Bipartisan Infrastructure Package: Broadband

Last week, the Senate passed the “Infrastructure Investment and Jobs Act” (H.R.3684), sending the bill to the House. As has been widely reported, Congressional Democratic Leadership is linking this bill with a forthcoming $3.5 trillion package “to enact the [White House’s] Build Back Better agenda.” Consequently, this bill will likely not pass before the other package does unless it fails to pass. Then Democrats would be faced with a dilemma, for the $3.5 trillion package is probably the only opportunity to enact President Joe Biden’s sweeping plans to address climate change, higher education, healthcare, and other Democratic policy priorities.

Putting aside the politics and probabilities, the Senate’s $1 trillion infrastructure package is chock full of cybersecurity and technology funding and programmatic provisions. However, given the breadth of programs and funding, today we will just look at the very extensive broadband programs that carry a purported price tag of $65 billion, $35 billion less than the White House and Democratic stakeholders wanted.

Nonetheless, the drafters of much of the broadband language decided against using the Federal Communications Commission (FCC) as the conduit and overseer for most of the funds. Instead, the Department of Commerce’s National Information and Telecommunications Administration (NTIA) will fill this role. There are likely a few reasons for this. First, Members have long wrangled with the agency just to get accurate maps of broadband coverage in the U.S. and over the definition of high-speed internet. There may not be a lot of patience or good feelings on Capitol Hill towards the FCC. Second, at present, the agency is deadlocked with 2 Democrats and 2 Republicans, and there have been no public signs as to when the Biden Administration will nominate a commissioner to tip the agency to the Democrats. Although a few theories have been floated as to why this is, including the White House not wanting to complicate passage of the infrastructure bill, infighting in the White House, giving acting Chair Jessica Rosenworcel a “try out,” and cross currents from Democratic stakeholders about a nominee. Third, the NTIA will be more answerable to the White House through the Secretary of Commerce and department senior officials. Moreover, Secretary Gina Raimondo has earned raves form key moderate Senators, and as a former governor she is presumably experienced in the view from a statehouse in trying to fulfill dictates from Washington.

The Senate folded provisions from the “Accessible, Affordable Internet for All Act” (H.R.1783/S.745) (see here for more detail on the bill as introduced) but reduced the overall funding from $94 billion to $65 billion, largely in the form of a new grant program the National Telecommunications and Information Administration (NTIA) would administer. The agency must establish within six months a ‘‘Broadband Equity, Access, and Deployment Program’’ to make grants to eligible entities, and $42.45 billion is authorized and appropriated for this program. The NTIA “shall provide technical support and assistance to eligible entities (a term defined to include only states, the District of Columbia and certain U.S. territories) to facilitate their participation in the Program, including by assisting eligible entities with—

(i) the development of grant applications under the Program;

(ii) the development of plans and procedures for distribution of funds under the Program; and

(iii) other technical support as determined by the [NTIA].

The NTIA is also charged with providing more general assistance to states for obtaining a Broadband Equity, Access, and Deployment Program grant, namely:

(i) to support the expansion of broadband, with priority for—

(I) expansion in rural areas; and

(II) eligible entities that consistently rank below most other eligible entities with respect to broadband access and deployment; and

(ii) regarding cybersecurity resources and programs available through Federal agencies, including the Election Assistance Commission, the Cybersecurity and Infrastructure Security Agency, the Federal Trade Commission, and the National Institute of Standards and Technology.

