12 Nov 2024

Digital Opportunity Grant Program (FY25)

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Missouri’s Digital Opportunity Grant Program (FY25) will fund digitally inclusive projects across the state. The statewide component of the program will fund service areas encompassing 20 or more counties and will be complemented by the local component, which will fund digitally inclusive projects in service areas encompassing fewer than 20 counties.

The following types of entities are eligible to receive funds from the program, providing the proposed project meets other requirements in the Guidelines:

a. Community anchor institutions;
b. County and municipal governments;
c. Local educational agencies;
d. Nonprofit organizations;
e. Organizations that represent:

i. Individuals with disabilities, including children with disabilities;
ii. Aging Individuals;
iii. Individuals with language barriers, including individuals who are English learners and/or have low levels of literacy;
iv. Veterans; and
v. Individuals who are incarcerated in the State (excluding Federal correctional facilities).

f. Civil rights organizations;
g. Entities that carry out workforce development programs;
h. State agencies responsible for administering or supervising adult education and literacy activities;
i. Public housing authorities in the State; and
j. A consortium of any of the entities listed in a through i.

Additional requirements:

a. If the Applicant is a type of entity required to register with the Missouri Secretary of State (SOS) to conduct business in Missouri, the Applicant must be registered and in good standing with the SOS.
b. Applicant has a Missouri Tax ID Number (EIN).
c. Applicant has a Federal Employer Identification Number (FEIN).
d. Applicant has a Unique Entity Identifier from SAM.gov

or is in the process of obtaining one. 
e. Applicant is registered with MissouriBUYS and/or MOVERS (for the State’s accounting system) or is in the process of registering (no payments can be made without being in the system) [3].
f. Applicant is not delinquent in taxes owed to the State of Missouri.
g. Applicant is enrolled in E-Verify and provides a copy of its signed Memorandum of Understanding with the U.S. Department of Homeland Security, as required by § 285.530 RSMo. [4]
h. Applicant is not suspended or debarred from participating in Federal grant programs.

The following are ineligible to apply for the program:

a. Entities that are not listed as eligible in the DEA, as set forth in Section 3.1 of the Guidelines. See 47 U.S.C. § 1723(b)(1)(C); and
b. Applicants that are debarred, suspended, or otherwise ineligible to participate in a Federal award.

Applicants may submit their application via Submittable

during the open cycle.

DED intends to award all funds in one funding round but may hold additional funding rounds to ensure all available funds have been obligated prior to the conclusion of the SDECGP period of performance.

17 Oct 2024

Round 1 of the BEAD Program to Open November 15

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DED’s Office of Broadband Development (OBD) has announced that the first application round for the Missouri Broadband Equity, Access and Deployment (BEAD) program is scheduled to open on November 15, 2024.

Round 1 applications will close at 5 p.m. on January 31, 2025. In response to feedback from potential BEAD applicants, OBD requested and received a variance from the National Telecommunications and Information Administration (NTIA) to allow a longer window for Round 1 applications than proposed in Missouri’s approved Initial Proposal Volume II.

Round 1 BEAD pre-qualification applications are currently open and will close at 5 p.m. on January 16, 2025. Pre-qualification applications will be available for submission during each scoring round and sub-round until 15 days before the round or sub-round closes.

NTIA must approve OBD’s final list of BEAD-eligible locations before OBD can release a final Application Area Map and open Round 1 of the BEAD program. If approval is not received by November 15, the opening of the round will be delayed.

Notifications of further guidance about Round 1 of the BEAD application process and the publication of Missouri’s BEAD Application Area Map will be posted on OBD’s Connecting All Missourians webpage and sent via email to broadband stakeholders. LEARN MORE…

17 Sep 2024

MO DED: Request for Public Input on BEAD Reimbursement Process

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DED is requesting public feedback on options for the reimbursement process for the upcoming Broadband Equity, Access, and Deployment (BEAD) program. The BEAD program will invest $1.7 billion to address infrastructure barriers for unserved and underserved locations throughout Missouri.

