Christopher Ali is the Pioneers Chair in Telecommunications and Professor of Telecommunications in the Bellisario College of Communications at Penn State. His research interests include media and telecommunications policy and regulation, broadband policy, critical political economy, critical geography, comparative media systems, qualitative research methods, media localism and local news.
Ali’s current research focuses on broadband policy and deployment in the United States, specifically in rural areas. His book, Farm Fresh Broadband: The Politics of Rural Connectivity (MIT Press, 2021), examines the complicated terrain of rural broadband policy in the U.S. His work on broadband availability in the rural United States is directly relevant to concerns about local news provision. As he and co-author Nick Mathews show in their recent journal article, “Desert Work: Life and Labor in a News and Broadband Desert,” and as we found in our 2023 State of Local News Report, the rural population is on average older, less affluent and with lower average educational attainment than people living in urban areas.
But this was not always the case, and the digital transformation has affected rural areas unevenly. On one hand, farmers have more technology at their fingertips than ever before. On the other, average citizens often do not have access to reliable broadband connectivity, leaving them behind in a number of ways.
For example, people who lack reliable broadband internet in the digital age have more difficulty accessing health care options, including the most recent guidelines; they have a harder time finding jobs, which are often posted only online (and increasingly one can apply for jobs only online); and entertainment options are fewer, as non-digital content becomes harder to find or to operate. Many such problems can be alleviated by access to quality local news, but that too is made more difficult to deliver if broadband access is unreliable or nonexistent.
The Broadband Equity Access and Deployment – a.k.a. BEAD – program that Chris discusses here is a potential game-changer for many states with large rural and otherwise unconnected populations.
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Sarah Stonbely What are the key broadband programs established in the 2021 Infrastructure Act, and which agencies are responsible for administering the funds?
Sarah Stonbely -
Christopher Ali Across the country, state and territory broadband offices are preparing to receive and administer the largest federal investment in telecommunications in the history of the United States: the broadband programs of the 2021 Infrastructure Investment and Jobs Act (IIJA). Specifically, two programs eventually will fall under state jurisdiction: the $42.5 billion Broadband Equity Access and Deployment (BEAD) Program and the $2.75 billion Digital Equity Act Programs. Funds are presently in the hands of the National Telecommunications and Information Administration (NTIA).
In the coming years, the NTIA will distribute funding to states, which will then administer state broadband and digital equity programs to deliver funding to eligible entities like broadband providers and community organizations. A third Infrastructure Act broadband program falls outside state jurisdiction. The $14 billion Affordable Connectivity Program (ACP) is administered by the Federal Communications Commission (FCC) and operates as a subsidy for low-income qualifying households to reduce their broadband subscriptions by $30/month ($75/month on tribal lands and high-cost areas).
Christopher Ali -
Sarah Stonbely Tell us more about the BEAD program…
Sarah Stonbely -
Christopher Ali As the largest of the IIJA broadband programs, BEAD has received the most attention from industry, policymakers, advocates and researchers. The funding is meant to connect unserved locations with priority placed on fiber optic connectivity. Fiber optics are considered the gold standard of broadband connections because they can handle a near unlimited amount of traffic and can therefore scale to future usage.
“Unserved” is defined as someone receiving less than 25 megabits per second download, 3 megabits per second upload (often depicted as “25/3”) while “underserved” is defined as less than 100/20 Mbps. For context, streaming a 4K Netflix film requires at least 25 megabits per second. The NTIA allocates money to each state based on their proportion of unserved locations as determined by the FCC’s National Broadband Map. Everyone was guaranteed $100 million, and nineteen states received more than a billion dollars. These included Texas at $3.3 billion, California at $1.9 billion, Missouri at $1.7 billion and Michigan and North Carolina at $1.5 billion each. A handful received just slightly more than their IIJA-guaranteed amount, including Connecticut at $144 million, North Dakota at $130 million, Delaware at $107 million and Washington, D.C., at $100 million.
To receive their funds, states needs to deliver three documents, first to their residents for public comment and then to the NTIA:
- A five-year broadband plan, which includes summaries of community engagement initiatives.
- An initial proposal for how the state will spend its allocation, decide on eligibility criteria, describe its required low-income and middle-class pricing tiers and how it will handle challenges. (Initial proposals are divided into two volumes, with the first volume due 180 days from receipt of notice regarding funding, which was June 26. Vol. 1 of proposals are thus due Dec. 27.)
- A final proposal due after the awards are given out. (Final proposals are due 12 months after the NTIA approves the initial proposal.)
Upon approval of the initial proposal, states will receive 20% of their guaranteed allocation. The remaining 80% will be released upon the NTIA’s receipt of the Final Proposal. Following that, states have four years to complete their programs. As of Dec. 5, every state has shared at least a draft of their Initial Proposals Vols. 1 and 2 with the public and NTIA. As of this Q&A, the NTIA has approved the Vol. 1 proposals of Louisiana and Virginia.
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Sarah Stonbely Are there variations among states in terms of their readiness and approach to implementing their BEAD programs?
