How State Broadband Offices Are Spending Federal Funds

For state technology leaders, the Infrastructure Investment and Jobs Act marks a unique opportunity to move the needle on broadband availability and accessibility.

State CIOs and others in state government tasked with promoting connectivity are looking to the $65 billion earmarked for broadband as a key means to help bring affordable Internet to all Americans.

Every state will get $100 million to spend on broadband once the money starts flowing, and while the final formulas haven’t been worked out, many states expect to receive significantly more over time. Executive director of the ConnectMaine Authority Peggy Schaffer has heard estimates as high as $300 million or more for her state’s piece of that pie. “It’s a significant amount of money for the state,” she said.

Experts say that the infrastructure spending could go a long way toward closing connectivity gaps in underserved communities.

“Access is fundamentally a capex problem: Capital markets are not going to pay to build out broadband networks in places where there’s no return on that investment,” said Blair Levin, a nonresident senior fellow at Brookings Metro. “Congress has fundamentally solved that capex problem. With all the money flowing in, it should be enough.”

But money is only the starting point, Levin added. Challenges lie ahead for state technology leaders as they seek to put that money to work in the most effective ways possible.

“When the federal government writes a billion-dollar check for roads to, say, the state of North Carolina, that state has a department of transportation with a well-established process. They know what they’re doing, they’ve done it a million times,” he said. Even in the states that have dedicated broadband offices, there’s no equivalent bureaucratic infrastructure in place. “There is no broadband department in any state that has a comparable experience taking large checks from the federal government and deploying that money to build a broadband network.”

It’s no small thing to spend $100 million in public money. Across a range of states, broadband leaders within government say they’ll need to ramp up their efforts in order to both meet the challenges and embrace the opportunities presented by the new infrastructure funding.

Scaling Up In Maine

Maine’s broadband office, the ConnectMaine Authority, has been operating on a budget of about a million dollars a year since 2007. In response to COVID-19, CARES Act money added $6 million to the pot, and a state bond issue made another $15 million available, Schaffer said.

The jump to $100 million (and more) will require her to dramatically scale up those efforts.

“Right now, we have three people in this state that are working on this,” she said. That’s not many, considering the task at hand. To bolster her efforts, Schaffer is communicating with local authorities in order to understand specific needs, and also leveraging the carriers’ expertise in order to chart a path forward. “There are lots and lots of moving pieces here, and a lot of what we are doing right now is figuring out how to mesh all these moving pieces into a comprehensive plan.”

That plan will need to include a focus on equity. “There’s a requirement that most of this money go to the worst-served first. That means we need to have a much deeper understanding of who really is unserved, and also what the cost is for bringing service there,” she said.

To that end, the agency has already engaged with a contractor to develop a broadband intelligence platform — “essentially, it’s maps on steroids,” Schaffer said — in order to understand exactly which areas are underserved when it comes to broadband.

She’s also scaling up her efforts to evaluate competing approaches to broadband deployment. “This is tax money, and it’s important that we really understand what that value is,” she said. That value proposition will depend in part on the state’s ability to deliver broadband solutions that can stand the test of time, Schaffer said. That means her office won’t just be coordinating broadband grants but will also be taking a deep dive into the kinds of solutions on offer.

“We should be building out this infrastructure once. We shouldn’t have to go build this out again, at least not for a long time,” she said. “That means we invest in infrastructure that can be scaled. Whatever we hang on the poles, whatever we bury in the ground — once that is done, we should be able to just switch out the electronics later on in order to make the service better.”

As that vision starts to come together, Schaffer expects to have a relatively free hand in bringing it to life. The state’s broadband authority is quasi-independent, and thus not subject to the usual hurdles that can slow government action.

“That means we can add headcount, we can add people without having to go through a state budget process. We can set up our own procurement and our own purchasing policies,” she said. “We work very hard to keep them as close to the state policies as we can, because the state processes are time-tested and true. But it means we don’t have to go through that bureaucracy within state government to get our stuff done.”