The public input survey, linked below, covers multiple aspects of the reimbursement process that will be used throughout the BEAD program’s lifetime. You may provide input through the survey until 11:45 p.m. on Tuesday, October 1, 2024.

Take the survey: https://moexperience.qualtrics.com/jfe/form/SV_26t09YDfmGUaqcC

If you have any comments, questions, or concerns, please contact us at broadband@ded.mo.gov or 573-526-1028.

24 Jul 2024

Digital Equity Competitive Grant Program: Notice of Funding Opportunity Released on July 24, 2024 

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This announcement was worth the wait!  Today, NTIA is proud to announce a nearly $1 billion Notice of Funding Opportunity for the Digital Equity Competitive Grant Program. This is the first funding opportunity from the $1.25 billion Digital Equity Competitive Grant Program, the third of the three Digital Equity Act programs.    Now, non-profits, local educational agencies, workforce development organizations, political subdivisions, agencies, state instrumentalities, Tribes, Alaska Native entities, Native Hawaiian organizations, and other community anchor institutions will be able to apply for Competitive Grant Program funds. Territories are also eligible for funds under this funding opportunity.  These competitive grants will resource initiatives that support populations most impacted by digital divides. Low-income households, older adults, justice-impacted people, people living with disabilities, rural communities, and racial and ethnic minority groups are among the populations served by this program. Additionally, competitive grant investments are an essential complement to broadband deployment strategies.    We need you. NTIA is calling on organizations, large and small, to scale efforts to expand digital opportunities. Your organization’s work to ensure telehealth access, promote skills training, optimize small business connectivity, and various other initiatives enables households nationwide to participate in the digital economy.   Interested applicants are encouraged to act now!  Review the Digital Equity Competitive Grant NOFO and Application Resources. The application deadline is September 23, 2024. Learn about how your state or territory plans to expand digital opportunities at internetforall.gov.  Subscribe to the BroadbandUSA Newsletter to receive NTIA e-mail updates.  Follow NTIA on social media or on our website at www.ntia.gov for information.  Check out the Digital Equity Technical Assistance Hub for application help.  Develop a timeline for completing your application.  Begin gathering partnership letters and authorizations, both written and signed. These letters provide credibility and expertise, and will further your project’s reach. 
  For more information on creating data-driven applications and other Internet for All initiatives, view the following resources:  NTIA Internet for All Digital Equity Page Digital Equity Act Population Viewer
  Register for the informational webinar on July 25, 2024, at 2:00 PM ET. For all other concerns, questions, and resources, please reach out to NTIA at digitalequity@ntia.gov. 
Let’s make “Internet for All” a reality.  
9 Jul 2024

BEAD Pre-Qualification Application Now Available

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DED’s Office of Broadband Development (OBD) Pre-Qualification Application for the Broadband Equity, Access, and Deployment (BEAD) Program is now live. The BEAD Pre-Qualification Application is the first step for potential BEAD applicants.

The Pre-Qualification Application groups all general and non-scored BEAD application requirements into one application, allowing applicants to respond one time for these functions. Pre-Qualification Applications will be applied to each of the applicants’ BEAD Applications. The Pre-Qualification Application must be started prior to filling out BEAD Scoring Applications.

The Pre-Qualification Application includes four sections:

  1. Entity Information
  2. Capability
  3. Public Funding Received
  4. Compliance and Other Program Certifications

Inside these four categories, applicants will provide information such as SAM.gov ID and organizational charts with resumes, financial statements, and certifications to comply with applicable laws. Templates required for certain fields are available for download on OBD’s Connecting All Missourians webpage.

30 Apr 2024

BEAD — Let’s Not Throw Away Our Shot Part 3 – Adoption

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By: Marc McCarty and Meredith Morrison

When COVID-19 was classified as a pandemic in March 2020, much of our normal in-person activity ceased, and was replaced by a new, “online normal.” Even though millions lacked a broadband connection, without question our ability to remain connected played a critical role in maintaining our workforce, healthcare, and educational institutions in the immediate crisis. For example,

  • By May of 2020, 35% of employees worked remotely full-time through online connection.
  • Within the pandemic’s first three months, telemedicine encounters increased by 766%.
  • In 2020, 77% of public schools moved their classes to a  distance-learning format, and 84% of college students reported either some or all of their classes shifted to online-only instruction.

