The COVID-19 pandemic made it clear that broadband internet connectivity is a near-essential utility. All those months in lockdown highlighted the perils of these underserved communities when it comes to internet access.
Two major pieces of legislation in 2021—the American Rescue Plan Act (ARPA) and the Infrastructure Investment and Jobs Act (IIJA)—targeted tens of billions of dollars toward efforts to bring broadband connections to rural and low-income communities. The results could prove so transformative that the bills have been compared to those supporting rural electrification in the 1930s. Perhaps future historians might call this new drive rural “internet-ification.”
“Rural” is everywhere
Understanding just how broadly the funding could affect Americans’ lives begins with getting a grip on how much of the country is considered “rural.” The U.S. Census Bureau applies the term to an area that doesn’t fit its definition of “urban.” With this definition, the 2020 U.S. Census counted more than approximately 20% of the nation’s population—more than 60 million residents—living in rural areas, which represents 97% of the nation’s landmass. Currently, more than 18 million Americans, primarily in these rural areas, lack access to broadband internet.
“Most of the issues are about building new infrastructure,” said Kathryn de Wit, project director for the Pew Charitable Trusts’ Broadband Access Initiative.
Some affected rural residents may have a limited level of internet connectivity through satellite services, a DSL line or just their smartphone’s cell service, but these options fall short of a true broadband connection, with a minimum speed of 25 megabits per second (Mbps) for data download and 3 Mbps for data upload—or 25/3 Mbps, for short.
“There are areas in every state that fall into that category, even in a state as small as Rhode Island,” de Wit said, as most U.S. internet service providers (ISPs) are private businesses with a shareholder interest in maximizing profits. “It’s very capital-intensive—they’re going to make those decisions where they can make a return on that investment.”
For people lacking a reliable broadband connection, the effects are much more consequential than whether they’re able to stream the latest episode of a hit show. The internet has become a basic utility of our everyday lives, in ways that demand much more bandwidth than even five years ago.
Consider healthcare. A surge in clinic and hospital closings means patients in some rural areas must drive hours and even cross state lines to reach medical providers for services that might be possible through virtual doctor and specialist visits. Market research firm Nova 1 Advisors sees telehealth services growing by 45% per year between 2022 and 2030, in terms of revenues, with web-based offerings taking the largest share of that growth. Of course, broadband connectivity is essential for rural Americans to access this care.
“Everything has become more data-rich, and that requires higher upload and download speeds,” de Wit said. “Part of the benefit of a fast connection is you can work from home and download classes. It really is about how we use technology today.”
Having confidence that a connection will be there when required, without fading with the weather or overall network traffic, is another side of the question, de Wit added. This need for reliability is one reason that the coaxial cable many companies use to connect customers in higher population centers isn’t adequate in most rural locations, because signals can fade with distance and age. As a result, de Wit said, more expensive fiber to the home is the only technology that works.
Making it work
Recognizing the importance of building out broadband infrastructure in unserved and underserved areas, Congress included funding for these efforts in its 2021 ARPA and IIJA legislation. By June 2022, the federal government had announced $25 billion in ARPA awards to states and tribal authorities for use in expanding high-speed internet access. The IIJA includes $65 billion more for these efforts, with states now gathering the information they need for their individual grant applications.
Qualifying for IIJA funding is a complicated process. Every state, plus the District of Columbia and Puerto Rico, is receiving an initial $100 million allocation, with an additional $100 million to be divided by the U.S. Virgin Islands, Guam, American Samoa and the Northern Mariana Islands. An additional $42.5 billion is being administered through the Broadband Equity, Access and Deployment Program (BEAD) through the U.S. Department of Commerce. Priority will be given to projects that address areas considered unserved, with no access to the 25/3 Mbps service considered to be a minimum. Next on the list will be those falling under 100/20 Mbps rates, considered to be underserved.
Doug Dawson, president and owner of telecom consulting firm CCG Consulting, said the IIJA represents a once-in-a-generation opportunity for unserved and underserved communities to gain vital broadband access.