Sarah Stonbely -
Christopher Ali There is considerable variation amongst states in terms of the organization of their broadband offices, their five-year broadband plans and their initial proposals. Louisiana was the first state in the nation to have submitted its first and second initial proposal volumes to the NTIA. As of Dec. 5, 25 states have submitted the final Vol. 1 draft to the NTIA for approval, while Louisiana, Virginia, Delaware, Kansas, Nevada and Vermont have submitted their final Vol. 2 draft.
State variation has left some industry watchers concerned that some states are in stronger positions than others to implement broadband programs in a way that will effectively lead to the digital equity goals outlined in the IIJA. The consulting firm, McKinsey, for instance, observed how “states are expected to administer federal broadband funds on tight timetables, across multiple agencies and levels of government, and with deep involvement from private-sector ISPs.” Some states, however, have received high praise from researchers and industry watchers, including Virginia, Minnesota, Maine and Louisiana.
In my opinion, certain states are worth keeping a watchful eye on. Virginia, for instance, is poised to solve its issue of un-connectivity and has privileged public-private partnerships through its Virginia Telecommunications Initiative . Vermont, by contrast, developed what it calls Communication Union Districts, which are partnerships of “two or more towns that join together to provide communication infrastructure to residents.” This is an example of community broadband, which is held up by many as the ideal network scenario in that it delivers faster speeds at lower prices for consumers.
Pennsylvania and 15 other states face potential struggles navigating state bans against municipal broadband and an explicit prohibition of discrimination against municipal entrants in the IIJA. Texas is another state to watch because it was relatively slow in committing state funds to augment its federal allocation. As the first in the country out of the broadband gate, Louisiana should also be watched as the pacer, while Minnesota’s decades-long broadband office and programs have been heralded as a model to follow. Kansas, meanwhile, has doubled down on community engagements.
Christopher Ali
All of the large ISPs have received considerable federal support to provide universal access over the past few decades, yet all have failed to do so.
Christopher Ali, Telecommunications Professor and Department Chair, Penn State University
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Sarah Stonbely What are some concerns you have regarding the BEAD program?
Sarah Stonbely -
Christopher Ali I see at least four outstanding concerns regarding the BEAD program: the FCC’s National Broadband Map, the required Letter of Credit, the dominance of large providers and the prohibition on municipal broadband. In the first regard, the FCC was ordered back in 2020 to revise its national broadband map because of overexaggerated claims of nationwide connectivity. The FCC contracted CostQuest to design its new map, which was used exclusively to determine BEAD state funding levels. The map, while more granular than the previous version, still allowed for self-reported connectivity levels from ISPs and allowed ISPs to report only advertised (not actual) speeds. In addition, the new map continues to erase tens of thousands of eligible locations, leaving some states worried that they are not getting their fair share of BEAD funding.
Next, the IIJA and NTIA require that BEAD award winners (known as sub-grantees) provide a letter of credit for 25% of the grant, in addition to the 25% matching requirement. As our friends at Connect Humanity have said, this requirement could be particularly onerous and detrimental for “small and community-centered ISPs, minority and women-owned businesses, nonprofits and municipalities.” For instance, if the total cost of the network is $10 million, and the BEAD grant is $7.5 million, to cover the match requirement, letter of credit and interest and fees, Connect Humanity estimates that the recipient will need $4.6 million on hand. That is a lot of money for a small ISP.
To alleviate some of this upfront pressure, the NTIA recently released updated guidelines that favor smaller providers who may not have been able to attain the necessary capital. Specifically, the NTIA announced it would waive the letter of credit under four conditions: 1) the sub-grantee opts to use a credit union; 2) the sub-grantee opts to use performance bonds; 3) the sub-grantee can secure a reduced letter of credit “upon achievement of specific deployment milestones”; 4) the sub-grantee can seek an alternative percentage for the letter of credit or the performance bond if it meets certain conditions.
The third critique is the presence of large incumbents who have been gobbling up a substantial share of state broadband program funding in recent years, in addition to bullying away the establishment of local or community competition. One way this has been done is through the raising of challenges to community leaders’ applications to state and federal grants. The large incumbents question their need for funding by pointing to the unreliable maps that overexaggerate coverage, as described in the first critique. This domination is particularly prevalent amongst large cable and telecommunication companies like Charter, Verizon, Comcast and AT&T. U.S. broadband is defined by a tension between the largest ISPs and smaller, community-based alternatives. All of the large ISPs have received considerable federal support to provide universal access over the past few decades, yet all have failed to do so.
Fourth, as I noted above, 15 states have either prohibited or inhibited municipal or publicly funded broadband networks. This severely limits the choices and autonomy for U.S. communities and, in my opinion, serves only to protect the interests of incumbent providers. Municipal broadband has proven time and time again to be a crucial component of digital infrastructure in the states that allow it. The IIJA specifically states that municipalities cannot be discriminated against when it comes to BEAD funding. Now, all eyes will be on those states that prohibit or inhibit municipal broadband to see how actionable and enforceable the IIJA language is.
Christopher Ali