Since the pandemic’s onset, many things have returned to pre-pandemic normalcy, but the increased reliance on broadband remains a permanent feature of our lives.

  • Approximately 13% of employees work remotely (online) full-time, and 28% maintain a hybrid work schedule.
  • Today digital medical consultations are chosen 38 times more often than before the pandemic. In 2023, 37% of mental health visits took place virtually, followed by infectious disease, obstetrics, and transplant consultations.
  • While students and teachers continue to prefer in-person instruction at least for elementary and secondary students, online learning has clearly become a critical component for post-secondary education. Over half of degree seekers take at least some of their classes online, and over a quarter study exclusively online.

Yet full adoption of the applications that rely on broadband to better our lives continues to be a concern, even in communities with access to high-speed internet infrastructure. This blog addresses some key barriers to broadband adoption and like the two preceding blogs, suggests ways Public Organizations can help increase adoption rates in all communities, especially in those now receiving BEAD funding.

The term broadband “adoption” refers to overcoming three main barriers that prevent communities and residents from using available broadband service to their benefit.

  • Convincing skeptics that they need a fixed high-speed internet connection in their home,
  • Overcoming the privacy concerns and the fear of criminal activity on the internet, and
  • Developing the skills needed to use broadband applications effectively.

Convincing the Skeptics

Some may be surprised that in 2024, there is still a need to make the case for fixed broadband. After all, approximately 4 out of 5  households are already connected with some form of fixed broadband at home. It doesn’t seem unreasonable to conclude that just like the voice calling to Kevin Costner in the movie “Field of Dreams” – “if you build it, they will come” – or in this case if you build out the broadband network, folks will quickly subscribe for the service.  

Unfortunately, the truth is a bit more complicated. The most recent NTIA study found that in the households that still lack a fixed internet connection in the home, nearly 6 out of 10 don’t want or feel they need broadband. That percentage dwarfs those who aren’t online because they think it is too expensive (18%) or those who say they would subscribe if service was available (4%).

Overcoming Privacy and Security Concerns

Digital privacy and security concerns also deter millions of Americans from engaging in online activities. The spread of emerging technologies and practices, such as smart home devices and online activity tracking, puts these concerns at the forefront of adoption.  A 2023 public survey of 7,500 Missouri households showed that eight out of ten respondents cited security of their personal information as their top concern of internet adoption, and over half expressed concern about seeing misleading information.

Developing Digital Skills

A high speed internet connection can enable individuals to receive online treatment from their healthcare provider at home; shop for products, pay bills and bank; apply for government benefits; work from home or start an online business. However, the same technology can sow disinformation and mistrust, steal personal financial data, or create an addictive dependency on social media. Whether the internet is used for good or for evil largely depends on whether the users are equipped with the knowledge and the skills to use broadband effectively.

Adoption Is Critical to the Success of the BEAD Program

The percentage of broadband skeptics is particularly concerning because many of those currently disconnected  reside in rural locations destined to receive the bulk of Missouri’s BEAD funding. Of course, how questions are asked can impact the response, but that should not blind us to the need for a concerted effort to make the case for the use of broadband-based applications, along with the practical digital skills training necessary to navigate the internet safely and securely.

Broadband adoption also is critical from a purely economic standpoint. If those most likely to be the beneficiaries of BEAD funding don’t think they need it, or are afraid to use broadband, ISPs face the prospect of low subscription rates in areas that already have far fewer potential subscribers per mile than urban or suburban areas.

Fortunately, these concerns can be overcome. Over half of the respondents to the 2023 public survey expressed an interest in internet training assistance. “Help finding information and resources I can trust” (33%) and “assistance with setting up or using new devices” (28%) were the top two areas.

