What can you buy for $65 billion? That kind of money could purchase one Big Mac for every citizen of the Russian Federation, Kyrgyzstan, and Mongolia combined
— or build and upgrade the United States’ high-speed Internet infrastructure. According to the budget breakdown for the Infrastructure Investment and Jobs Act, signed into law on November 5, 2021—$65 billion has been allocated for the construction and upgrade of networks to provide quality high-speed Internet access. The permanent support of an existing program reduces the cost of Internet access for low-income consumers seeking to secure such services.
There are five components of this funding that will bolster U.S. broadband access. They are Broadband Equity, Access and Deployment Programs (BEAD); the Affordable Connectivity Program (ACP); the Tribal Broadband Connectivity Program; and Enabling Middle Mile Broadband Infrastructure Grants; and updates to the Rural Utilities Service (RUS) ReConnect program. Here’s what the funding for each intends to do.
BEAD has the largest allocation, with $42.5 billion. The funds will be managed by the U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA) and distributed by the NTIA directly to state and territorial governments.
These entities have been given explicit direction that the funds are to be targeted first to areas that lack access to 25/3 Mbps service and only once that deployment is complete, to provide funding to those areas that lack higher speed (100/20 Mbps) service. Based on the original document
(Division F, Beginning with Title Section. 60101 through 60604), there will be an established and absolute preference that funding is directed to high-poverty areas, as well as to those providers who can offer speedy deployment in these targeted areas. Internet access providers looking to receive such funding must offer low-cost broadband Internet service and provide effective consumer outreach, while also committing to a 48-hour max on network outages.
With the $42.5 billion overall funds, there’s a guaranteed minimum allocation of $100 million to each state, with $100 million allocated to the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. Any remaining funds will be allocated to states based on a formula that considers the number of unserved locations in the eligible grantee/recipient state as compared with the total number of unserved locations in the U.S. overall. An eligible fund recipient that receives funding will be required to submit a five-year action plan detailing local and regional needs, as well as offering solutions for the deployment of broadband services and localized data among others. Funds will be distributed based on the priorities defined in the legislation.
The second component of distributed funds will be the Affordable Connectivity Program (ACP), which has been allocated $14.2 billion. This program is an extension of the existing Emergency Broadband Benefit (EBB) program created earlier this year. Its focus is limited to the financial challenges posed to low-income consumers wanting to receive broadband Internet access. Through this funding source, providers offering service to qualified consumers will receive recurring subsidies to lessen the financial burden on needy consumers to receive Internet access while also providing a one-time subsidy for laptops and/or tablets to be connected to the Internet. While some changes to the original EBB will be part of the process, the ACP will continue its mission with a dedicated funding source.
The third component is the Tribal Broadband Connectivity Program, which accounts for $2 billion, in addition to a $980 million Tribal Broadband Connectivity program created in the 2021 Consolidated Appropriations Act. This $2.98 billion fund will also be administered by NTIA. Funds aim to address specific areas of concern, including digital inclusion and literacy, affordability, telemedicine, workforce development, and similar goals. In addition, this funding will be awarded directly to tribal organizations, including tribal colleges and universities. This funding is also separate and distinct from any funding potentially available from the Bureau of Indian Affairs.
Enabling Middle Mile Broadband Infrastructure Grants ($1 billion for 2022-2026) is the fourth component of infrastructure investment in broadband deployment. This fund exists to subsidize the development, construction, improvement or acquisition of middle mile broadband infrastructure that ultimately reduces the cost of last-mile services and improves network resiliency. This money is to be used to support wireline or private wireless broadband infrastructure, including leased dark fiber, point-to-point circuits to data centers, towers, and microwave links. All of this is meant to reduce the likelihood that network access goes down thanks to a single point of failure. In order to qualify, the relevant infrastructure must be capable of providing 1/1 gigabit service to anchor institutions and interconnected entities located with 1000 feet of the middle mile infrastructure.
As is the case with other funds provided through this infrastructure program, a functioning network must be deployed within five years of being funded. Like other elements of the program, funding awards here will be prioritized to entities that satisfy two or more of these criteria: providers must prove to have a fiscally sustainable build-out strategy; providers must commit to offer reasonable rates on a carrier-neutral basis (although it’s far from clear who determines what “reasonable rates” means); providers must identify and partner with specific last-mile service providers that meet certain requirements; providers must secure supplemental investments or in-kind support that will be used to accelerate completion of the project; and such providers must be able to demonstrate that the projects to be funded will benefit national security interests.
The final component of the infrastructure funds has been designated as updates to the Rural Utilities Service (RUS) ReConnect program. The amount designated for this component is $2 billion with three new provisions. First, at least 50% of households to be served by a funded project must be located in a rural area that lacks broadband service at speeds of 25/3 Mbps; secondly, 10% of funding must be made available in areas in which 90% or more of households lack sufficient broadband access. AND (the “and” is important here) funded projects must build networks that provide broadband service at speeds of 100/20 Mbps to the extent possible.
Projects that receive funding through these sources are to be utilized on projects that must be built out within a set time frame from the time funds are received. Although it’s possible that some extensions — and some additional funding — may become available at a later date.
This investment in infrastructure not only represents a significant step forward in broadband deployment but also further recognizes that under whatever name it’s called, the Internet has become a utility. Like electricity, it’s simply needed everywhere, not just in areas where the providers can generate positive returns.