The Largest U.S. Investment in Broadband Deployment Ever

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One aim of the new Infrastructure Investment and Jobs Act is to ensure that every American has access to reliable high-speed internet service. Here we begin a multi-part series looking at the major broadband-related provisions of the legislation. First up: over $42 billion for broadband deployment grants to the states. We look at why new broadband maps are so critical to these efforts, what the grants can be used for, the process for states to receive the support, and a timeline moving forward. 

FCC COMMITS OVER $421 MILLION IN ADDITIONAL FUNDING THROUGH EMERGENCY CONNECTIVITY FUND PROGRAM

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The Federal Communications Commission today announced that it will commit over $421 million in the latest round of Emergency Connectivity
Fund announcements, bringing total program commitments to over $3.05 billion. The funding is supporting schools and libraries in all 50 states, Guam, Puerto Rico, the U.S. Virgin Islands, and the District of Columbia. The funding can be used to support off-campus learning, such as nightly homework and virtual learning, as schools and libraries continue to respond to the ongoing COVID-19 pandemic.

Helpful Guidance on the Use of ARPA Funds by Local Governments

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We’ve written earlier about the use of American Rescue Plan Act (ARPA) Funds to pay for broadband infrastructure projects. Besides the cryptic language in the statute (necessary broadband infrastructure) we noted two helpful additional sources published by the U.S. Treasury Department —  the “Interim Final Rule” effective May  17, 2021, and a series of answers to Frequently Asked Questions about the statute and the Interim Final Rule (the FAQs).

But some pointed to the “Interim” label on these rule – cautioning that the guidance was not final and implying that local governments relying on them might find themselves in a box if the “final” guidance that eventually is issued by the Treasury (a new or updated rule) somehow turned out to be materially different from what is in Interim Final Rule. The concern was that the Federal government might attempt to recoup money from the local government based on the theory that it was improperly spent under new “final” rule, even though it appeared to be permitted under the Interim Final Rule.

Undoubtedly, this has led some local governments to reconsider spending ARPA funds it had on hand, because the Treasury Department recently addressed this very concern directly in an undated “explanation” posted on its website.

The Treasury explanation begins by referring to the guidance already given and noting that ARPA funds were provided to local governments with the expectation that they would be spent promptly to remedy issues caused or made evident by the COVID pandemic. The explanation then cautions everyone not to expect to see a new final rule anytime soon, because the Treasury is now considering almost 1000 separate public comments it received to the Interim Final Rule published this spring.

Given this situation, the explanation goes on to state the following:

“Until Treasury adopts a final rule, and the final rule becomes effective, the Interim Final Rule is, and will remain, binding and effective. This means that recipients can and should rely on the Interim Final Rule to determine whether uses of funds are eligible under this program. Treasury encourages recipients to use funds to meet needs in their communities.

Funds used in a manner consistent with the Interim Final Rule while the Interim Final Rule is effective will not be subject to recoupment.”

What about the FAQs? Again, the explanation is helpful:

“Finally, recipients may also consider FAQs issued by Treasury to help assess whether a project or service would be an eligible use of Coronavirus State and Local Fiscal Recovery Funds.”

So where does that leave local county commissions, city councils, and boards of aldermen? Well obviously, they can and should consult with their professional advisors for advice in special cases, but clearly the language used in the explanation leaves little doubt that Treasury wants to encourage state and local governments to use and rely on the guidance it has already provided, and not to delay spending ARPA funds for fear that “final” rules may provide something different.

FCC COMMITS OVER $1.1 BILLION IN SECOND FUNDING WAVE OF EMERGENCY CONNECTIVITY FUND PROGRAM, FUNDING OVER 2.4 MILLION DEVICES AND 1.9 MILLION BROADBAND CONNECTIONS

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The Federal Communications Commission today announced that it is committing $1,159,681,350.34 for 2,471 schools, 205 libraries, and 26 consortia that applied for support from the $7.17 billion Emergency Connectivity Fund Program. Combined with the first funding wave, students, school staff and library patrons in all 50 states, the District of Columbia, Puerto Rico, Guam, and the Virgin Islands will receive access to the devices and broadband connectivity they need to support their off-premises educational needs.

Governor Parson Announces $400 Million Plan to Improve Broadband Infrastructure in Missouri

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During a press conference at the Missouri State Fair hosted by the Missouri Farm Bureau, Governor Mike Parson announced plans to deploy more than $400 million in American Rescue Plan Act (ARPA) funds to increase broadband internet access, adoption, and assistance statewide

Using American Recovery Plan Act Funds for Broadband Infrastructure — Guidance for Local Governments

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By Marc McCarty

Memories are short. As I write this in mid-August, the focus is on the bipartisan Infrastructure Investment and Jobs Act (the IIJA) that passed the Senate on August 10th. That Bill has made headlines in part because it promises to make $65 billion available for broadband infrastructure and adoption. Even though it still faces additional hurdles and an uncertain future, the IIJA has captured the limelight, and many seem to have forgotten about another piece of funding legislation – the American Rescue Plan Act (“the ARPA”).

Signed into law on March 11, 2021, the ARPA also provided billions of dollars — both to states and local governments (counties, cities, and towns) throughout the United States — that can be used to pay for critical infrastructure needs, among them: broadband infrastructure. Unlike the IIJA, which in its current form will fund investment in broadband infrastructure over several years pursuant to a long-term strategic plan developed by each state, money appropriated under the ARPA is available to local government (and to the State) now, and could complement the longer-term strategy for investment in broadband infrastructure contemplated by the pending IIJA legislation.