Public Organizations’ Role in Broadband Adoption

Public Organizations are uniquely situated to provide adoption programs that will address these concerns for many reasons. First, the improvement of the health, education and economic opportunity of their constituencies is the primary mission of most every Public Organization. Second, in many cases Public Organizations have already established a local connection with the community – and specifically with members of the community most at risk of being unable to use broadband-based applications to better their lives.

Finally, for local governments and related nonprofits many of the beneficial aspects of broadband-based applications lie in the ability to deliver better services more efficiently. Those who have learned to use the internet to apply for a permit, paid taxes, reported problems with utility service or otherwise interacted with local government have found the process is faster and more convenient than making an in-person visit or filling out paper forms and submitting them by mail.

In addition to being more efficient, these same technologies can also result in significant cost savings through reduced personnel and processing. However, when many of the most vulnerable lack the skills necessary to use these technologies, much of the benefit is lost, because two processing systems must be maintained, one that operates online, and a second “paper” system that accommodates those who are unable to use the new technology.

Resources for Adoption

There are literally hundreds of Public Organizations that have developed programs designed to address one or more of the three barriers to digital adoption outlined earlier in this blog. Many can be located through Mobroadband’s Missouri’s Digital Asset Map. This resource, created by the UM System at the request of OBD, is designed to allow organizations that offer digital skills to help individuals and communities quickly locate organizations that offer digital literacy programs, such as computer classes, one-on-one technical assistance centers, and bilingual resources.

Each community may have a different set of needs, and not every program will be appropriate for every community. However, each likely will face three questions.

  • What digital adoption programs does our community need most?
  • How can we integrate and coordinate our efforts with programs like BEAD that focus on internet access?
  • How do we pay for digital adoption?   

There are tools available to answer these threshold questions. One is the Digitally Connected Community Guide offered through MU Extension. The Guide leads community stakeholders to develop a shared vision of ways broadband based applications can promote better health outcomes, online learning and education opportunities and economic opportunity in their community. With that vision, stakeholders are then provided tools to approach and engage with ISPs to create a workable written plan that focuses on using new or expanded networks in ways that implement the community’s vision.

But what programs should the community use? This will vary of course depending on the community’s specific needs. Yet ideally, in every case these adoption programs should be offered by a trusted resource, and ideally they should be capable of addressing each individual’s needs through one-on-one instruction when needed.

One idea that has been successfully piloted by MU Extension in select communities is the Digital Ambassador program. This program trains a permanent cadre of local volunteers called – “Digital Ambassadors.” Trained Digital Ambassadors share specialized knowledge with individuals in their community on topics such as telehealth, cybersecurity, social media, applications like Google Docs and Office 365. Additionally, Digital Ambassadors learn practical skills necessary to help individuals set up their internet connection at home and navigate financial obstacles to broadband use, by accessing programs that subsidize internet service or provide affordable hardware. MU Extension plans to obtain funding to expand the Digital Ambassador program to all communities throughout the state.

Funding Digital Adoption Programs

Of course, Public Organizations must determine how they will pay for digital adoption programs if they are to participate with ISPs to create “digitally connected” communities. Thankfully, one new source of funding are federal grants authorized by the Digital Equity Act. Beginning sometime late summer or early this fall, OBD  is expected to begin accepting applications from Public Organizations for up to $14.2 million in grants to pay for broadband adoption programs. Additional funding, expected to total at least $10 million, should be available over the next two fiscal years under this program.

At the same time, this summer the federal government is scheduled to begin awarding up to $1.25 billion of grants through a competitive digital adoption program administered by NTIA. These programs, along with others already in place, should offer every interested community the opportunity to obtain financial support for broadband adoption programs that can complement and support efforts to build and expand broadband infrastructure over the next five years.

Let’s Not Throw Away Our Shot

The common theme running across this series of blogs is that now is the time for action. There has never been this level of financial support at the federal government level for broadband, and there is every reason to believe this investment will not be repeated, at least in our generation. Missouri has received a significantly greater proportion of this federal funding than other states, primarily because we have a greater need. The percentage of unserved and underserved locations in our state has been among the highest in the country, and our economic progress and our quality of life have suffered because of it.

