Fiber for Breakfast Week 25: Show Me the Money – A Fiber Funding Overview

Fiber for Breakfast Week 25: Show Me the Money – A Fiber Funding Overview

September 17, 2020

Building out fiber networks can be an expensive process. But in order to close the digital divide, more broadband needs to reach more Americans—which is why in addition to private funds and public private partnerships, many government agencies offer funding to incentivize building or allow subsidies to those in need of connectivity.

At a recent Fiber for Breakfast live video series, two experts discussed the landscape of fiber funding. Moreover, they talked about how the pandemic might shift policymaker thinking on how—and when—networks are funded.

“The good news is policymakers understand the importance of broadband to our economy and to getting people connected,” said Kim Bayliss, principal at Perry Bayliss Government Relations. “What we’re seeing with COVID is people are being quarantined and schools are going online and not all broadband networks are created equal. The government has a role to play in ensuring those dollars are directed to networks that are going to be sustainable, support symmetrical applications and give people the internet they need.”

Currently there are several programs on the federal, state and local level that support different forms of fiber funding. Some of the most well-known are the Federal Communications Commission’s Connect America Fund/Rural Digital Opportunity Fund and the U.S. Department of Agriculture’s RUS Re-Connect program.

The FCC’s Universal Service Fund provides billions in funding for differing types of broadband access. These include lit and dark fiber networks, rural networks and those servicing schools and libraries. The USDA’s programs provide less funding, but focus on rural areas where a majority of the households lack 10/1 mbps.

Carol Mattey, principal at Mattey Consulting LLC, said these are just some examples of the funding available to those building out fiber networks. Within these programs are several different types of subprograms, each with their own eligibility requirements to assess who gets what money and when.

She said many people assume if they qualify for one program, they’re not allowed to go for other publicly funded dollars. But that’s just not true.

“It’s very important for anyone interested in getting funding to survey the landscape and to understand the particular details of each program and how they fit together,” Mattey said.

It’s also essential to not just pursue one type of public funding choice. More than 30 states in the U.S. have grant programs related to broadband, and within those states individual county governments and regional authorities have even further incentives. On top of that, the pandemic has surged a new type of funding. Under the CARES and HEROES acts, extra money has been injected into varying programs.

“I’ve got clients that have accessed federal funding from the FCC, have gotten state funding from a state program and they’ve gotten funding from a county or local government as well,” Mattey said. “There are programs on all sides, as well as many programs that have basically been kicked off quickly in the wake of the CARES Act.”

Mattey and Bayliss said while the amount of funding right now is encouraging, it is not sufficient to build out fiber everywhere that it is needed. There are still significant hurdles to understanding where fiber is needed the most.

But the pandemic has exposed how bad broadband access is in several areas of the country—whether that’s a lack of speed, poor upload speeds or no connectivity at all. Bayliss said lawmakers are starting to wake up, and connectivity is becoming a hot issue.

“We’ve been talking [in the U.S.] for years of the need for infrastructure funds to help roads and build bridges,” she said. “What’s happening now is Congress is realizing that broadband is a critical infrastructure and COVID has shown that it is also in need of repair.”

She said right now there are hundreds of bills between the House and the Senate that tackle broadband issues, many of which were exacerbated by the pandemic. But building out networks take time, and we may not see the fruits of these labors for another five years down the road.

“Policymakers realize it’s a problem that they need to solve now, but you can’t just click your fingers and have all these networks just spring up overnight,” Bayliss said. “It requires construction, planning and it takes time to make it happen. There is a new focus on getting them built out faster.”

All of this is encouraging to both Mattey and Bayliss. As more money is injected into programs for broadband, it’s on businesses in the industry to take advantage of what is there and also to advocate for further funding. Bayliss said companies should be watching what is happening on Capitol Hill and talk to their representatives about why this type of funding is important.

“I would say the odds are good that Congress will step in and provide some sort of funding for broadband infrastructure builds,” Bayliss said. “Companies who want to see that happen should reach out to their individual lawmakers because having specific information about why the money is needed or how it’s going to be used is super important to their knowledge base, and it helps push these efforts along.”

Join us for our next Fiber for Breakfast live video series on Wednesday, Sept. 23 at 10 am ET. The topic: Designing and Working in the Business Ecosystem – Moving Beyond Traditional Business Models.