CPF applicants are able to use the money in creative ways to respond to critical needs in their community laid bare by the Covid-19 pandemic, as long as the resulting project directly enables remote work, education, and health monitoring. 

Across New England, local-controlled, publicly-owned Internet infrastructure is on the rise -- from Bar Harbor, Maine to the Berkshires of Massachusetts. In Connecticut, however, it’s a different story. The Constitution State is a municipal broadband desert.

That may be changing, however, as Bristol (pop. 60,000) inches closer to becoming the first city in Connecticut to transform itself into a fountain of community-owned connectivity as city officials consider whether to use its federal American Rescue Plans Act (ARPA) funds to build a citywide open access fiber network. With $28 million in ARPA funds at its disposal, city officials have been in a months-long process of deciding how much, if any, of that money should be spent building fiber optic infrastructure. 

The city’s chief technology staff has been working with a consultant to draft design recommendations for the network, which were anticipated to be presented to both City Council and the Financial Board in August or September. 

“That plan has been completed but has not been presented to City officials as of yet,” City Chief Information Officer Scott Smith told ILSR in an email. “The consultants would like to present their plan in person to City officials and so we thought it might be more prudent to have them present it at an upcoming meeting of the Mayor’s ARPA Task Force. We are hoping that we can use some of the ARPA funds to fund a portion of this broadband buildout, especially in the areas of the City where we have a significant digital divide.”

Building this infrastructure would increase competition and address local concerns about the lack of reliable, affordable, high-speed Internet access.

“With the covid pandemic, it catapulted it to the top (of concerns),” Smith told the Bristol Press. “We have a digital divide issue in Bristol that is quite large.”