We now have an opportunity to change that. This is our shot – what will we do with it?

8 Feb 2024

Broadband for All — Let’s Not “Throw Away Our Shot!”

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Part 1 – Why the Next Few Months Are Critical

“I am not throwin’ away my shot!” This line, from the musical Hamilton keeps playing in my head as I think about our “once in a generation” opportunity to finally provide everyone in our state high speed internet – broadband.

This is the first of several blogs designed to alert and call on Public Organizations to help make universal access to broadband a reality.  This is particularly true now, as $1.7 billion of federal government funding is about to become available through the Broadband Equity Access and Deployment Act (BEAD) program.

“Public Organizations” include local government, such as county commissions, city councils and boards of aldermen, and school district boards; as well as their partners, chambers of commerce; regional economic development planning commissions and regional councils of government; and civic nonprofits, such as Rotary and Lions Clubs.

While most of the money for broadband infrastructure will be directed to private for-profit internet service providers (ISPs), Local Public Organizations can help ISPs create economically sustainable infrastructure and help communities use this new asset to improve the health, education and economic opportunity, for all residents.

Why Now? Haven’t We Closed the Digital Divide?

As the COVID pandemic set in during 2020, skepticism over whether there was a need for broadband quickly gave way to an understanding that, like electricity and running water, a stable high-speed internet connection provided an essential “utility” for businesses and families. This led to a dramatic increase in promised state and federal  government funding for broadband infrastructure. While some of that government funding has been awarded to ISPs much, much more is only now becoming available.

In late 2021, Congress passed the bipartization “Infrastructure Investment and Jobs Act” (IIJA). That Act authorized over $60 billion of federal funding for broadband access, adoption, and affordability programs. $42.5 billions of that amount is dedicated to broadband access through the Broadband Equity Access and Deployment Act (BEAD) grant program. These laws (and others) have been summarized in several blogs already [here], [here] and [here] When combined with continued support provided by the Federal Communications Commission’s (FCC) RDOF Program and the USDA’s Reconnect Program, the federal government’s promised investment in broadband over the next decade  totals more than $100 billion!

So, “problem solved!” you might think, and certainly this federal funding could go a long way toward providing reliable broadband access to all unserved and underserved locations in Missouri and across the United States. Yet, there is still much more to be done. For example, the nearly $200 million awarded by the State of Missouri during the fiscal year ending June 2023, will provide access to only 8% of Missouri locations that need service.

The largest single federal program enacted in 2021 — BEAD — promises Missouri $1.7 billion of grants to provide reliable and affordable broadband service to every unserved location, and potentially every underserved location in Missouri. However after more than two years, only a small fraction of BEAD funding has been distributed to states.

Although slow, progress, is being made. At the end of last year Missouri’s Office of Broadband Development (OBD) submitted its “Initial Proposal” to the National Telecommunication and Information Agency (NTIA) for approval. The Initial Proposal includes OBD’s processes for identifying projects and distributing BEAD funds. OBD hopes to receive approval of the Initial Proposal by February 18th. Assuming this happens, OBD expects to begin accepting requests for grants this summer and possibly award the first grants this fall.

The timeline depends on NTIA’s approval of the Initial Proposal, and certainly, that timing could “slip.” It is also possible that NTIA may modify some of the details of the Missouri proposal, but the fact remains that after years of waiting, the next few weeks and months likely will determine what locations will receive a share of the BEAD money, and what broadband infrastructure technology will be built over the next five years.

In other words, for communities across the state that lack adequate broadband access, now is the time to become engaged in efforts to finally bridge the digital divide.

What to Expect

The state’s Initial Proposal calls for action to commence immediately following NTIA approval. This will involve two preliminary steps – (1) finalize the locations eligible for BEAD funding and (2) prequalify ISPs that will be eligible to participate in the BEAD proposal and funding process. Following the first two steps, OBD will begin accepting specific proposals for the first of at least two funding rounds. Proposals for round one will ideally be accepted between June 1 – July 31, 2024, with the first awards made by October 2024.

