Just How Important Is Funding for a Reliable Internet Connection?
Article Courtesy of David Harrison, Technology Account Manager
Current events surrounding the pandemic have revealed not just the importance and desirability of a reliable internet connection but also its necessity. As we are all adjusting to a temporary new normal, most of us have found ourselves leaning upon our connections to the internet so that we may remain connected to our families, friends, and our ability to perform our jobs as best as we are able. For us at Gresco, this has been no different. In this multipart series, we will be discussing all the pieces that go into building and maintaining a reliable internet connection. In part one, we will look at some of the most recent funding updates and how this fits in the process of offering broadband to bridge the digital divide in our rural communities.
There has been increased awareness of the need for rural communities to have access to the internet. However, like the gap for those who don’t have access, there is also a financial gap that needs to be closed. In the last few years, there has been adoption of legislation enabling more and more cooperatives to offer broadband services. One of the most important pieces in the broadband puzzle is funding. This has gained more focus on a federal level as shown in April of 2017, when the U.S. Department of Agriculture (USDA) started the Interagency Task Force on Agriculture and Rural Prosperity. This task force was established to identify challenges that would arise for rural areas that need access to the internet. In January 2018, the task force published their recommendations for increasing their financial support for rural infrastructure and did so in the form of the Broadband ReConnect Program. The initial pilot program was announced with an award of $600 million to help expand broadband infrastructure. This was made available to applicants nationwide in June of 2019 and, subsequently, awards were announced beginning in December 2019. A second round was announced in January 2020, with an additional $550 million added to the award fund. The application window for this second round was set to close April 15th, 2020. While the changing regulations, the adoption of legislation to allow electric cooperatives to offer internet service, and the creation of a task force have all worked to help bridge the divide, this is just part of a group of initiatives to fill the void for broadband in rural areas.
ReConnect was a big step towards highlighting specific rural needs for broadband. However, this is not the first time funds have been made available for providers. In 2013, the Federal Communications Commission (FCC) announced the Connect America Fund (CAF) and then a subsequent CAF II Fund in 2018. The CAF II also saw some significant reform; the format was updated to a reverse-auction type of bidding process, which is a timed process where the lowest bidder wins instead of the highest bidder. In August of 2019, the FCC proposed a new fund focusing more on rural communities. This was announced as the Rural Digital Opportunity Fund (RDOF). RDOF will provide $20.4 billion in funding over a ten-year period to support the construction of broadband networks in rural communities across the country. This will be available to co-ops with eligible areas without current (or already funded) access to adequate broadband service, defined by the FCC as 25 Mbps downstream and 3 Mbps upstream (25/3). RDOF will be released in two phases. Phase 1 will provide up to $16.4 billion worth of funding focusing on census blocks that are entirely unserved by voice and broadband with download speeds of at least 25 Mbps. Phase 2 will provide at least $4.4 billion for census blocks that are partially served, as well as locations not funded in Phase 1. The Phase 1 auction is scheduled to begin on October 22, 2020. Interested providers may submit a “short form” application to the FCC and apply for approval to bid in the RDOF Phase 1 auction. The anticipated short form deadline is June 2020. However, since it will also be a multi-round, descending clock reverse auction like the previous CAF II, it will look to a system of bidding and weights to award funds based off of the current cost allocation models and census block allocations. All that to say, there will be many variables that will need to be considered if you choose to participate in either or both phases. Some of these are (but not limited to): if your areas are considered underserved or unserved; internet speed to be offered; what it will cost you to build per subscriber; and what you will charge to each subscriber. That’s why it’s critical to determine whether you have a sustainable business case before applying for RDOF funds.
Finally, to view a recently released map of the initially eligible areas, please click here: https://www.fcc.gov/reports-research/maps/auction-904-preliminary-eligible-areas.
As your known and trusted partner for all your materials and logistics needs, Gresco is happy to help with any questions you may have regarding funding. For assistance, please contact us at [email protected] or 478-315-0810.