The NTIA would make grants based on a formula determined by the FCC’s broadband maps as required by the “Broadband  DATA  Act’’ (P.L. 116-130) (47 U.S.C. 642 et seq.). On 6 August, the FCC announced “a brand-new map showing mobile coverage and availability data in the U.S. from the country’s largest wireless providers.” The agency continued that “[t]his is the first public map showing updated mobile coverage released by the FCC and represents a significant improvement over other data previously published by the agency.” The FCC added the map “also serves as a public test of the standardized criteria developed to facilitate improved mapping under the Broadband DATA Act.” It is not clear whether this broadband map that features only data voluntarily submitted by the four biggest wireless carriers in the U.S. suffices to satisfy the Broadband DATA Act’s requirements. It bears note that the bill refers to broadband data maps and not a map, suggesting the FCC has some other maps to draft and publish. Consequently, NTIA may need to wait on the FCC’s completion of the broadband map mandated under the Broadband DATA Act to disburse the $42.45 billion in grant funding aimed at rural and underserved areas of the U.S. to close to digital divide. Or expediency and political pressure may encourage the NTIA to deem the 6 August map sufficient and proceed.

In any event, once the Broadband DATA Act maps are finished and published, the NTIA must allocate $4.245 billion to states with none receiving less than $100 million with the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands dividing a total of $100 million. The NTIA needs to use a formula to distribute funds for this first tranche, and this formula requires:

• “dividing the number of unserved locations in high-cost areas in the eligible entity by the total number of unserved locations in high-cost areas in the United States” and
• Multiplying this number by $4.245 billion

The rest of these funds ($38.205 billion) will be distributed thorough a different formula:

• “(i) dividing the number of unserved locations in the eligible entity by the total number of unserved locations in the United States; and”
• Multiplying this number by $38.205 billion

Moreover, within six months of enactment the NTIA must issue a notice of funding opportunity for the Broadband Equity, Access, and Deployment Program and after states submit letters of intent, they can apply for planning grants, which could be no more than 5% of the second tranche of funds. In exchange for these planning funds, states will need to complete three-year action plans.

When the NTIA can start handing out funds, states will need to navigate and complete a lengthy application process designed, no doubt, to ensure NTIA can ensure funds will be well used for the purposes of the act.

Be that as it may, when funding is doled out, states would then make competitive grants to subgrantees for

• unserved service projects and underserved service projects;
• connecting eligible community anchor institutions;
• data collection, broadband mapping, and planning;
• installing internet and Wi-Fi infrastructure or providing reduced-cost broadband within a multi-family residential building, with priority given to a residential building that—
  • has a substantial share of unserved households; or
  • is in a location in which the percentage of individuals with a household income that is at or below 150 percent of the poverty line applicable to a family of the size involved (as determined under section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)) is higher than the national percentage of such individuals;
• broadband adoption, including programs to provide affordable internet-capable devices; and
• any use determined necessary by [NTIA] to facilitate the goals of the Program.

And so, obviously, these funds would be directed first and foremost to entities looking to bridge broadband gaps or limited service. There are other purposes for which entities could use funds, including for Wi-Fi infrastructure in multi-family residential buildings or for reduced price service.

Moreover, all subgrantees

• shall adhere to quality-of-service standards, as established by [NTIA];
• shall comply with prudent cybersecurity and supply chain risk management practices, as specified by [NTIA], in consultation with the Director of the National Institute of Standards and Technology and the Commission;
• shall incorporate best practices, as defined by [NTIA], for ensuring reliability and resilience of broadband infrastructure; and
• may not use the amounts to purchase or support—
  • any covered communications equipment or service, as defined in section 9 of the Secure and Trusted Communications Networks Act of 2019 (47 U.S.C. 1608); or
  • fiber optic cable and optical transmission equipment manufactured in the People’s Republic of China, except that [NTIA] may waive the application of this clause with respect to a project if the eligible entity that awards a subgrant for the project shows that such application would unreasonably increase the cost of the project.

The Senate is looking to further bake restrictions into U.S. telecommunications law and systems through the latter of these provisions. The FCC’s program to protect the U.S. telecommunications system against national security threats (mainly equipment and services from the PRC) bars the use of Universal Service Fund (USF) dollars from buying banned equipment and services. The above language would essentially extend this ban to the $42.45 billion in broadband grant funds. But it also expands the ban to include fiber optic cable and optical transmission equipment made in the PRC with the caveat that NTIA may waive this provision on the basis of increased costs, meaning there are not cheaper or equivalent options available.