The first round of funding will be designed to favor proposals that connect locations using the fastest and most robust broadband infrastructure — fiber optic cable to the premises (FTTP). The second round of funding will target locations not funded in the first round because they are harder to reach and less economically viable. Other forms of reliable infrastructure, such as cable and wireless connections, likely will be used more for this round of funding. Both funding rounds will be numerically scored, and in each case the amount of BEAD grant funds requested will be a very important, but certainly not the only, factor in determining whether a proposal will be funded.

Identify BEAD Eligible Locations

When NTIA approves the Initial Proposal, OBD will publish its proposed set of eligible BEAD funding locations. Generally funding is available for unserved and underserved locations, determined by the download and upload data speeds, with minimum requirements for latency (the time it takes for a signal to be transmitted and received). This eliminates satellite internet providers. In addition, locations served only by DSL are considered “underserved” regardless of the stated connection speed. Finally, locations already awarded funding under most federal and state programs or otherwise subject to a “binding commitment” to provide broadband service within the next 12 months will not be eligible for BEAD funding.

Last month OBD released its preliminary map of unserved and underserved locations in Missouri. This map, based on the FCC’s FABRIC, is the most comprehensive effort yet to accurately identify locations (homes, businesses and institutions) that should have access to broadband service, locations where ISPs claim to be providing service, and finally the advertised speed of the connection at the location. The preliminary map will be modified by OBD, based on criteria set out in its Initial Proposal (as previously described).

ISPs and Public Organizations will then have at least 45 days to “challenge” the status of a particular location or group of locations based on one of several criteria. These challenges can result in locations being found ineligible for BEAD funding or be reclassified as unserved or underserved. While it is hoped that most of the inaccuracies that plagued earlier FCC maps have been corrected, there likely still will be errors, and this makes participation in the process very important to the overall success of the BEAD program.

ISP Prequalification

Experience has taught OBD the importance of carefully vetting ISPs through a prequalification process before allowing them to submit proposals for BEAD funding. The FCC’s Rural Digital Opportunity Fund (RDOF) Program illustrated the folly of failing to adequately vet participants prior to the competitive bidding process. Many months after preliminary grant recipients were publicly announced, the FCC disqualified two of the largest “winners” of the competitive bidding process because they lacked the technology and/or the financial wherewithal to actually complete the promised projects.

To avoid repeating this result, OBD’s Initial Proposal requires ISPs to prequalify before they can participate in the BEAD funding program. Assuming the Initial Proposal is approved as expected, the Prequalification Process for the first round of BEAD funding is expected to begin on April 17 and close by May 31.

The BEAD Award Process

After establishing eligible funding locations and prequalifying ISPs, OBD will proceed to “round one” of the BEAD awards. During the month of April, OBD will amend its maps to create areas that will be eligible for BEAD funding. These areas will be selected by OBD based on factors such as the location of nearby qualified ISPs and the feasibility of connecting unserved and underserved locations to existing networks.

Approved ISPs will then be able to submit proposals for BEAD funding for any one or combination of these areas, but they must agree to serve every location in the area or areas they have selected. Further, in this first funding round only, proposals that offer FTTP for all locations, will be awarded BEAD funds even if other technologies could provide service at a lower cost, so long as the amount of BEAD funds requested does not exceed a maximum BEAD outlay amount established by OBD.

In the case of multiple proposals for a given area, awards will be based on a numeric scoring matrix, that takes many factors into account. However, three of those factors seem likely to be most relevant. First, the amount of BEAD funds requested (the BEAD Outlay) likely will be very important in determining which ISP receives a BEAD grant. The scoring matrix will favor proposals that request a lower BEAD Outlay. Second, while the BEAD Outlay is important, proposals that offer FTTP rather than other alternate technologies and proposals with shorter deployment times will receive more points. Finally, a substantial number of points will be awarded for proposals that have public support, and this is especially true for proposals where Public Organizations are providing some level of financial support.

What is the Strategy for Public Organizations?

