The federal government is pouring billions of dollars into expanding broadband internet access. But it’s at the state level where the financial rubber meets the fiber-optic road. History suggests some states are ahead of the game, while others will have to play catch-up.
The recently signed Infrastructure Investment and Jobs Act includes significant funding to expand broadband access, to help households pay for their monthly broadband connections and to help people learn how to productively use those connections. This legislation represents Congress’ first formal recognition of the essential nature of high-speed internet.
Historically, broadband funding has been distributed from federal entities such as the Federal Communications Commission or U.S. Department of Agriculture directly to internet providers. The Government Accountability Office, which monitors and audits government operations, has been critical of these efforts.
This time, states are at the center of the funding. The $42.5 billion Broadband Equity, Access, and Deployment program, known as BEAD, requires each state to generate a five-year action plan laying out how it will use the funds.
Similarly, the $2.7 billion Digital Equity Act requires each state to establish an organization responsible for developing a digital equity plan. Digital equity means ensuring that every community has adequate access to the technologies and skills needed to fully participate in society.
Not all states are equally positioned to handle the funds.
Some states have built detailed broadband maps that move beyond the highly criticized FCC versions, and clearly depict areas without access. Others have an established base of nonprofits and public entities that have already been successful at this type of work.
In short, states have varying track records when it comes to broadband projects. Rolling out billions of dollars of funding will be a challenge for those that are new to digital equity.
The largest portion of the broadband funding will be focused on broadband infrastructure. Each state will be awarded an initial amount of $100 million, with the remainder of the $42.5 billion allocated based on the percentage of unserved locations across states. The states are then responsible for disbursing these funds. Unserved locations can include business sites, not just households.
So, while it might seem unfair that Vermont, with fewer than 50,000 people classified as unserved, receives the same initial allocation as Texas, with over 1.2 million people unserved, this investment is less than 15% of the total BEAD funding. The $100 million should also provide an incentive for states to establish their five-year action plans and to set up offices capable of awarding grants.
The task of setting up a process to handle grant applications and assess which ones should be funded is not trivial. Recent research has defined a competitive grant program as a key component of state broadband policy, including the establishment of evaluation criteria.
States with existing broadband offices and grant programs will be well positioned to hit the ground running. [Rhode Island does not have a broadband office.]
The law also adds several points related to grant awards that will be new for most states, regardless of how long their broadband office has been in place. One prevents states from excluding cooperatives, local governments, nonprofits and public utilities when considering who is eligible for the broadband funds.
The second requires grant awardees to establish a low-cost service option, leaving the definition of “low-cost” up to the state. Similar state-level efforts have not fared well in the past, and there is likely to be opposition from awardees about price and eligibility.
While federal programs to address broadband infrastructure have been around for a while, the focus on digital equity is new. Here, again, some states are at an advantage.
California has had a program emphasizing digital literacy, accessibility and broadband adoption, with grant programs in each.
Most other states are newcomers to the topic, although there are resources to help them get started.
Brian Whitacre is professor and Neustadt chair at Oklahoma State University’s Department of Agricultural Economics. Christina Biedny is a Ph.D. student in agricultural economics at OSU. Distributed by The Associated Press.
