Just days after Republicans and Democrats reportedly reached an agreement to allocate $65 billion for broadband infrastructure as part of broader infrastructure investment legislation, Blair Levin, senior fellow of the Metropolitan Policy Project and Washington D.C. insider, shared what he has been hearing about how the money would be allocated.
The majority of the proposed $65 billion in broadband infrastructure funding– $40 billion – would go to the states and would be used primarily toward bringing broadband to unserved areas but with some flexibility in how the funding is used, he said. Fifteen billion dollars would go to the USDA ReConnect program, which also funds rural broadband deployments. The remaining $10 billion would be equally split between a bond program to fund public/private broadband partnerships and a digital equity program aimed at increasing broadband adoption.
Levin made his comments on a webinar organized by ACA Connects, an association representing smaller, largely rural cable broadband providers. Telecompetitor readers may recognize Levin as the person who led FCC efforts to create the National Broadband Plan just over a decade ago.
Ross Lieberman, senior vice president of government affairs for ACA Connects and another Washington insider who participated on the webinar, said he has been hearing much the same allocation plan that Levin referenced but cautioned that the plans “are not set in stone.”
The ACA Connects webinar was titled “Conversation on Broadband Infrastructure Issues and Opportunities for the Biden Administration and Congress.”
FCC Role in Broadband Infrastructure
Perhaps surprisingly, the government agency that to date has had the greatest responsibility for administering rural broadband programs – the FCC – does not play a role in federal legislators’ plans for the $65 billion as currently envisioned.
Some comments from Levin offered insight on why that might be true.
There is a feeling that Congress “can’t trust the FCC,” Levin said. The feeling, he said, stems from issues that have arisen involving the Rural Digital Opportunity Fund (RDOF) program, which used a reverse auction to tentatively award over $9 billion toward rural broadband. In the auction, funding for an area went to the company that committed to deploying broadband for the lowest level of government support, with a weighting system favoring bids to deploy higher-speed, lower-latency service.
Levin cited two execution problems with the auction. One is that the commission didn’t have detailed information about where broadband was and was not available, making funding difficult to target. The second is that companies were allowed to bid after submitting only a short-form application, which didn’t provide the opportunity to thoroughly screen participants until after the auction was completed.
Because of these issues, Lieberman sees a preference on the part of legislators for using a grant program to award funding rather than using a reverse auction. The USDA ReConnect program uses a grant approach and that could explain why Congress reportedly is considering using USDA to administer any new federal rural broadband funding program.
Meanwhile, individual states – with the exception of New York – have no experience in using reverse auctions to award broadband funding and if indeed Congress ultimately awards $40 billion in rural broadband infrastructure funding to the states, it would seem that the states would be most likely to also use a grant program to award funding.
Levin noted, though, that a hybrid approach using a combination of grants and a reverse auction might be another option for the states.
The discussion about the proposed $65 billion broadband funding comes not long after ACA Connects issued a report showing that it would cost over $106 billion to $179 billion to make “future-proof” networks available to all locations that don’t have 100/100 Mbps service available to them.