States Plan for Key Role in $42.5B Broadband Program

The infrastructure law’s $65 billion for broadband includes $42.45 billion for NTIA grants to states. BEAD will send at least $100 million for each state and $20 million per territory for expansion or affordability. States can get more, “allocated by need, primarily based” on unserved numbers, said an NTIA fact sheet. The law prescribes a formula, requires NTIA to base unserved designation on new FCC broadband maps, and gives NTIA 180 days to issue a notice of funding opportunity, said an agency spokesperson, adding NTIA is working to release a request for comments soon.

States’ bigger role is welcome, said Michigan Lt. Gov. Garlin Gilchrist (D) and Florida Sen. Loranne Ausley (D), co-chairs of progressive NewDEAL Forum Broadband Task Force. Some past support mechanisms sent money to industry. “Everybody is not yet connected, which means that we need more people and more collaborators at the table, including the state,” Gilchrist told us. States know best because they’re close to the problem, said Ausley in a separate interview.

Gilchrist said $100 million could be “transformational” for Michigan, bringing fast connections to 400,000 Michiganders in rural, urban and suburban communities. Michigan established a High-Speed Internet Office this year that will be the state’s single point of contact, he said. Expanding broadband is “important and urgent,” said Gilchrist: “We want to be smart” and “move responsibly” but also quickly. Michigan will closely watch NTIA to see how much money it can get beyond the base, said Gilchrist. “We will be offering input and suggestions ... about how those resources can be most effectively invested here. ... We’re certainly advocating for everything we can get.”

“This is critical funding,” agreed Ausley, who represents 10 rural counties. Considering state legislators “passed a grant program last year and did not fund it at all, $100 million would go a long way.” She expects Florida will get more given its population. State spending will probably be directed by Florida’s broadband office, which should complete a state map by June, she said.

State Leaders

States are “identifying their process and policy needs to take full advantage of the bill and we will have a better sense of their directions as more guidance is released,” emailed a National Governors Association spokesperson: Many governors “are actively building broadband program capacity in their states, appointing broadband leaders, creating and expanding broadband offices, and implementing the governance structures needed to ensure that dollars are deployed effectively."

Louisiana’s broadband office plans to use its $100 million to bolster existing unserved support, Office of Broadband Development and Connectivity Executive Director Veneeth Iyengar told us. Gov. John Bel Edwards (D) in February appointed Iyengar head of the state broadband office, established in 2020. In November, it opened the first application period for a $177 million grant program using Coronavirus Capital Projects Fund support, Iyengar said. That combined with infrastructure dollars and Rural Digital Opportunity Fund money could help Louisiana reach most of its unserved population, he said. While expecting to comment at NTIA, the state official doesn’t expect overly prescriptive rules based on CPF experience.

With many unknowns about BEAD, the Colorado Broadband Office (CBO) is focused on using CPF support for immediate needs, emailed Colorado Chief Information Officer Anthony Neal-Graves: BEAD later can help in long-unserved areas. CBO expects to comment at NTIA as it awaits guidance, while the governor will decide which state body will direct funding, he said: The CBO, codified this year to coordinate broadband strategies and programs, will support that decision and lend its expertise.

Colorado’s two grant programs for last- and middle-mile infrastructure spent about $100 million over the past seven years, noted Neal-Graves. “To have this level of funding come all at once is an incredible opportunity that has the potential to create real change for our citizens.”

Impact

“This is so much larger than what the states were doing themselves,” said New Street analyst Blair Levin, former FCC national broadband plan architect. Each state has at least $200 million if one includes support from other recent federal funds, he said. “In the past, the states were competing against each other for very limited funds,” but with BEAD, states “are the decision makers” that will develop plans and determine how to handle grants, said Levin: Feds will check states’ work, but it’s “really up to the states.”

Even for states that spent big on broadband over many years, $100 million is “a large investment” that can “accelerate that progress,” said Pew Charitable Trusts Broadband Researcher Anna Read. She expects states to prepare by expanding internet-specialized staff and establishing broadband offices, if they don’t have them already, she said.

Many states are now in “planning stages,” said Coralette Hannon, AARP senior legislative representative. Various state bodies could get involved, including the governor, broadband offices and utility commissions, she said. States will play a key role ensuring “money is used effectively” and “targeted to the most-need communities and for the most-needed purposes,” Hannon said: The law doesn’t require states to dispense money quickly, so “I hope that they take it seriously and plan for it.”

Don’t expect to see states “tussling with each other” over who gets extra cash from NTIA beyond the $100 million as there “seems to be plenty of money available,” Hannon said. Others noted the law has a formula.

Impact “could be tremendous,” depending on how NTIA and states handle distribution, said University of Florida Public Utility Research Center Director Mark Jamison. Government officials should think in terms of what needs to be done and what potential recipients need to do to “earn” support, he said: Create a competitive framework and hold recipients accountable. States should urge NTIA to at least give flexibility to design reverse auctions, said Jamison, who is also an American Enterprise Institute visiting scholar.

Process Questions

Much is to be determined about how the government will distribute and use money, said Read: NTIA will answer some questions; states’ initial and final plans will answer others. With recent COVID-19 relief, state broadband offices or high-speed internet fund administrators were often the entities responsible for making grants, she said. The law set speed and reliability metrics and required priority for unserved areas, then underserved areas and anchor institutions, she said: While NTIA will use the FCC’s map, states might later consult their own maps.

A big question is how much NTIA will "straightjacket states” versus provide flexibility, said Internet Innovation Alliance co-Chairman Bruce Mehlman. Feds will want to set high standards, maximize fairness and consistency, and incorporate various policy goals, he said.

Levin expects governors to seek maximum flexibility from NTIA. Most states by now have formed broadband entities for the purpose of distributing funds, and some big states like California and New York have spent large amounts already, he said. Most legislatures probably won’t need to act to get money out, though state laws may vary, he said.

“If a state is determined to give these grants to giant ISPs,” it can “maneuver within the rules to do so,” but so can states that don’t want to, CCG Consulting President Doug Dawson blogged last week. Many states may not be ready, he said, because they “only recently started to form state broadband offices, and the size of these grants and the sheer volume of paperwork will overwhelm the people who award grants.”

Local Role

While BEAD “grants an enormous amount of discretion to the states,” NTIA should ensure localities are “meaningfully engaged,” said Angelina Panettieri, National League of Cities principal associate-technology and communications. The agency could mandate that states talk to localities, she said.

NTIA should seek to “minimize friction loss” in distributing broadband dollars from the recently enacted infrastructure bill by directing state money to regional groups with existing plans, such as the two 11-year-old consortiums in Southern California, rather than always sending it through state capitals, said California Emerging Technology Fund President Sunne Wright McPeak: The infrastructure law gives NTIA leeway to take such an approach.

State and local involvement is critical because the “best infrastructure program needs to understand the specifics of the region,” including geography, demography and existing competitive offerings, said Mehlman.

Louisiana’s broadband office works closely with localities because challenges vary from parish to parish, said Iyengar. Broadband execution success, he said, “is going to largely depend on locals.”