The American Rescue Plan Act (ARPA) includes up to $350 billion in funding to be distributed to the states for a variety of projects, broadband included. Rules for how that funding can be allocated are being finalized through the Treasury Department with some potentially disruptive competitive implications for rural broadband.
The Treasury Department published “interim final rules” in May, with some very interesting guidelines. The rules call for funding projects that provide at least 100 Mbps symmetrical service, with some exceptions allowing for 100/20 Mbps service.
A more interesting aspect is how the rules define underserved markets, which the funding is designed to support. The funding will support projects that bring broadband to locations that currently lack access to wireline delivered service of at least 25/3 Mbps. The keyword here is wireline.
By this strict definition, the ARPA program could fund projects that overbuild territory currently served by fixed wireless providers who are delivering 25/3 Mbps or better (or worse). There are over 1,000 WISPs in the U.S., serving primarily rural territories with fixed wireless access.
This could make for an interesting situation. Will WISP competitors seek ARPA funding to overbuild existing WISP markets, even if those WISPs are already delivering 25/3 Mbps broadband service? This has caught the attention of WISPA, the trade group representing the WISP industry.
“You are correct on the implications, which are very concerning for small WISPs already in the marketplace offering FCC-defined broadband,” said Mike Wendy, Director of Communications for WISPA in a statement to Telecompetitor. “We do not know if this is an oversight – which is legitimate given the speed at which this plan emerged, and that it did not come from the expert agency, the FCC – or if it is the aim of the program. But, overbuilding is wasteful, harmful and, in the end, doesn’t solve the challenge – which is getting all Americans online so they can live better lives.”
It’s not just traditional WISPs at risk either. Plenty of small rural wireline carriers also utilize fixed wireless in some of their markets. Those individual markets could be targeted by a competitor, with assistance from ARPA funding. Additionally, DSL markets that don’t deliver 25/3 Mbps could also be targeted under these rules.
The ARPA rules haven’t been finalized yet. There is still another round of comments to be reviewed, with mid-July as the deadline. But in an apparent sense of urgency to get funding out the door quickly, some funding will be distributed prior to the final rules being published.
This situation highlights challenging issues for broadband public policy and the federal and state regulators who must govern it. Issues of technology neutrality, accurate broadband access data, adequate broadband speed definitions, and more, all hang in the balance of a very high stakes game.
Tens of billions of dollars in funding are at stake (and not just with ARPA), as is achieving the the goal of bringing high quality broadband to everyone, regardless of where they live and work, or what they can afford. And there is no shortage of opinions among many well entrenched special interest groups, most of whom bring strong arguments that aren’t all aligned with each other. It should make for an interesting few years.