As expected, the U.S. Treasury Department has stuck with the program of tying broadband subsidy money to high internet speeds, and with a priority on municipal networks and a thumb on the scale for affordability.
In its just-issued guidance for the COVID-19-related capital projects fund in the American Rescue Plan, Treasury outlined how the the $10 billion available to states for "high-quality broadband infrastructure as well as other connectivity infrastructure, devices, and equipment," should be spent and which providers would be eligible to get it.
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To get the money from a state (territory or tribal government), an ISP must deliver infrastructure that delivers upload and download speeds of 100 Mbps, or, if that is impracticable, at least 100 Mbps downstream and no less than 20 Mbps upstream.
The project has to address some impediment to the community's access to work, education and health monitoring that resulted from or was exposed or exacerbated by the COVID-19 pandemic.
Treasury encourages the money to be focused on last-mile projects--connections to the home or school or library — and to “prioritize investments in fiber-optic infrastructure where feasible, as such advanced technology better supports future needs.”
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The President had signaled municipal broadband should get priority consideration, something ISPs opposed. Treasury advised that approach, saying fund recipients were encouraged "to prioritize projects that involve broadband networks owned, operated by or affiliated with local governments, non-profits, and co-operatives," explaining that those providers will have "less pressure to generate profits and with a commitment to serving entire communities."
While there is no affordability requirement, recipients are encouraged to develop plans that recognize that affordability is a barrier to "full use" of the 'net.
Treasury also issued lists, though non exhaustive, of eligible and ineligible costs.
Eligible costs include:
• “Costs associated with completing the grant or Application and Grant Plan;
• ”Pre-project development costs and uses, including data-gathering, feasibility studies, community engagement and public feedback processes, equity assessments and planning, and needs assessments; permitting, planning, architectural design, engineering design, and work related to environmental, historical, and cultural reviews;
• “Costs of repair, rehabilitation, construction, improvement, and acquisition of real property, equipment (e.g., devices and office equipment), and facilities (e.g., telecommunications equipment, including infrastructure for backhaul, middle, and last mile networks);
• “Cost of long-term leases (for terms greater than one year) of facilities required to provide qualifying broadband service, including indefeasible right-of-use (IRU) agreements and capital leases;
• “Personnel costs including salaries and fringe benefits for staff and consultants required for carrying out a Capital Project (such as project managers, program directors, subject matter experts, equity consultants, grant administrators, financial analysts, accountants, and attorneys);
• “Ancillary costs necessary to operationalize and put the capital assets to full use, including costs to increase broadband adoption and improve digital literacy;
• “Costs associated with monitoring of and reporting on Projects in compliance with Treasury requirements, including award closeout costs;
• ”Costs associated with collecting and measuring performance data and conducting activities needed to establish and maintain a performance management and evaluation regime related to Projects funded by the Capital Projects Fund program.”
Ineligible costs include:
• “Acquisition of spectrum licenses;
• “Operating expenses, other than grant administration costs;
• “Short-term operating leases;
• “Payment of interest or principal on outstanding debt instruments, or other debt service costs incurred prior to March 15, 2021;
• “Fees or issuance costs associated with the issuance of new debt;
• “Satisfaction of any obligation arising under or pursuant to a settlement agreement, judgment, consent decree, or judicially confirmed debt restructuring plan in a judicial, administrative, or regulatory proceeding; or
• ”To support or oppose collective bargaining. This does not affect the ability to use funds to comply with 41 C.F.R. 60-1.4.”
In response to the Treasury guidelines, Mignon Clyburn and Chip Pickering, co-chairs of INCOMPAS's BroadLand USA universal broadband campaign, said they were pleased.
“By speeding up broadband speed goals, the Treasury Department is helping American consumers and small businesses avoid crashes that slow down their ability to work and learn," Clyburn said. ”We commend the Treasury Department for taking a smart look at the broadband speed needs of our small businesses and putting forward guidelines for the Capital Projects Fund that increase speeds and call for building scalable, symmetrical networks that reflect marketplace demand and global competition.”
“By prioritizing networks of the future fed by fiber and both middle-mile and last-mile connections, the Treasury Department’s new goals will help move our broadband network infrastructure from the monopoly era into a new age of competition that will bring more investment, innovation and jobs for all Americans,“ said Pickering.
