11 Nov 2021

Closing the Digital Divide: Houston, Missouri Finds a Solution

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Don Tottingham, longtime Mayor of Houston, Missouri, loved his City and thought it was a great place to raise a family. But he also recognized it had a major infrastructure issue: its residents and most small businesses lacked an adequate, reliable, high-speed internet connection.

The Vision

Mind you, Houston, Missouri, a city of approximately 2100, located in the south-central part of the state, is not entirely without high-speed internet service. Some businesses and many schools, libraries and other public institutions had the money needed to fund special, high-speed internet connections, but upon investigation Houston public officials found that the commercial providers who offered this service to businesses in the City, could not make a “business case” for extending service to all the individual residences and small businesses in the City.

This situation may sound familiar to many small towns, subdivisions, and even some neighborhoods in larger cities. However, what is unusual is that Houston’s local officials decided to do something about the problem. They decided to build a fiberoptic internet network that will offer service to all residents and businesses in the City.

I spoke recently with Houston City Administrator, Scott Avery (via Zoom) to learn more about the City’s vision and lessons learned as the project has moved forward.

When we spoke, the City’s network was under construction:  an 18-mile fiberoptic cable “ring” around the community had been completed, internet access for the City’s new network with two separate providers had been secured, and work was underway on the second stage of a four-stage neighborhood build-out to homes and businesses throughout the City.

Service has been offered to residences and businesses in the completed sections of the City beginning in March 2021, and when the network is finally completed (expected by year-end), every home and business in the City will have the option of connecting to the internet at speeds of up to 1 gigabit per second!

Community Outreach – Meeting the Needs of the Community

Mayor Tottingham lost his battle with cancer in July 2019, but by that time the City had already hired an engineering firm to conduct an internet feasibility study. The results of that feasibility study and a key component, a community survey, became available at about the time the time Scott Avery came on board as City Administrator in September.

Scott noted two key findings of the community survey. First, 78% of respondents said they would subscribe to reliable internet service offered by the City. This of course was strong confirmation of public support for the City to move forward with municipal broadband. Second, the survey showed that the overwhelming concern for residents and businesses was to have reliable internet service– meaning service that was robust enough to allow them to connect online and have confidence that the connection would remain stable for as long as it was needed. This led the City to intentionally construct a network designed to be highly reliable and capable of expanding to meet both current and future needs of residents and businesses.

Scott observed that the community outreach effort was crucial not only for Houston’s leaders, but for any community that wants to address the lack of high-speed internet access and adoption. “We could sit here in city hall and guess all the time without actually understanding what services they want the City to provide.” He added, “Having the survey gives you a chance to ‘paint the picture’ to let folks know what you are doing.” and that “helped answer the questions Aldermen had when considering whether to make the investment.”

Houston’s project is closely tied to its municipal electric utility system. Funds from the electric system have financed the expansion; city employee linemen have been cross-trained to install and repair fiber; the fiber is mounted on City-owned poles; and billing and back-office administration are incorporated with those already used for the City’s electric, water, and sewer utilities. Once fully operational, the network is expected to deliver better utility and other government services to the community, as well as provide the City’s residents and businesses reliable high-speed internet. 

“In the Trenches” – Building a Fiber Network

In early 2020, based on the findings from the survey and the feasibility study, the City decided to move forward with a City-owned and operated internet network. It selected a contractor through a request for qualifications process, and secured contracts to connect the City’s network to the internet from two separate providers. Scott’s experience in emergency services, and the community’s concerns about reliability, led to the decision to have a second provider for the City’s network. By doing this, the City has redundant access to the internet, so that a service failure with one provider would not cause the City’s network to go down, as the other provider’s capacity alone was more than that needed to service the City’s users. The City also took advantage of favorable pricing to buy more capacity (bandwidth) from these providers than was strictly necessary based on the engineer’s design. The goal was to build a system that could easily grow to meet increases in demand or perhaps a new business such as a data center that might need much higher levels of bandwidth.

The City published pricing and service levels in 2020 before network construction began. It now offers a range of service options for households ranging from $30 a month for 25Mbps (upload and download) to $90 a month for gigabit level service (1000 Mbps). Business customer options range from $75 to $250 per month but provide the customer priority routing over the network.

When it created the various options and pricing, the City focused on two considerations. First, what was the minimum level of service citizens needed to do most household tasks such a streaming video and working or taking online classes from home. Even for individuals that select the lowest service level, their connections speeds should be sufficient for those purposes.  Second, the service is priced at a level sufficient to operate and maintain the City’s network over the long term, but with no expectation of making a profit. As Scott put it — “the goal, the focus, all along is that a single mom with four kids at home – trying to get them an opportunity that they wouldn’t have had otherwise, and I think this fiber broadband and an online education opens doors for people in this community more than anything else because it attaches them to the outside world.”

With this amount of advance planning and help from outside experts, existing right-of-way, poles throughout the City to run fiberoptic cable, and a city staff experienced in operating other utilities, you might expect things would have gone relatively smoothly. Scott was quick to admit that wasn’t the case. “We started construction in March of 2020. I don’t know if you heard what happened in March of 2020, but there was a shut down from this thing called COVID.” As I laughed, he pointed to his graying hair and observed, “I had brown hair when we started this project.”