This is a multipart blog, and future articles will focus on specific ways Public Organizations can help make the BEAD program a success in their communities. However, it’s clear Public Organizations can take steps now to set the stage. OBD’s preliminary map enables every community to see each home, business and structure that needs a broadband connection and to identify the ISPs that claim to be able to provide service to that location – and the maximum level of service they can provide.

Local Public Organizations are uniquely able to verify that data because they are a part of the local community. This is especially important because individuals cannot challenge the FCC data or OBD’s map directly. This means that Public Organizations will need to play a critical role in developing challenges to the map when that is necessary. Equally important, local Public Organizations can serve a vital role in assessing, and if necessary, rebutting challenges to the map that are raised by ISPs in the area.

In addition, the data in the preliminary map gives Public Organizations a list of the providers serving each location – both in the community and in surrounding areas. In all likelihood, these ISPs will be making the business decision regarding whether they will participate in BEAD funding, and if so, the specific locations where they will extend service, and the type of technology (fiber, cable or fixed wireless) they will use.

These decisions will not be made in a vacuum. Among other considerations, ISPs will assess the ease of obtaining permits, right of way, and easements to construct the improvements, and the level of customer subscriptions they can expect in the new service area. As will become evident in later blogs, Public Organizations can do much to help and encourage ISPs as the grapple with these issues. However, the first step (and perhaps the most important one), is for Public Organizations in the community to reach out to each local ISP to let them know they are interested in participating and assisting them in the process of developing a BEAD proposal.

*** BEAD offers communities across the state an historic opportunity to finally become connected to the internet in ways that will improve the health, education and economic opportunity for everyone. For our state, this truly is “our shot” .. and we must not throw it away.

16 Jan 2024

The Affordable Connectivity Program May “Go Away” Just When it is Needed Most

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They say timing is everything, and that certainly likely will be the case as we move forward this year to implement major components of the 2021 Federal Infrastructure legislation (the Infrastructure Act). You may recall that the Infrastructure Act appropriated $65 billion with the objective of providing every residence, business and institution in the United States a high-speed internet connection – broadband, and the skills to use it. Read more…

16 Jan 2024

The Affordable Connectivity Program May “Go Away” Just When it is Needed Most

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By Marc McCarty

They say timing is everything, and that certainly likely will be the case as we move forward this year to implement major components of the 2021 Federal Infrastructure legislation (the Infrastructure Act). You may recall that the Infrastructure Act appropriated $65 billion with the objective of providing every residence, business and institution in the United States a high-speed internet connection – broadband, and the skills to use it. The Act has three goals: building out the infrastructure needed to connect unserved and underserved locations (broadband “access”), getting individuals the skills-based training and resources they need to use a broadband connection effectively (“adoption”), and finally, making broadband affordable for households that lack the financial resources to subscribe for the broadband connection they need (“affordability”).

The rationale for this “three-prong” approach is logical. It makes little sense to build out a broadband network in unconnected communities if most of the targeted individuals are afraid to go online or lack the skills needed to use the internet applications that would help them the most. These skills, include using the internet to start a business, pay bills and bank online, connect with a health care provider, or get an advanced education certification or degree. Equally obvious, having a fiber optic broadband connection at your home is of no value if you can’t afford to subscribe for service, or if you can’t afford a basic device to connect to the internet efficiently.

With this in mind, an earlier Blog noted that the Infrastructure Act had allocated at least $46 billion of grants and low interest loans for broadband access, up to least $4.75 billion for broadband adoption programs, and $14.2 billion for broadband affordability (the Affordable Connectivity Program or “ACP”).

The ACP was designed to permanently replace the Emergency Broadband Benefit (“ECB”) a similar temporary program enacted during the COVID pandemic. Like the ECB, ACP is targeted to help families that lack financial resources pay for the internet service they need to use the internet effectively. While there are several ways to qualify for ACP, generally families earning less than twice the annual poverty income ($60,000 for a family of 4) are eligible for the ACP.

