Federal Funding for Broadband Should Be Vendor and

According to Federal Communications Commissioner Brendan Carr, up to $800 billion is available for infrastructure, including broadband deployment.  More than half of that money has been provided by Congress through the American Rescue Plan Act (ARPA, $350 billion for state and local governments) and the Infrastructure Investment and Jobs Act (IIJA, $65 billion solely for broadband).  Commissioner Carr has estimated that $80 billion would be sufficient to connect every unserved household across the country.  This means that there are many opportunities for tens of billions of dollars to be wasted on overbuilding existing private sector broadband systems with government-owned networks (GONs) or government-subsidized networks (GSNs) and for millions of Americans to remain unconnected if the use of federal government funding is tied to a specific technology and is not restricted to truly unserved areas of the country.

Citizens Against Government Waste (CAGW) has long maintained that the most efficient and effective way to provide broadband access is to be technology and vendor neutral, including in the organization’s February 3, 2022, comments to the National Technology and Information Administration (NTIA) regarding the $42.5 billion provided for broadband under the IIJA, which did not place any limits on the technology that can be used which means cable, fiber, mobile broadband, satellite, and wireless broadband using TV white space and other unlicensed spectrum are all eligible for funding opportunities.  The legislation did require 100/20 Mbps upload/download, which means NTIA grants must not limit connections to so-called “future-proof” symmetrical100/100 Mbps download, as the Biden administration has repeatedly suggested and sometimes required, which essentially would limit the technology to fiber in the ground. 

Nonetheless, restrictions on broadband deployment are finding their way into grant funding and federal loans, including Phase 3 of the ReConnect loans being issued by the Department of Agriculture’s Rural Utilities Service(RUS), the $350 billion in ARPA funds issued by the Department of Treasury in January 2022, and the Broadband Equity, Adoption, and Deployment (BEAD) funding guidance issued as a Notice of Funding Opportunity (NOFO) on May 13, 2022, by the NTIA.  The guidance issued by these agencies, particularly RUS and Treasury, are giving cities and states across the country the authority and ability to both limit projects to fiber broadband networks and permit the building of GSNs or GONs when there are already several high-speed broadband providers available.

Congress intended for the BEAD program to be used to help bridge the digital divide by giving states the ability to deploy broadband in unserved communities.  While the NOFO issued by the NTIA is not a rule, many states and localities will consider these as requirements and forgo any alternative technology to fiber, which will make it risky, difficult, and expensive to reach many truly unserved areas of the country, especially rural communities in remote or more mountainous areas where the distance or terrain makes fiber deployment nearly impossible to achieve.

While federal agencies may say that their funding guidance is just that and states and local governments that are applying for the grants or loans are not required to follow their recommendations, many will consider these recommendations as requirements, and push for fiber deployment, even when such deployments will not serve the needs of their communities.

In Maryland, the state provided more than $10 million in broadband funding for two private companies that already serve Charles County to build out broadband to currently unserved rural areas.  Virginia’s Telecommunication Initiative (VATI), which works out of the broadband office in the Department of Housing and Urban Development, requires that funds are to be used solely for unserved areas in a technology and vendor neutral manner, and can be accessed through public-private partnerships.  However, other areas of the country, like Knoxville and Lenoir City, Tennessee, are funding exclusively government-owned fiber networks that will end up leaving rural residents firmly ensconced in the internet void.   As other states seek ways to connect the unserved, they should emulate what Maryland and Virginia are doing to ensure that their broadband funding programs provide the best possible outcome for unserved communities and taxpayers.

With hundreds of billions of dollars at stake, federal agencies should be providing a single set of rules, regulations, and guidelines for broadband funding that are vendor and technology neutral.  If the technology is limited to fiber and the speed is limited to 100/100 Mbps, there is no doubt that money will be wasted and Americans who are not connected today will not be connected in the future, while those who already have service will be stuck paying for dark fiber funded by state and local governments.  Such restrictive requirements will exacerbate rather than close the digital divide.

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