The bill would also piggyback better broadband cybersecurity and supply chain risk management by conditioning the funds on meeting standards to be promulgated by NTIA, NIST, and the FCC. The same would be true of broadband infrastructure reliability and resilience.

States would need to award funds for broadband networks based on these criteria:

(i) shall award funding in a manner that—

(I) prioritizes unserved service projects;

(II) after certifying to [NTIA] that the eligible entity will ensure coverage of broadband service to all unserved locations within the eligible entity, prioritizes underserved service projects; and

(III) after prioritizing underserved service projects, provides funding to connect eligible community anchor institutions;

(ii) in providing funding under subclauses (I), (II), and (III) of clause (i), shall prioritize funding for deployment of broadband infrastructure for priority broadband projects;

(iii) may not exclude cooperatives, nonprofit organizations, public-private partnerships, private companies, public or private utilities, public utility districts, or local governments from eligibility for such grant funds; and

(iv) shall give priority to projects based on—

(I) deployment of a broadband network to persistent poverty counties or high-poverty areas;

(II) the speeds of the proposed broadband service;

(III) the expediency with which a project can be completed; and

(IV) a demonstrated record of and plans to be in compliance with Federal labor and employment laws.

So, the funds would be provided to projects that help unserved areas, then underserved areas, and finally to “eligible community anchor institutions” (a term that includes a number of institutions like schools, libraries, public housing organization, and others that lack gigabit-level broadband service.) But further preference would be given to “priority broadband projects” which are “designed to—

(i) provide broadband service that meets speed, latency, reliability, consistency in quality of service, and related criteria as the [NTIA] shall determine; and (ii) ensure that the network built by the project can easily scale speeds over time to—

(I) meet the evolving connectivity needs of households and businesses; and

(II) support the deployment of 5G, successor wireless technologies, and other advanced services.

As a result, the NTIA will almost certainly need to publish guidance or even more likely conduct a rulemaking to define the specifications that projects must meet in order to be “priority broadband projects.”

The eligible group of subgrantees would seem to include every possible stakeholder interested in receiving broadband funds. Nonetheless, additional priority would be given to those projects that would bring broadband to poor areas, the speed of the proposed service, how quickly the project can be reasonably completed, and the entity’s record of complying with federal labor and employment laws.

In sum, it appears the highest preference would go to projects to provide broadband to unserved areas with high levels of poverty for priority broadband projects.

For the deployment of broadband networks, subgrantees would need to match federal funds with 25% of the project costs except for high-cost areas and in some other cases. The non-federal match can come from a variety of sources, including recently funds leftover from COVID-19 appropriations packages.

The NTIA would also establish means to claw back funds from non-performing subgrantees in consultation with federal and state partners.

The NTIA and FCC would have two years to stand up a publicly website that:

(i) allows a consumer to determine, based on financial information entered by the consumer, whether the consumer is eligible—

(I) to receive a Federal or State subsidy with respect to broadband service; or

(II) for a low-income plan with respect to broadband service; and

(ii) contains information regarding how to apply for the applicable benefit described in clause (i).

Additionally, “[a] Federal entity, State entity receiving Federal funds, or provider of broadband service that offers a subsidy or low-income plan, as applicable, with respect to broadband service shall provide data to the [NTIA} in a manner and format as established by the [NTIA] as necessary.”

The Senate has also set a very high bar for any legal challenges of any NTIA decisions. First, the federal court in Washington DC is the only court that can hear such cases, and it must rule for the NTIA unless:

• the decision was procured by corruption, fraud, or undue means;
• there was actual partiality or corruption in the Assistant Secretary; or
• the Assistant Secretary was guilty of—
  • misconduct in refusing to review the administrative record; or
  • any other misbehavior by which the rights of any party have been prejudiced.

