MA

Infrastructure Investment and Jobs Act Includes $65B to Close the Broadband Gap

Published: September 16, 2021

SLED Market AnalysisAdministration TransitionArchitecture Engineering and ConstructionCommunity DevelopmentFCCGeneral Government ServicesInformation TechnologyInfrastructureSOUTH DAKOTA STATE DEPARTMENTS (SOUTH DAKOTA)Telecommunications

The Infrastructure Investment and Jobs Act includes $65 billion to close the broadband gap.

The widely debated $1 trillion infrastructure bill, which includes approximately $566 billion in new spending, specifically allocates $65 billion to closing the broadband gap across the nation.  While this was an issue already being discussed across the country prior to the coronavirus pandemic, the lockdown period and transition to a remote work and school environment only served to further emphasize the digital divide and the disparity between connected communities and those without broadband access.

The White House’s Fact Sheet for this infrastructure plan notes that more than 30 million Americans live in areas where there is no broadband infrastructure that provides minimally acceptable speeds, while the FCC also estimates that nearly 17 million school children lack internet access at home.  This divide is further contributing to student learning roadblocks during a remote learning environment and widens the opportunity gap faced by these students. While a large share of this issue falls in rural areas as a result of companies not having the incentive to build internet infrastructure in less populated areas even after accounting for previous government subsidies, this number also includes millions who live in connected areas but never sign up due to an inability to afford the services.

The $65 billion broadband investment primarily focuses on a few main areas of investment:

  • $42.5 billion appropriation to the states to fund broadband network deployments, prioritizing areas currently lacking a network capable of offering a 25 Megabits per second (Mbps) download and 3 Mbps upload service. At least $100 million is reserved for each of the 50 states, and another $100 million is to be split among American territories, such as Guam and the U.S. Virgin Islands.
  • $14.25 billion to fund a $30 per month subsidy for low-income Americans to purchase broadband.
  • Senate ordered the FCC to come up with a plan to reform universal service
  • $2.75 billion for digital inclusion efforts to insure that “individuals and communities have the information technology capacity that is needed for full participation in the society and economy of the United States.”

Beyond monetary investments, this bill also includes new provisions and requirements for internet providers. The legislation requires:

  • Internet providers to use a uniform label to describe their service offerings and prices in a similar manner to food nutrition labels
  • Any internet providers that receive federal grant money will be required to offer low-cost service to eligible low-income households
  • Requires the FCC to adopt rules within two years to address “digital redlining,” in which internet providers decline to build or offer access to broadband service in areas deemed unlikely to be profitable.

A concern put forth for this investment is that the plan is spending significantly more on solving the issue of access, while affordability is still a growing concern in more urban areas for low income families. A recent Pew Research Center survey provided more insight into the digital divide by levels of income, where 83% of US adults with a household income over $30,000 annually responded they have home broadband. However, that number drops down to 57% of adults with a household income below $30,000. The FCC’s Emergency Broadband Benefit, which was passed as part of the Consolidated Appropriations Act 2021, helps families and households struggling to afford internet service during the COVID-19 pandemic. This benefit is being extended indefinitely with the $14.25 billion set aside to fund the new Affordable Connectivity Fund program which will provide a $30 discount on service for qualifying households.

A recent AP News report on South Dakota’s broadband struggles noted that approximately 13% of residents don’t have adequate broadband infrastructure and 48% live in areas with only one internet provider. An FCC study found that half of South Dakota’s counties were measured as having available broadband access for at least 88% of residents, but a separate Microsoft study found that half of the state’s counties had no more than 28% of households with actual high-speed access. The state kept the focus on the rural lack of availability, recently setting aside $100 million — mostly federal pandemic relief money — to help the telecommunications industry build fiber lines and antenna towers in rural areas.

While the infrastructure bill could still face changes as debate rages on, keep watch for further details and grant program information related to broadband spending and narrowing of the availability gap.