Research from Pew examines state broadband grant programs

In new research, Pew Charitable Trusts looks into how states across the US are using grant funding to expand broadband access and services – and how prepared they are to apply for their share of the $65 billion allocated for broadband in the Biden administration's infrastructure package.

One of the studies, released today, explores the ways states have structured their grant program funding, eligibility and objectives, and some of the differences between them.

According to Pew, as of fall 2021, "44 states had established grant programs to cover the costs of broadband deployment in areas where it would otherwise not be economically feasible." And in 2021, "state appropriations for high-speed internet deployment ranged from $500,000 in Montana to $100 million in Iowa and Tennessee."

According to Pew, 44 states had established grant programs for broadband as of fall 2021.
(Source: Pew analysis of state data. This data is current as of Nov. 1, 2021. Click here for an interactive version of this map.)

As Pew notes, the programs "differ in key ways that reflect states' varying policy priorities, funding levels, and local contexts. Which areas or providers are eligible for funding, how the money is allocated, and how states incorporate priorities such as affordability and adoption determine how and where broadband gets deployed."

For example, Pew points out that many state grant programs require the grant recipient to match the funding. "However, when match requirements are exceedingly high, they can be difficult to meet for communities most in need of grant funding, such as those in rural and low-income areas," writes Pew.

"To address this concern, some states use sliding scales for match percentages to ensure consideration of projects in areas that cannot raise substantial matching funds. For example, California uses a baseline of 60% grant to 40% matching funds, with a sliding scale up to 100% grant funds."

Another grant program caveat that Pew points to is a difference in how some states define broadband speed. For example, "Missouri, Florida, and Oregon define unserved areas as those without access to speeds of just 10/1 Mbps," writes Pew. (The FCC defines broadband as 25/3 Mbit/s.)

"Defining unserved areas at lower speeds excludes communities where internet service exceeds the definition but is inadequate to meet modern needs and leads to funds being invested in networks that are not scalable to provide the faster speeds that people will need in the future," says the Pew report.

Stuck in the middle mile

One ongoing sticking point for state-level broadband stakeholders is middle-mile funding.

"The biggest challenge for Alaska is what we call middle-mile intrastate connectivity," Wanda Tankersley, chief operating officer at Matanuska Telecom Association (MTA), told Broadband World News in an interview in September for The Divide podcast. With most Alaskans not connected to the state's road system, building middle-mile connectivity is "a tough business case."

While Pew's research reveals that most state grants specifically fund last-mile projects, it also points to states like Minnesota and Colorado where localities are allowed to use grants for middle-mile infrastructure, "but generally only where additional middle-mile development is necessary to make a last mile project viable."

To address this challenge, the $65 billion broadband bill includes $1 billion for a new middle-mile program, to be overseen by the National Telecommunications and Information Administration (NTIA).

Discussing the subject during his recent confirmation hearing before the US Senate Commerce Committee, Alan Davidson – Biden's pick to head the NTIA – called a lack of high-capacity middle-mile networks "an Achilles heel" for communities that are unserved and underserved by broadband. He further said, if confirmed, he would prioritize implementation of the new middle-mile funding.

"Investment in middle mile can be a force multiplier for us. It can make it easier to serve communities, it can make it cheaper, and it can also help us with our resilience," said Davidson. "This is a huge area where a little bit of federal investment can go quite a long way."

Funding deluge

Going into 2022, state legislatures will need to prepare plans for the federal government on how they will spend their share of broadband funding from the Infrastructure Investment and Jobs Act (IIJA), over which Commerce Secretary Gina Raimondo has promised to exercise "tremendous oversight."

According to Anna Read, senior officer for the broadband access initiative at Pew Charitable Trusts, the work that states have done over the last several years – accelerated by the COVID-19 pandemic and related federal funding unlocked through the CARES Act and the American Rescue Plan – has helped prepare many of them for this moment.

"Several states that had not had active programs did create grant funds and were able to put a portion of their funding towards broadband infrastructure on a fairly tight timeline," said Read in an interview with Broadband World News. "States have been making good progress in this area and are, by and large, well positioned to make use of the currently available federal funding."

Related posts:

• Commerce Sec promises Fed oversight on state broadband plans
• Senators press Sohn, Davidson on how they'll implement broadband bill
• US House passes Biden's infrastructure bill with $65B for broadband
• Funding programs have shrunk US digital divide by less than 1% – report
• Podcast – The Divide: Pew's Anna Read on state efforts to close the gap

— Nicole Ferraro, site editor, Broadband World News; senior editor, global broadband coverage, Light Reading. Host of "The Divide" on the Light Reading Podcast.