The ACP provides these households a $30 per month credit that can be applied to monthly cost of internet service and a one-time $100 credit toward the cost of a desktop, laptop or tablet computer to connect to the internet. The program began funding in 2022 and as of last week, over 22.5 million households were receiving benefits. One advantage of the ACP is that the “credit” can be applied by families toward any level of broadband service offered, so even if a household was able to pay for some internet connectivity before, the ACP enabled them to upgrade to a higher more expensive level of service, so they can take advantage of applications such as telemedicine and online learning that require a faster and more stable internet connection.

Many Missouri families now use this benefit. In several rural Missouri counties more than one in five households that are connected to the internet are receiving ACP. The truth is ACP has been so successful, that it is about to run out of money. The FCC administers this program, and it has already instructed internet service providers (“ISPs”) to send out the first of three written notices beginning January 25, to customers warning them the benefit will expire (likely sometime in May).

The ACP has wide support among participants, internet providers and the general public. Last week bipartisan legislation was introduced to extend funding for the ACP through the end of 2024. Certainly given the political environment, that may be the best we can do at this time, and even in this case passage of this legislation likely will not occur unless constituents make their wishes known.

Ironically, this comes at the very time when almost all the Infrastructure Act money set aside for broadband access (BEAD) and broadband adoption (DEA) remains unspent! The delay in funding BEAD and DEA occurred for many reasons, some of which I’ve written about already. However, Missouri’s Office of Broadband Development (OBD) now awaits approval of its “Initial Proposal” to distribute the first 20% of the $1.7 Billion dollars of BEAD funding along with a smaller DEA “State Capacity Grant” to fund broadband adoption. Those approvals (granted by the National Telecommunications and Information Agency –NTIA) are expected as early as late spring, followed by competitive grants that could begin funding new projects by year-end.

For a variety of reasons, the State’s BEAD proposal primarily contemplates using existing private and public ISPs to extend broadband service to the 400,000 locations in the state with no – or with inadequate – broadband access. Those ISPs provide access to the internet (fund capital expansion, maintain, and operate) primarily through subscriber revenues paid by businesses and residents. Locations needing broadband access lack it in most cases because the ISPs that potentially could serve them cannot make an adequate profit to justify the investment. The objective of the BEAD program is to use just enough public money to induce ISPs to expand service to these unserved and underserved locations.

For example, if the average cost of extending service to a group of locations was $5,000 per location, but an ISP could only be profitable if installation costs were no more than $1,500 per location, an efficient BEAD grant program would provide the ISP a grant of $3,500 per location, conditioned on the ISP going forward to provide broadband access to all of these unserved locations. But that example assumes that families and businesses in those locations actually will subscribe for the service (at levels as high as – or higher— than other areas where service is currently available). In other words – ISPs don’t need or necessarily want more locations with access to the internet – instead they want more locations with internet subscribers.

That is one practical reason why both the DEA, and the ACP exist. From a purely economic standpoint, both of these programs are designed to work alongside BEAD to increase demand for broadband service (the “take rate” as it’s known in the industry). The DEA gives folks the skills needed to appreciate and safely use internet based applications and technologies; the ACP makes that service affordable, so families to pay for the service they need.

Taken together one can think of these broadband programs BEAD, the DEA and the ACP as something like a three legged stool. The three legs of that stool provide funding for broadband access, adoption and affordability. Remove one of those legs, affordability in this case, and the stool – a $65 billion stool – may well topple over.

Of course there are many good reasons for providing financial assistance to families that can’t afford the broadband service they need besides creating a broadband network that is financially viable. Connecting most businesses and individuals to broadband has led to extraordinary gains in productivity and quality of life, but as the COVID pandemic illustrated, those gains have been uneven, with millions lacking adequate internet service and unable to use these new internet-based applications. We all pay when we leave the most economically vulnerable families disconnected to the internet applications we take for granted, in higher costs for healthcare, basic government services, substandard education, and fewer economic opportunities. A program like the ACP can help remove financial barriers to internet connectivity, and certainly it can be justified for that reason alone. However, allowing a program like the ACP to go away after all the work done over the past two years, and just as we are ready to spend over $45 billion on broadband expansion, is most certainly a mistake.