As she scales up her efforts in anticipation of accelerated spending, Schaffer said that she — like others in her position nationwide — will be looking to the National Telecommunications and Information Administration (NTIA) for guidance and support. Ideally, she’d like to see NTIA templatize the broadband grantmaking process.

“We’re all going to be going through the same steps, so instead of each state trying to figure out this on our own, let’s figure it out on a national scale and then have states pick and choose from this menu of things that they can use to beef up their program,” she said.

A Big Boost In Utah

The infrastructure funding “is going to be very significant, it will really help a lot,” said Rebecca Dilg, director of the Utah Broadband Center. In addition to funding new connectivity, she noted, the infrastructure money will pay to upgrade decades-old DSL lines to populations that have long suffered from slow Internet connections.

Dilg will be looking to build on the success of a state broadband grant program that came into being in order to facilitate COVID-19 relief spending made available both through the state Legislature and the CARES Act. Those same processes that have helped extend broadband to the borders of Idaho and Wyoming, and have increased access to public Wi-Fi, now can be leveraged to get the federal infrastructure money flowing.

“We have designed this grant program, we’ve tested it out,” she said. “The feedback I’ve received so far is that the grant program is really good, that we’ve done a good job.”

Even with that foundation in place, Dilg said she expects to have to leverage alliances outside of government in order to put the infrastructure funds to use effectively.

“Many of the states only have one person in their office, and that’s where I’m at right now: one person and a part-time assistant,” she said. “But that’s not to say I have been left completely alone. We have our Department of Transportation, and we have the state’s education and telehealth network. We will be working in partnership with each other, and with the providers, in order to extend this out into the communities.”

The communities themselves will also play a role in helping to shape the broadband grant program. In particular, Dilg will be looking to local leaders to help pinpoint the areas of greatest need. And along those same lines, she’s also working with the state mapping agency and with an outside provider to run speed tests on existing broadband networks.

“It’s really important that our maps are not based just on what the broadband providers submit,” she said. Speed testing “will provide another layer of accuracy. It will help us to verify the speeds people are actually getting, proving that the providers are actually serving the area as they say they are.”

At the same time, Dilg is focused on using this opportunity to address inequities in broadband access. She’s working in close cooperation with the National Digital Inclusion Alliance to address this piece of the puzzle, and also with a state digital access coordinator (a recently created position).

“How are we connecting people who can’t afford it? Do they have the devices in their homes that they need? That’s not something that necessarily would come directly out of my office, but I’m going to oversee or help coordinate that,” she said.

She’ll also be looking to private players to help the state meet its equity goals. Past experience has shown her that carriers are ready to meet that call.

“During COVID, we had two families in a very rural area,” she recalled. They needed broadband access so that kids could get their homework done, and a local provider stepped up to build the needed tower, even though there was no financial return on the investment. “They said: ‘Well, we didn’t make anything on this one, but that’s where we are.’ It shows that we have partners who are very committed to our communities.”

A Running Start in Maryland

While some are starting from scratch on their broadband efforts, and others are expanding upon CARES Act grantmaking processes, professional engineer Kenrick Gordon says he’s got a running start on the coming infrastructure windfall.

“I started working in this field for the U.S. Department of Agriculture in 2008, working on their ReConnect Program,” an effort to bolster rural broadband access, he said. “I handled 11 projects with about $250 million in funding over the course of about five years. I learned a lot from that, and I bring that knowledge to this job.”

Based on that experience, and what he’s seen in his role as director of the Maryland Office of Statewide Broadband, Gordon thinks that first $100 million will be a good start, but only a start.

“I’ve seen numbers thrown around, $200 million to $400 million. That’s getting closer. It’s all dependent on the FCC’s mapping, which hasn’t been finished yet. But an additional $200 million would really put us where we need to be,” he said. (For more on broadband mapping efforts, see Make Me a Map, p. 22.)