In short, unless NTIA engaged in illegal behavior or a flagrant disregard of administrative claims, its decisions in the $42.45 billion broadband program cannot be challenged.

The FCC’s remit and authority under the “Broadband DATA Act” would be changed. Broadband providers would be required to provide the information and data the agency needs to create broadband maps. The FCC would also be required to commence a proceeding on how the agency is to achieve universal service for broadband goals in light of passage of the act. The FCC would need to report to Congress on how its efficiency in achieving universal service could be improved. The FCC is moreover tasked with establishing an online mapping tool within 18 months “to provide a locations overview of the overall geographic footprint of each broadband infrastructure deployment project funded by the Federal Government.”

The bill removes limits on the “Tribal Broadband Connectivity Program” established in the “Consolidated Appropriations Act, 2021” (P.L.116–260), and $2 billion more is appropriated for this program. The NTIA is in the process of disbursing the $980 million made available for FY 2021.

The “Infrastructure Investment and Jobs Act” includes another broadband bill, the “Digital Equity Act of 2021” (H.R.1841/S.2018) would establish the State Digital Equity Capacity Grant and the Digital Equity Competitive Grant Programs and provide $2.75 billion in total for them.

The NTIA would establish the State Digital Equity Capacity Grant Program

• the purpose of which is to promote the achievement of digital equity, support digital inclusion activities, and build capacity for efforts by States relating to the adoption of broadband by residents of those States;
• through which the Assistant Secretary shall make grants to States in accordance with the requirements of this section; and
• which shall ensure that States have the capacity to promote the achievement of digital equity and support digital inclusion activities.

States would select an entity to administer the program, and those eligible for this task include a range of entities such as the state government itself, a political subdivision, a Tribal government, foundation, corporation, an educational agency and others.

Each state that wants to participate would need to draft a State Digital Equity Plan that, among other components, identifies obstacles to full digital equity, goals to promote inclusion among a number of groups, and the interplay of digital equity and other state planning processes for health, labor, education, and others. The NTIA shall award planning grants to states to execute their equity plans. Two years after the process of making planning grants starts, NTIA would start awarding state capacity grants to implement states’ digital equity plans and other measures to increase digital inclusion. A total of $600 million is provided for the two grant programs with $60 million being for planning grants. The bill outlines a formula for the distribution of the funds: 50% will be provided based on a state’s population in proportion to the U.S. population; 25% will be given based on the number of people in covered populations (i.e. those groups among whom there is less digital engagement such as the elderly and people who are learning English); and 25% based on the comparative lack of broadband availability and adoption in proportion to the broadband availability and adoption in all eligible states. NTIA may terminate and redistribute grant funds if states fail to use the proceeds in the ways they have agreed to.

The NTIA would also establish the Digital Equity Competitive Grant Program “the purpose of which is to award grants to support efforts to achieve digital equity, promote digital inclusion activities, and spur greater adoption of broadband among covered populations.” Those entities eligible for this grant are similar to those that can receive state capacity grants under the State Digital Equity Plan. When considering applications for this grant program, the NTIA “shall, to the extent practicable, consider—

• whether an application shall, if approved—
  • increase internet access and the adoption of broadband among covered populations to be served by the applicant; and
  • not result in unjust enrichment;
• the comparative geographic diversity of the application in relation to other eligible applications; and
• the extent to which an application may duplicate or conflict with another program.”

The grants will support at least one of the following:

• To develop and implement digital inclusion activities that benefit covered populations.
• To facilitate the adoption of broadband by covered populations in order to provide educational and employment opportunities to those populations.
• To implement, consistent with the purposes of this title—
  • training programs for covered populations that cover basic, advanced, and applied skills; or
  • other workforce development programs.
• To make available equipment, instrumentation, networking capability, hardware and software, or digital network technology for broadband services to covered populations at low or no cost.
• To construct, upgrade, expend, or operate new or existing public access computing centers for covered populations through community anchor institutions.
• To undertake any other project and activity that the Assistant Secretary finds to be consistent with the purposes for which the Program is established.

