Making Broadband a Key Part of States' Economic Recovery

Making Broadband a Key Part of States' Economic Recovery

Over 2,600,000 jobs were lost in 2008. Many of these jobs are in traditional sectors that are unlikely to return, so investing in both the infrastructure and job skills needed for a digital economy are critical to reviving long-term economic growth. Unfortunately, as acting FCC Chairman Michael Copps said last week, "[t]oo few consumers and small businesses in this country have the high-speed broadband they need.... We pay too much for service that is too slow.” To emphasize his point he highlighted a study by the International Telecommunications Union that found the United States now ranked 17th in global broadband penetration. Lack of affordable broadband access undermines the international competitiveness of our communities and workforce.

America has always realized the importance of investing in traditional infrastructure, such as roads, bridges, railways and waterways. These infrastructure systems have enabled the United States's remarkable economic growth of last century, and we have willingly financed their construction, maintenance and upgrades. With the recently passed American Recovery and Reinvestment Act of 2009, our nation has committed an unprecedented amount of money to initiatives aimed at improving our digital infrastructure. These initiatives focus on increasing access to and adoption of affordable broadband technology. Rick Wade, Commerce Department senior advisor and acting chief of staff, stated that "both Commerce and USDA’s broadband programs represent a critical component of the administration’s broader economic recovery program.” 

As the $7.2 billion of direct broadband funding and pockets of other funding for digital infrastructure throughout the ARRA demonstrate, the Obama Administration sees broadband as a catalyst for spurring job creation and economic growth. Further, it is an integral tool to improve health care access, energy management, public safety and transparency; and a mechanism to increase educational, civic participation and social opportunities.

The Current Digital Divide: Unfortunately, as we become increasingly dependent upon advanced communication and information technologies, people with less access to broadband or with fewer digital skills become increasingly disadvantaged financially and have fewer opportunities. Currently, nearly 20 million Americans do not have access to a single high-speed Internet provider, and only an approximate 60 percent of American households subscribe to broadband service. Many of those who do not subscribe to broadband do so because they lack a comprehensive understanding of the benefits of broadband and how it can improve their lives. Others lack the necessary digital skills or the ability to afford broadband or related technology.

The 21st century has transformed our economy and broadband access and digital skills are now critical for the job search and application process, as well as a substantial number of employment opportunities. Additionally, access to and the ability to utilize high-speed Internet services is key to making telehealth opportunities a reality, using online government services and taking advantage of remote educational opportunities. Without that access, living standards in the U.S. will fall and inequality will rise.

States Taking Action: With new help from the federal government, states are increasingly taking action to bridge the digital divide -- creating policies to promote access to and adoption of broadband to ensure that a greater equality is created between the technological haves and have-nots. To increase access to and adoption of broadband while creating a more inclusive network, states should pursue two courses of action: (1) establish Broadband Strategy Councils and (2) support digital inclusion programs. Broadband Strategy Councils should be used to devise a strategic approach to broadband initiatives and ensure that broadband investments correlate with other state goals. Digital inclusion initiatives will help ensure all residents have access to broadband and the necessary skills and hardware to utilize the technology.

This Dispatch will outline how funds allocated in the ARRA aim to support broadband initiatives and how states can leverage broadband to create efficiencies, increase opportunities and begin to bridge a major resource divide in our country by implementing progressive broadband initiatives.

Table of contents
- Broadband and the Federal Recovery Plan
- State Broadband Strategy Councils
- State Digital Inclusion Campaigns
- Conclusion

Broadband and the Federal Recovery Plan

Under the legislation the NTIA was directed to:

Ӣ Award at least one NTIA grant to each state;

Ӣ Dispense grants by September 30, 2010, but funds will continue to be disbursed up until two years after the grant is made.

”¢ Make awards on a “technologically neutral” basis. 

Ӣ Fund only projects that adhere to the Federal Communications Commission's Internet nondiscrimination and openness principles;

”¢ Promote projects that will "provide the greatest broadband speed possible;”

”¢ Consult with state governments to determine which areas are "unserved" and “underserved;”

Ӣ Consult with states when determining how to allocate grants within that state;

Ӣ Consider whether an application to deploy infrastructure in an area will increase the affordability of and subscribership to broadband, preferably to the greatest population of users in the area;

Ӣ Consider if the initiative will provide the greatest broadband speed possible to the most users in the area;

Ӣ Consider if the initiative will enhance service for health care delivery, education, or children to the greatest population of users in the area; and will not result in unjust enrichment as a result of support for non-recurring costs through another Federal program for service in the area;

Ӣ Consider whether or not the applicant is a socially and economically disadvantaged small business;

Ӣ Eligible services are not limited to end-user broadband services. It appears that backhaul, middle-mile, wholesale transit, tower services, are eligible projects.