The state has already put some $400 million in American Rescue Plan money toward broadband, and Gordon anticipates the new infrastructure funding will support efforts already underway.

“We will continue our program of going after those houses that do not have a wire at the street, the unserved based on access,” he said. “The initial $100 million will probably go toward those areas first. Once we’ve solved the unserved problem, then we start looking at the underserved: people who don’t have access to broadband, those who have access to slower broadband and community anchor facilities that don’t have service.”

As spending ramps up, he’ll be working to ensure that equity and inclusion drive the effort.

“This is about making sure that every household can afford broadband, that every household has a device to operate, that every household understands broadband and how to utilize it — how to do their online banking, how to do online job searches,” he said.

A model for this is already in place. The state has been subsidizing connectivity for low-income households, piggybacking on an existing federal subsidy. The infrastructure funding could further support such efforts, along with projects that extend or accelerate Internet in underserved areas.

As with other state-level leaders, Gordon anticipates working in close cooperation with financial and community-development experts in state government in order to coordinate the broadband grantmaking effort.

Technology leaders “don’t need to get down into the minutia of exactly how this all works. But we do have to understand it well enough to look at a grant application and understand what they’re going to do, how they’re going to do it, what it’s going to cost,” he said.

To that end, “we will borrow from other divisions, using them for knowledge where needed,” he said. “There are certainly people within the Maryland state government that we can reach out to and get our questions answered.”

He’ll also be looking to leverage insights from those closer to ground level. “We have very good relationships with the CIOs within the counties,” he said. “We will be reaching out to them to make sure that we’re on track with what our counties need.”

When it comes time to actually spend that $100 million, plus however much more, Gordon has a simple strategy. “You don’t write giant checks. When we do an award, we provide our funding on a reimbursement basis,” he said. In order to get paid, “the Internet service provider has to actually build something that’s tangible, that we can look at.”

Gordon’s USDA experience gives him a head start here, as does the fact that Maryland already has in place an active broadband office — something he says everybody needs.

“When the infrastructure money comes, we’ll just continue with the same organization we have now,” he said. “The states that don’t have broadband offices set up yet are the ones that are probably going to suffer the most for this. For the 50 percent of the states across the country that lack broadband offices, they’re going to be playing catch-up.”

Moving Forward

These state-level leaders all agree that the infrastructure funding, whatever the dollar amount turns out to be, will give their efforts a massive boost.

That’s the good news, and it is very good news. Federal spending on this scale will enable states to incentivize carriers to build long-term solutions that help to close the gaps in availability and access.

Much work lies ahead, however.

“There’s the mapping element, collecting data to get a broader understanding of where unserved households are located,” said Anna Read, senior officer of the Broadband Access Initiative at Pew Charitable Trusts. “There’s an element of local engagement, working with communities to understand what service looks like locally, where they have gaps.”

There will be future rule-making around how various projects are to be prioritized and scored. “And there will be all of the decisions around how that funding gets out the door, how it is tracked and monitored to ensure accountability,” she said.

As that process unfolds, state leaders will need to be working with a big-picture vision in mind.

“A one-time cash infusion in the absence of a long-term operational plan creates temporary solutions or temporary relief,” said Ryan Oakes, global managing director of Accenture’s Public Sector practice. “It’s so important, when we talk about this broadband investment, that we really take a hard look not just at what are we trying to achieve in terms of affordable access, but also how are we creating the economic model that works for the providers involved, so that this becomes a long-term part of the model in our country.”

With this much money on the table, some experts say, it will be important for state technology leaders to talk among themselves, and also to actively engage with all the relevant stakeholders.

“There will naturally be a debate on the most good done by these dollars … and what manner of public/private partnership should emerge from this effort,” said Ian Greenblatt, who leads J.D. Power’s Technology, Media and Telecommunications research.

“Healthy debate and ambitious plans will go a long way toward eliminating the broadband access gap, ensuring nearly each and every American has robust broadband sufficient to participate in the post-pandemic digital economy for the foreseeable future,” he said.

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