Joking aside, the COVID lockdown initially stopped and then slowed the progress on the project. Once things began to reopen, the City was faced with labor delays and shortages of fiberoptic cable and related equipment needed to construct the network. This problem is not unique to Houston, it has plagued even the largest internet providers throughout the United States. The City’s network build-out is now 14 months behind schedule, but in large part because City employees are now able to handle fiber installation even if the outside contractor is delayed, they are in a much better position to move forward to complete the build out. The City has also discovered a few “work arounds” to mitigate the supply chain issues. For example, it recently was able to fill a need for 65 “fiber dead-end connectors” by sourcing what was needed from several suppliers that could fill part, but not all, of the City’s order.

These delays also have reduced the number of subscribers from those initially projected, but the City believes this will be reversed once the entire network is complete and folks understand the value of service being offered. Noting the public’s problem with unreliable internet, Scott observed that the City’s new network has not suffered a service outage since it “went live” in some sections of the City in March.

Lessons Learned

A final list of “lessons learned” from Houston’s approach awaits completion and full operation of the new network. One lesson that Scott offered was the need to make certain that engineers and other outside advisors understand that municipal leaders, even those that lead a city’s IT department, likely do not “know what they don’t know” when it comes to designing and constructing an internet network. Open communication is critical to avoid unpleasant surprises for any community contemplating a broadband project. Other lessons he mentioned were more closely tied to the extraordinary challenges of the COVID pandemic. For example, the City’s solution to supply shortages previously described, and the need to develop effective strategies to keep the project moving forward even when contractors are stretched too thin and face severe labor shortages.

What seems equally clear is that any city or county undertaking a project like this needs to have a clear vision of its ultimate objective, a public mandate to move forward, and a tenacious innovative staff that remains calm and focused on the ultimate objective in the face of the unforeseen challenges and setbacks. Here Scott’s experience in emergency services likely was a huge plus for the City. As he put it – no matter how many problems come your way, at least you know nobody is going to die, and that certainly helps keep things in perspective. 

There is also one final “lesson” for other communities facing similar challenges of inadequate internet service that may not be as apparent:  Houston’s approach may not be appropriate or necessary to address the problem. Not every community will have the experience, leadership, and resources needed to construct and offer-high speed internet to every home and business as a municipal utility. Even in communities that do, the citizens may not want their city or county to take on this role.

However, that doesn’t mean there isn’t an appropriate role for local government to play in efforts to close the digital divide. Every city and county in the state has received federal funds to plan and pay for necessary broadband infrastructure. There are variety of contractual arrangements that local governments can use to encourage the expansion of privately-owned high-speed internet for unserved and underserved areas. However, public funds and public support for private internet expansion needs to have a public purpose — it needs to meet needs of the citizens of the community for more effective government, and real improvements to the health, education and economic well-being of the community. The first logical step in that process is to develop a comprehensive plan that identifies and meets the needs of the community.

22 Oct 2021

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.

9 Sep 2021

MetroNet to Make O’Fallon a Gigabit City

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MetroNet announced plans to build an advanced fiber-optic network in O’Fallon, bringing gigabit-speed internet service to residents and businesses in the city for the first time. MetroNet, the nation’s largest independently owned 100 percent fiber-optic provider, will fully fund the construction through a multi-million dollar investment. MetroNet expects construction to begin in O’Fallon next year, with the first customers coming online as neighborhood buildouts are completed.

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16 Aug 2021

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 be “infrastructure.” 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.

23 Apr 2021

Clinton County Selected to Test New Broadband Technology

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A small town in northwestern Missouri is one of seven communities in the nation testing experimental technology that could expand rural access to high-speed internet and the opportunities that can bring.

Missouri University of Science and Technology is leading a team that has been awarded a one-year, $300,000 grant through the technology nonprofit US Ignite’s Project OVERCOME.

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10 Feb 2021

Public-Private Collaboration Imperative to Deliver Modern Connectivity

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Connectivity is a necessity in today’s digital world. Economic opportunity, educational advancement, health and safety, social mobility, and civic engagement are increasingly tied to the widespread availability of high-speed digital communication. Broadband is often discussed as a “common good,” which is defined as something that a community provides to all members in order to fulfill a collective obligation to care for certain interests that all members have in common. Examples of common goods include
roadways, public safety services, a judicial system, public schools, parks, cultural institutions, and public transportation, as well as clean air and water.

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17 Nov 2020

Rural Access to Industry: Barriers from the Infrastructure Planning Front Lines

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As part of this research initiative, we conducted a qualitative analysis of 11 semi-structured interviews with the planning community in Missouri to identify what barriers they recognize for the deployment of rural broadband in Missouri. Participants reported that the return on investment and the financing of rural broadband projects constitute the main barriers. Technology was the most frequently discussed barrier in the literature, but the Regional Planning Commissions identified technology as the least significant barrier to rural broadband infrastructure deployment. They understand the required technology is available, but paying for it is the main challenge. The Regional Planning Commissions had had limited involvement in the planning of rural broadband infrastructure as most investment decisions regarding rural broadband infrastructure have been made by private internet service providers. Several Regional Planning Commissions expressed a lack of confidence in managing broadband projects due to their limited experience. On the other hand, they are looking forward to supporting an anticipated statewide planning initiative to be promoted by the Missouri Office of Broadband Development.

Rural Access to Industry 4.0:
Voices from the Infrastructure Planning Front LinesDownload