Grant applications must include, among other things, the following information:

Ӣ A demonstration that projects receiving money will be substantially completed in two years;

”¢ A demonstration that an entity can meet the grant’s 20% matching requirement (the federal government will pay up to 80% of the cost) or is eligible for an economic hardship waiver;

Ӣ An explanation of how any amount received under the program will carry out the objectives of the legislation and be used to an efficient and expeditious manner. Additionally, the law requires that, the project would not have been implemented, within the proposed timeframe, but for the federal grant;

Ӣ Demonstrate, to the satisfaction of the grantors, that it is capable of carrying out the project or function to which the application relates in a competent manner in compliance with all applicable federal, state, and local laws.

The American Recovery and Reinvestment Act allocates $7.2 billion to promote broadband programs. The majority of the funding will be used to increase broadband access in rural, unserved, and underserved areas. Additionally, funding is provided to support community programs that encourage broadband adoption in low-income communities, for initiatives that expand public community centers' capacity and to fund the development of a national broadband map.

The National Telecommunication and Information Administration (NTIA) and the Rural Utility Service (RUS) will be charged with distributing the grants and loans. Eligible grant applicants may apply for either or both the RUS and the NTIA grants, but if they are awarded funds by both agencies, only money from one agency can be used for a specific project. The NTIA will issue its first “notice of funds availability” in April to June of 2009, the second round would be between October and December 2009, and the third round between April and June 2010. 

According to the Baller Herbst Law Group, in addition to funds appropriated directly for broadband, other funding streams in the ARRA may present substantial opportunities to use stimulus money to further broadband initiatives, if efforts are effectively coordinated ahead of time.  For example, ARRA funds allocated for health information technology projects and smart grid initiatives could be leveraged to support broadband deployment.

National Telecommunications and Information Administration: The NTIA was allocated $4.7 billion in total. The majority of the NTIA funds, $4.35 billion, will be distributed to states, political subdivisions of states, municipalities, non-profits or private companies through the Broadband Technology Opportunities Program. In addition to grants aimed at increasing access to broadband, at least $250 million of the NTIA funds are set aside for competitive grants for programs that encourage sustainable broadband adoption, while at least an additional $200 million in grants are set aside for expanding public computer center capacity. It is important to note that the bill sets a floor, not a ceiling, for programs that focus on broadband demand. Another $350 million will fund the Broadband Data Improvement Act to support broadband inventory mapping and community initiatives. For more specific information regarding initiatives covered under the Broadband Technology Opportunities Program click here.

State role: States will likely play an advisory role to the NTIA in the distribution of grants since they have specific and unique knowledge on residents needs, existing programs, and how broadband can be integrated into long-term state goals.   Grass-roots groups and any applicant applying for ARRA broadband funding should contact their state legislator and make them aware of the application they are filing.

Another role that will be imperative for states to play, although not laid out specifically in the ARRA language, is that of watchdog. Since many of the federal grants may be going to private companies, non-profits, or other non-government entities, it is important that the state ensures that selected projects reach the intended populations and are implemented in the public interest. 

Rural Utility Service Grants and Loans: The Rural Utility Service (RUS) will appropriate $2.5 billion in grants and loans. In order to receive a grant from the RUS, 75% of the area being served must be rural and without sufficient access to high-speed broadband to facilitate rural economic development. Priority will be given to applications for broadband systems that will allow end users to have a choice of more than one service provider, to projects servicing the highest proportion of rural residents, and to previous borrowers or current borrowers under Title II of the Rural Electrification Act of 1936. For more specific information regarding what programs are eligible to receive RUS grants and loans click here.

States Taking Action Will Further Reform: The ARRA's commitment to use broadband to create efficiencies throughout many different sectors of society underscores the importance of state broadband legislation. State legislators across the country are taking action to spur strategic implementation of broadband initiatives and increase broadband adoption. Moving these policies across multiple states helps reinforce the message that we need to eliminate the digital divide. With broad and decisive enough action, states can help lead the way to even bolder federal reform. A key goal is to use these initiatives as a means to generate support for increased investment in broadband and and as motivation to leverage new broadband technologies to improve our economy, implement environmentally friendly and energy-efficient policies, and increase health care, education and social opportunities.

