Most of a dozen Republican members of Congress are not happy with the way the Treasury Department has structured the final rule for handing out hundreds of billions of dollars in State and Local Fiscal Recovery Funds (SLFRF) in the American Rescue Plan, money that they can use for broadband as well as other things to help those states recover from the pandemic.
The final rule on how the money can be spent takes effect April 1 and includes a more expansive definition of the broadband projects that qualify. Treasury said the final rule "significantly broadens eligible broadband infrastructure investments to address challenges with broadband access, affordability, and reliability."
Under the interim rule the money could only go to boost broadband for unserved or underserved areas, something Republicans supported. Under the final rule it can be used for "projects designed to provide service to households and businesses with an identified need for additional broadband infrastructure investment, which would include but not be limited to a lack of broadband service reliably delivering certain speeds." That means projects promising lower costs for higher quality service than existing broadband could be subsidized with government money.
The Biden Administration had signaled it would include price and reliability in its definition of where broadband is available. "[E]ven in areas where broadband infrastructure exists, broadband access may be out of reach for millions of Americans because it is unaffordable," Treasury said by way of explanation.
The interim final rule had also required that the money only be spent on projects unlikely to be undertaken with private capital, but also dropped that from the final rule.
Republicans consistently want a definition that focuses on where broadband is actually built out so that government money is not spent on overbuilding existing service.
In a letter to Treasury Secretary Janet Yellen, Sen. Roger Wicker (R-Miss.) who is the ranking member of the Senate Commerce Committee, joined with 10 other Republicans to express their "deep concern" with the final rule.
"The final SLFRF rule increases the risk of overbuilding existing broadband investments. First, the final rule eliminates a key requirement that eligible broadband projects provide service to unserved or underserved households or businesses that lack access to minimum speeds of 25 Mbps download/3 Mbps upload. Instead, recipients can invest in projects designed to serve locations with “an identified need for additional broadband infrastructure investment”—a vague and subjective standard. The rule also permits recipients to invest in projects regardless of whether there is an existing federal or state funding commitment. As a result, the final rule will allow SLFRF recipients to fund projects in areas where broadband service is already or will be available – while continuing to leave truly unserved areas in our states without access to broadband.
Other final rule highlights:
1. As did the interim rule, the final rule prioritizes fiber infrastructure and last-mile connections.
2. As did the interim rule, the final rule requires broadband buildouts to reliably meet 100 Mbps symmetrical speeds (upload and download).
3. While it is not a mandate, the rule encourages states and localities to require a least one low-cost broadband option without data usage caps and at speeds that will be sufficient for multiple users teleworking or remote learning at the same time.
4. As did the interim rule, the final rule encourages money recipients to prioritize the money for municipal, nonprofit or cooperative networks. ■
Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.
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