“If an area doesn’t get it now, they’re just not going to get it,” he said. “The places left are the highest cost and the most remote. If you don’t have broadband, you need to be talking to your state representatives to make sure you get covered.”
State representatives will be important because the new funds will be administered by states as grants to the ISPs building and servicing expanded broadband networks. The process for identifying how much funding each state will receive has become quite controversial and could result in a fight between some states and the Federal Communications Commission (FCC), based on maps the agency has developed outlining existing broadband access across the country. The FCC will be using the maps to allocate state funding based on perceived need, with those areas with greater need receiving more funding.
There is a growing concern among states and ISPs that these maps severely undercount those living within areas that could benefit from new or improved access, as Dawson has pointed out in his blog, POTs and PANs.
A major sticking point lies in a discrepancy between how the FCC and ISPs count potential customers. An example in one of Dawson’s recent posts notes that FCC maps consider an apartment building or trailer park as a single connection, while ISPs would count each individual living unit as a potential customer. If potential projects are ranked by the number of connections served rather than individual living units, states with regions that include such rural multifamily developments could be shortchanged.
While this dispute is sorted out, states already are working with stakeholders, including residents and ISPs, to identify individual projects for potential funding. This won’t be unfamiliar to state administrators. Dawson said it’s similar to what is already used to distribute federal education and road money, with states establishing grant offices through which project developers can apply for grants.
Shutterstock / Christian Schwier
If potential projects are ranked by the number of connections served rather than individual living units, states with regions that include such rural multifamily developments could be shortchanged.
“States have to talk to everybody to get input, and they’re all starting that process now, and, if nothing goes wrong, states will begin getting their money by the end of this year,” Dawson said, noting that interest already is running high. “All the big companies are going to be chasing this big time—lots of people are thinking about going for it.”
While applicants likely will include some municipal and cooperative electric utilities looking to add new services for residents and members, Dawson said the difficulty of extending into rural communities could limit competition to larger cable companies.
“The ground rules are really complex,” he said, noting that the financial and environmental studies ISPs will be required to conduct could add 10% to 15% to project costs, and most grants will only cover up to 75% of network costs.
“It really favors big companies over little companies, because little companies could have a hard time passing the tests,” he said. “The big companies will win the bulk of the grants, but it’s not unusual because they’re the ones that know how to do the work.”
Tribal areas, as is often the case, face some extra challenges in tapping into these new resources. Leaders will need to work with ISPs to file through their respective states if their reservations don’t already have their own such organizations. Their generally low-income populations can argue against the profitability private ISPs require, according to de Wit.
Tribal areas also often lack a “middle-mile” network connecting their lands to larger, regional broadband networks. Finally, as independent jurisdictions, reservations have their own review and permitting processes, which could add an extra layer of bureaucracy for proposals seeking approval.
And, of course, some Native community residents lack the basic technology of electricity needed to make a broadband connection useful. An estimated 14,000 homes across the 27,000-square-mile Navajo Nation have no electrical connection.
“You’re going to have a hard time justifying broadband if you don’t have electricity,” Dawson said.
Predicting the future
Forecasting the eventual effect of these new investments—and how quickly they could begin to appear—is difficult. A spokesperson from the U.S. Department of Agriculture’s Rural Development office noted that companies may begin eyeing areas once grant applications begin to be accepted and lineworkers begin stringing new cable.
“Many companies make hiring and expansion decisions years in advance,” the spokesperson said. “Knowing that an area will have high-speed internet, say, five years down the road, can be extremely influential in a company’s decision now to build a plant that might be ready for operation in five years. Many of these high-speed internet projects have buildout times of at least 18 months or several years or more.”
Header image: shutterstock / KajaNi / Vector Shutterstock / Christian Schwier
About The Author
ROSS has covered building and energy technologies and electric-utility business issues for more than 25 years. Contact him at [email protected].