Baller-Herbst Law Group,The American Recovery and Reinvestment Act of 2009, Opportunities for Federal Grants, Loans and Other Support for Broadband Projects 

Free Press - Accessing the Current Digital Divide Brochure

Leadership Conference on Civil Rights — Solving the Persistent Problem of the Digital Divide
OECD - OECD High-speed Internet Portal Household Census Information 2007
Educause White Paper - A Blueprint for Big Broadband
National Governors Association - States Take Action to Expand Access to High-speed Internet Communication
Progressive States Network, Guide to Broadband Provisions in the American Recovery and Reinvestment Act

Free Press, A Roadmap for Stimulus Success

U.S. Census

State Broadband Strategy Councils

Despite the clear and well documented benefits of broadband, many regions are still unserved or underserved by broadband providers. In order to ensure that states remain competitive in the 21st century, state legislators are creating Broadband Strategy Councils that focus on increasing access to and adoption of affordable broadband. Such entities can help leverage broadband technology across various sectors, such as government, health care, energy management and education to create efficiencies, save money, increase transparency and provide better services and increased opportunities.

Thus far in 2009, numerous states have introduced or considered implementing some form of a Broadband Strategy Council. A few examples of initiatives taking place across the country are:

  • MD: H.B. 1121, authored by Delegate Hucker, establishes a broadband strategy council to focus on increasing access to and adoption of affordable broadband and outlines specific broadband data to be collected and mapped. It includes accountability metrics if a third-party contractor is hired to collect and map the broadband data.
  • RI: H.B. 5396, authored by Rep. Rice, creates a broadband strategy council to study and recommend the adoption of high-speed Internet services and technology throughout Rhode Island for the benefit of the state's citizens and employers. This bill emphasizes that digital inclusion initiatives should be established as long term components of a community's offerings to its citizens and an ever-present vehicle to help Rhode Island meet a variety of economic, health care, environmental and educational goals.
  • OR: H.B. 3158, authored by Rep. Smith, establishes an Oregon Broadband Advisory Council focused on encouraging and supporting the deployment of broadband telecommunications services and reducing barriers to broadband adoption, especially within unserved and underserved populations.  The council is tasked with encouraging coordination between different organizations and sectors that can leverage broadband to their advantage, such as, state agencies, workforce development training programs, healthcare providers and educational institutions.
  • IN: H.B. 1621, sponsored by Rep. Pierce, creates an Indiana Broadband Deployment Council to develop a strategy for expanding the deployment and adoption of broadband services in Indiana. Among other things, the council was tasked with increasing access to broadband in underserved areas, promoting affordable broadband service throughout Indiana, initiating and supporting the development of broadband services and resources, including establishing technology literacy and digital inclusion programs and establishing low cost hardware and software purchasing programs.
  • TX: S.B. 640, sponsored by Senator Ellis, establishes an Authority and Cooperation regarding technology infrastructure.
  • AK: H.B. 107, sponsored by Rep. Guttenberg, establishes the state Internet Access Authority and the state Broadband Task Force.
  • CT: H.B. 6426 aims to improve broadband access and enlists a public-private partnership to implement a high-speed Internet deployment plan that will ensure all Connecticut residents and businesses access to affordable broadband service and will increase technological literacy.

Any legislation establishing a broadband strategy council should require the council to:

  • Engage in long-term planning and establish clear deployment goals and accountability metrics: Councils should develop a statewide strategic approach to broadband deployment, including integrating broadband build-out with long-term state goals and creating metrics for succcess.
  • Promote cooperation across diverse stakeholders: Councils should consist of diverse members representing various stakeholders, experts, government and agency leaders who are able to develop a "big picture" build-out strategy that provides increased access to affordable broadband and protects the public interest. Additionally, councils should provide a forum for public/private collaboration that allows states to work with privately owned providers to expand services in underserved and unserved areas.
  • Help spur demand: Councils should create increased affordable access to broadband and encourage private corporations to act in the public interest. Under the terms of Minneapolis, Minnesota wireless project, which many consider the most successful municipal high-speed Internet program to date, the city is functioning as an "anchor tenant", paying $1.25 million a year for the city's own use of the network. Since the city agreed to be the “anchor tenant,” U.S. Internet built the high-speed network with no public financing. Additionally, U.S. Internet is providing a comprehensive set of community benefits that surpass negotiations by other cities in the country, including a $500,000 initial payment and a commitment to dedicate at least 5% of its profits to create and maintain a “digital inclusion fund” that will be geared at promoting affordable Internet and hardware access and digital skills training. 
  • Meet federal requirements for matching grant and other funding opportunities to expand funding for these projects.
  • Protect innovation by municipalities: For example, Illinois Senate Bill 2244, introduced in 2008, included a specific statement making it clear that "nothing in the deployment council enacting legislation should be construed to limit the ability of any municipality, county, or other unit of local government to undertake local high-speed Internet projects and related functions."  As the Illinois legislation set out, councils should protect municipalities ability to undertake local broadband projects

Across the board, states should be studying not only how to extend physical connections to broadband Internet but also how to assure that it is affordable, especially for working families suffering the most during the current economic downturn.