This grant program will require at least a 10% non-federal match and perhaps even more, for the language in the bill caps the federal portion at 90% and suggests NTIA could reduce the federal share even further at its discretion. NTIA may grants waivers for the non-federal share, however.

$1.25 billion is provided for the Digital Equity Competitive Grant Program, 5% of which may be kept by NTIA to finance administration, 5% of which shall go to grants or agreements with Indian Tribes, Alaska Native entities, and Native Hawaiian organizations, and 1% of which shall go to the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any other territory or possession of the United States that is not a State.

The “Infrastructure Investment and Jobs Act” establishes another broadband development program. The NTIA “shall establish a program under which the [NTIA] makes grants on a technology-neutral, competitive basis to eligible entities for the construction, improvement, or acquisition of middle mile infrastructure.” $1 billion is provided for this new program, and the purpose of this program is:

• to encourage the expansion and extension of middle mile infrastructure to reduce the cost of connecting unserved and underserved areas to the backbone of the internet (commonly referred to as the ‘‘last mile’’); and
• to promote broadband connection resiliency through the creation of alternative network connection paths that can be designed to prevent single points of failure on a broadband network.

The NTIA will be able to make grants to further build middle mile infrastructure to the following entities:

a State, political subdivision of a State, Tribal government, technology company, electric utility, utility cooperative, public utility district, telecommunications company, telecommunications cooperative, nonprofit foundation, non-profit corporation, nonprofit institution, non-profit association, regional planning counsel, Native entity, or economic development authority

NTIA is to prioritize applications from eligible entities that do two or more of the following:

• The eligible entity adopts fiscally sustainable middle mile strategies.
• The eligible entity commits to offering non-discriminatory interconnect to terrestrial and wireless last mile broadband providers and any other party making a bona fide request.
• The eligible entity identifies specific terrestrial and wireless last mile broadband providers that have—
  • expressed written interest in interconnecting with middle mile infrastructure planned to be deployed by the eligible entity; and
  • demonstrated sustainable business plans or adequate funding sources with respect to the interconnect described in clause (i).
• The eligible entity has identified supplemental investments or in-kind support (such as waived franchise or permitting fees) that will accelerate the completion of the planned project.
• The eligible entity has demonstrated that the middle mile infrastructure will benefit national security interests of the United States and the Department of Defense.

Moreover,

A project shall be eligible for a middle mile grant if, at the time of the application, the [NTIA] determines that the proposed middle mile broadband network will be capable of supporting retail broadband service.

Finally, under the Middle Mile Infrastructure Grant Program, the U.S. government cannot pay for more than 70% of a project, and so the applicant must finance at least 30%.

Another COVID-19 relief program from the “Consolidated Appropriations Act, 2021” (P.L.116–260) is refashioned and extended. The “Benefit For Broadband Service During Emergency Period Relating To COVID-19” would become the “Affordability Connectivity” program. $14.2 billion will be given to the FCC for this program that reimburses internet service providers mainly for providing low cost service to certain households. There are provisions that would revise some aspects of the program, including language for ISPs to recover more costs for providing service in high-cost areas on Tribal lands. Moreover, providers must allow eligible people to choose any of the ISP’s regularly offered plans and cannot require a credit check. Moreover, when a customer subscribes or renews a subscription, the ISP must tell them about the Affordability Connectivity program and how to enroll. Additionally, the FCC will need to promulgate rules to protect consumers from a number of ISP practices, including inappropriate upselling or downselling, inappropriate requirements that customers using this benefit sign on for extended contracts, inappropriate restrictions on switching ISPs while using the benefit, and “similar restrictions that amount to unjust and unreasonable acts or practices that undermine the purpose, intent, or integrity of the Affordable Connectivity Program.”