The Missouri State Treasurer’s Website contains a comprehensive set of documents and general information related to ARPA funding. This Blog focuses on the use of money appropriated to “local government” — which includes Missouri counties, metropolitan cities (cities with populations greater than 50,000) and other cities, towns, and villages across the State for broadband infrastructure. While not specifically covered here, these same rules generally would apply to the more than $1.3 billion appropriated directly to the Missouri State government by ARPA as well.

ARPA & Broadband Infrastructure

The relevant language in ARPA permits counties, metropolitan cities and other cities, towns and villages to use the appropriated funds for several specific purposes including – “to make necessary investments in water, sewer or broadband infrastructure.” These funds must be encumbered by December 31, 2024 and spent no later than December 31, 2026.

Obviously, this is a “big deal” for cash-strapped local governments. It is almost as if the Federal government suddenly deposited money in their checking account, but of course, like anything that seems too good to be true, questions quickly arose about what conditions and limits were placed on the “withdrawal” of that money, particularly broadband — since broadband has only recently been recognized to beinfrastructure.” Certain uses, such as funding public pension shortfalls or using the funds appropriated to reduce or offset taxes are prohibited by the statute itself, but there were other uncertainties that needed further clarification.

For many local government-decision makers who want to use ARPA money to bring better internet service to their community, these questions could be summarized as follows:

  • What is “broadband”?
  • When is it “necessary”?
  • What types of costs can be included as “broadband infrastructure?

What is “Broadband”? and When is it “Necessary”?

Thankfully, many of those uncertainties have been resolved through publication of an Interim Final Rule by the United States Treasury Department on May 17, 2021 and the answers to Frequently Asked Questions (FAQs) published by the Treasury Department that were last updated in late July.

The Interim Final Rule defines broadband to include any internet service capable of downloading and uploading data at speeds of at least 100 megabits per second (100/100 Mbps). In areas where construction of internet infrastructure capable of delivering service at those speeds is not practical, the Interim Final Rule allows funding for networks capable of providing service at speeds of at least 100 Mbps download and 20 Mbps upload (100/20 Mbps), so long as the network can be scaled up to 100/100 Mbps service or higher at a later date.

To put this in perspective, internet service at this level is between 4 to over 30 times faster than the FCC’s current definition of “broadband“. The Interim Final Rule requires that broadband infrastructure projects be targeted to serve areas that are “unserved or underserved,” which is defined as an area lacking consistent wired internet service at speeds of at least 25 Mbps download and 3 Mbps upload (25/3 Mbps).

The Interim Final Rule generally defines a “necessary” investment for broadband to include those designed to provide adequate service to locations where it is unlikely that the investment could be made using only private sources of funds. By way of a practical example, the Interim Final Rule says that the service offered must be sufficient to allow multiple members of a household to work and attend school online at the same time. To avoid duplication of internet service, the preamble to the Interim Final Rule encourages local governments to avoid investing in locations that have existing agreements to build reliable wired internet service at 100/20 Mbps or higher — but only if that service will be in place by December 31, 2024.

What Qualifies as an Investment in Broadband Infrastructure?

The Treasury Department FAQs provide some answers to many other practical issues a local government may face as they determine whether a particular use of funds is an “investment” in broadband infrastructure. In general, the FAQs appear to give local government substantial latitude to structure practical uses of ARPA funds. For example, local government may elect to transfer funds to a special purpose unit or agency of government or to a nonprofit organization or for-profit business, so long as that entity uses the funds for necessary broadband infrastructure. (FAQ 1.3 and 1.8). In addition, ARPA money may be used to fund loans to individuals, NGOs, or business — if the loan proceeds are used for broadband infrastructure (FAQ 4.11).

Unlike some other federal grant programs, so long as the objective of the local government is to prioritize broadband infrastructure to reach unserved or underserved locations, ARPA funds can also be used to improve service in other locations in the project area that already are “adequately served” (that is — locations able to connect through a wired internet service consistently and reliably at speeds of 25/3 Mbps). (FAQ 6.8 and 6.9).

In addition, the FAQs give the local governments wide latitude to determine if a particular area is unserved or underserved, and they need not accept download/upload speeds advertised by ISPs operating in the area if other available data does not support those claims. Instead, local government decision-makers “…may choose to consider any available data, including but not limited to documentation of existing service performance, federal and/or state-collected broadband data, user speed test results, interviews with residents and business owners, and any other information they deem relevant.” (FAQ 6.11)

In evaluating this information, local government also can consider whether the service is available at all hours of the day, and other factors that can affect the performance of internet applications such as latency or jitter, or the fact that the service is being delivered by outdated technologies such as DSL over copper or earlier versions of cable internet. (FAQ 6.11). The FAQs also clarify that funded projects may include “mid-mile” infrastructure — connecting ISPs rather than individual and business end users. (FAQ 6.10).

Finally, the FAQs broadly define investments in broadband infrastructure to include “pre-project development” expenses — expenses that are tied to a broadband project or reasonable expected to lead to a broadband project. This would include among other things, costs such as community planning, engineering, mapping, evaluation of needs and technologies, etc., so long as those expenses were incurred as part of a process intended to result in a broadband infrastructure project. (FAQ 6.12).


Obviously, a blog of this length can’t cover all questions that have been addressed already related to the use of ARPA to fund broadband infrastructure, and additional guidance almost certainly will be needed for special situations. However, the guidance now available does provide an excellent start for local government leaders and their advisors, and hopefully we will soon see some of those appropriated funds being spent on broadband infrastructure planning and construction projects.

August 16, 2021


[1] The information provided is not intended as legal advice and is offered for general informational purposes only based on information believed current as of the date written. Local government decision-makers are encouraged to seek advice from their legal advisors for answers to any specific questions related to the use of ARPA funds.