Final Report of the California High-speed Internet Task Force - State of Connectivity: Building Innovation Through High-speed Internet
Progressive States Network - Guiding Principles for Broadband Strategy Councils

State Digital Inclusion Campaigns

State broadband initiatives that focus on increasing affordable access to broadband only help address the supply side of the digital divide equation. To ensure that all citizens can take part in the digital age, especially as more government programs, jobs, education and health care institutions expand their use of advanced technology, states should implement Digital Inclusion Campaigns.

The Washington Model: During the 2008 legislative session Washington State, in large part thanks to the Communities Connect Network, took an aggressive step to increase digital literacy. The Washington State legislature allocated $500,000 to support Washington's Community Technology programs. Senate Bill 6438 created a statewide high-speed Internet development process and established the Community Technology Opportunity Program (CTOP) that will provide resources for capacity-building and grant-giving to Community Technology programs that provide hands-on technology access and training to residents. Additionally, the legislation called for the development a statewide web directory of Community Technology programs.

This legislative session Senator Kohl-Welles introduced Senate Bill 5916 to continue the community technology opportunity program. In addition, the bill aims to assist Washington’s broadband efforts by positioning the state to receive Federal stimulus dollars that will allow Washington to expand broadband access infrastructure. “This is about bettering our citizens’ lives. By eliminating the digital divide and promoting digital inclusion in underserved areas, particularly in rural parts of the state, we help to enhance education opportunities, increase access to high-paying jobs, health care, government and community economic development,” said Sen. Jeanne Kohl-Welles. Senate Bill 5916 was passed unanimously by the Washington State Senate and now moves to the House.

Investing Beyond Infrastructure: Digital inclusion programs look beyond physical infrastructure, and instead address adoption issues that are at the heart of the digital divide. Under the broad umbrella of digital inclusion falls educating the public on what broadband can do to improve their lives, providing digital skills training, increasing relevant content on the Internet, and providing access to hardware and software. State initiatives to increase digital inclusion and the everyday use of technology must address all three major causes for lack of broadband adoption.

  • Digital Empowerment: States need to educate the public on the benefits and opportunities provided by 21st century technologies. Many individuals without broadband access do not understand the benefits and practical applications of broadband and new technology. States need to facilitate discussions about, and publicize how, technology is tied to economic development, better health care, implementing environmentally friendly policies, better access to information and increased opportunity.
  • Affordable Access to Technology and Digital Training Programs: Individuals must be provided access to technology and digital skills training which will teach them how to utilize and reap the benefits of 21st century infrastructure.  Any digital inclusion program should target underserved populations and must address both sides of the digital divide equation, access and adoption. The elements that help increase access to technology and digital skills are community technology centers, technology recycling programs, leveraging of state buying power and public/private partnerships.
  • Long-Term Sustainability: Any digital inclusion initiative must be tied to the overall goals of a state to ensure long term sustainability. Digital inclusion initiatives should be seen a means to help state meet a variety of economic, health care, environmental and educational goals. 

Maria E. Wynne and Lane F. Cooper, A Road Map Toward Digital Inclusion: Digital Inclusion Imperatives Offer Municipalities New Social and Economic Opportunities
Progressive States Network- Guiding Principles for Digital Inclusion Policies
Progressive States Network- Increase Technology Literacy and Inclusion
San Francisco Digital Inclusion Strategy
Digital Inclusion Forum
Communities Connect Network


The ARRA marks a departure from previous policies that facilitated the U.S. decline in numerous global broadband rankings, and can be, if managed and supported correctly, the beginning of a new vision for the 21st century. This vision includes a commitment to expanding access to and increased utilization of broadband, by individuals, businesses, health care providers, government entities, education institutions and even the energy sector. In order to remain a global competitor and to stay true to the basic concepts of equality and opportunity upon which our country was founded, the federal government and states must commit to investing in digital infrastructure and ensuring that every individual can afford and utilize broadband.