The FCC will need to certify it has disbursed all benefit funds distributed under the predecessor program before it can start handing out the new funds. Additionally, eligibility will be increased by making households earning up to 200% of the Federal Poverty Guidelines and through revising upward other criteria. However, the per-month dollar amount for households would decrease from $50 to $30.

One year after enactment of the “Infrastructure Investment and Jobs Act,” the FCC must promulgate “regulations to require the display of broadband consumer labels, as described in the Public Notice of the Commission issued on April 4, 2016 (DA 16–357), to disclose to consumers information regarding broadband internet access service plans. During the Trump Administration FCC, in repealing the Obama Administration’s FCC’s net neutrality rules, it also rolled back broadband labeling rules. Recently, Consumer Reports’ Digital Lab announced an effort to bootstrap broadband labeling. The organization stated that “along with a coalition of partners, is embarking on an ambitious project called Broadband Together to investigate the state of internet access in the U.S…[and] will analyze thousands of consumer ISP bills from across the country to better understand what factors determine why and how ISPs charge the prices they do, and what information is and is not included in monthly bills.”

Within two years, the FCC must also “adopt final rules to facilitate equal access to broadband internet access service, taking into account the issues of technical and economic feasibility presented by that objective, including—

• preventing digital discrimination of access based on income level, race, ethnicity, color, religion, or national origin; and
• identifying necessary steps for the Commissions to take to eliminate discrimination described in paragraph (1).”

The bill also includes the “Telecommunications Skilled Workforce Act” (H.R.1032/S.163) that establishes a “Telecommunications Interagency Working Group” “to address the workforce needs of the telecommunications industry, including the safety of that workforce.” This Task Force would develop and make recommendations to Congress. In a related directive, the Department of Labor and the FCC must:

issue guidance on how States can address the workforce needs and safety of the telecommunications industry, including guidance on how a State workforce development board established under section 101 of the Workforce Innovation and Opportunity Act (29 U.S.C. 3111) can—

(1) utilize Federal resources available to States to meet the workforce needs of the telecommunications industry;

(2) promote and improve recruitment in workforce development programs in the telecommunications industry; and

(3) ensure the safety of the telecommunications workforce, including tower climbers.

The “Infrastructure Investment and Jobs Act” expands qualified private activity bonds (PAB) to include broadband projects as a means of fostering private sector investment. These provisions are based on the “Rural Broadband Financing Flexibility Act” (S.1676), and the Joint Committee on Taxation has estimated this would cost $566 million in lost revenue, and at least one summary is claiming it will provide $600 million in broadband projects. For those not versed in PABs (like me), here is a handy summary the Internal Revenue Service issued:

Interest on State and local government bonds is taxable if the bonds are private activity bonds (bonds issued to finance private activities not specifically authorized by Congress) unless the bond is a qualified private activity bond provided for in the Code.

The bill defines “qualified broadband projects” as “any project which—

• is designed to provide broadband service solely to 1 or more census block groups in which more than 50 percent of residential households do not have access to fixed, terrestrial broadband service which delivers at least 25 megabits per second downstream and at least 3 megabits service upstream, and
• results in internet access to residential locations, commercial locations, or a combination of residential and commercial locations at speeds not less than 100 megabits per second for downloads and 20 megabits for second for uploads, but only if at least 90 percent of the locations provided such access under the project are locations where, before the project, a broadband service provider—
  • did not provide service, or
  • did not provide service meeting the minimum speed requirements described in subparagraph (A).

There are other requirements in using a PAB to finance a qualified broadband project, too.

The Department of Agriculture’s Rural Utilities Service’s Distance Learning, Telemedicine, and Broadband Program would be given $2 billion in additional funding for broadband loans and grants subject to extensive conditions spelled out in the bill, including coordination with the NTIA and FCC.

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