Several US government agencies have had a busy week handing out broadband funding to ISPs and state governments. Today, the FCC announced $791.6 million for six broadband providers, covering network extensions to more than 350,000 homes and businesses in 19 states. The ISPs will receive the money in 10 years.
“This funding round will support projects leveraging a range of network technologies, including hybrid fiber/fixed wireless gigabit services that will provide end-user sites with fiber or fixed wireless network service using licensed spectrum,” the FCC said. Funded ISPs include Nextlink Internet and Starry.
Separately, the Treasury Department and the National Telecommunications and Information Administration (NTIA) announced new subsidies for states and tribal entities this week (more on that later in this article).
The FCC actions are final approvals for grants from the Rural Digital Opportunity Fund (RDOF), which were provisionally awarded in December 2020 through a reverse auction in which ISPs bid for grants organized by census blocks. The auction was mismanaged under the leadership of then-chairman Ajit Pai, leading Chairman Jessica Rosenworcel to announce a major clean-up in July 2021 amid “complaints that the program was poised to fund broadband for parking lots and well-served urban areas.”
$6 Billion Approved Despite Starlink Rejection
The FCC rejected SpaceX Starlink’s final application a few weeks ago to receive $885.51 million, tentatively awarded in the Pai auction. While the Pai FCC has been criticized for giving money to Starlink for locations at or adjacent to major airports, the Rosenworcel FCC also questioned whether Starlink’s technology can meet the funding program’s speed and latency requirements when deployed to hundreds of thousands of customers.
The FCC also rejected preliminary funding from LTD Broadband, a fixed wireless network provider of more than $1.3 billion. Before finalizing funding, the FCC says it will review each application “to determine whether they met all legal, financial and technical requirements.”
Despite the high-profile rejections, the FCC said today that the RDOF will now provide more than $6 billion to applicants in 47 states. The Pai FCC originally awarded $9.2 billion to 180 bidders.
The new funding round goes to NextLink Internet (aka AMG Technology Investment Group) in Illinois, Indiana, Iowa, Kansas, Louisiana, Minnesota, Nebraska, Oklahoma, Texas, Wisconsin and Wyoming; GeoLinks in Arizona and Nevada; Starry (aka Connect Everyone) in Alabama, Arizona, Colorado, Illinois, Nevada, Ohio, Pennsylvania, and Virginia; GigaBeam networks in West Virginia; Safelink Internet in Nevada; and Shenandoah Cable Television in Virginia.
To confirm funding, the ISPs must file letters of credit and a bankruptcy code by September 15. GeoLinks, Starry and Shenandoah Cable Television won’t get everything they originally won in the reverse auction, as the FCC also announced today a list of counting blocks where those ISPs have defaulted on bids. Monster Broadband has also defaulted on bids.
Treasury and NTIA Financing
The FCC’s RDOF relies on the Universal Service Fund, which is paid by Americans through fees on phone bills. In contrast, the NTIA funding announced this week was allocated by Congress and President Biden in the Infrastructure Investment and Jobs Act of November 2021.
The NTIA, which is part of the Commerce Department, yesterday announced $105.8 million in broadband deployment grants to five Arizona Tribal entities that will connect more than 33,300 homes. In conjunction with other projects previously approved in August, the NTIA has awarded $634.7 million to 25 Tribal entities.
The Treasury Department yesterday announced five newly approved broadband projects that will be funded by the American Rescue Plan’s Coronavirus Capital Projects Fund. That includes $47.5 million to connect 5,500 homes and businesses in Arkansas; $40.8 million to connect 10,000 homes and businesses in Connecticut; $187 million for 50,349 homes and businesses in Indiana; $87.7 million for 21,000 homes and businesses in Nebraska; and $45 million for 3,965 homes and businesses in North Dakota. Four of the states plan competing grant programs to distribute the money, while North Dakota “plans to partner with tribal organizations to find solutions to specific connectivity needs.”
The Treasury Department previously approved broadband projects from the same fund in eight other states. All providers who get the money must participate in the FCC’s Affordable Connectivity Program, which provides households meeting income requirements up to $30 per month (or up to $75 on Tribal lands). This provides free internet for many people.
$42.45 Billion Fund Coming Later
The largest broadband fund of all is the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) program of the Infrastructure Investment and Jobs Act, but it’s on a longer timeline. That money is being distributed by the NTIA, but it won’t be released until after the FCC completes a major project to upgrade the map of where providers do and don’t offer broadband. Rosenworcel has said the new card will be ready this fall.
To help states prepare, the NTIA distributes planning grants. All 50 states and six territories applied, and Louisiana became the first to receive one, according to an NTIA announcement today. Louisiana’s $2.9 million grant will help it, among other things, identify unserved and underserved locations, conduct community outreach, train employees, conduct surveys “to better understand barriers to adoption” and to develop a statewide Digital Equity Plan.
“In the coming weeks, every state and territory will have funding on hand as they begin building grant-making capacity, assessing their unique needs, and working with diverse stakeholders to ensure no one is left behind,” Commerce Secretary Gina Raimondo said.
