By Ziggy Rivkin-Fish, CGEIT, VP for Broadband Strategy

Are you trying to get more secure footing in a shifting broadband landscape? You’re not alone. Between existing and potential funding programs, it’s very challenging to plan in the current moment.

For example, as we discussed in a previous paper, the results of the Rural Digital Opportunity Fund (RDOF) reverse auction and the pending rules for a range of new federal broadband funding programs have created some uncertainty about whether RDOF-awarded areas will be eligible for other streams of federal broadband funding.

This uncertainty leaves many communities’ grant planning efforts in flux at a time when Congress has allocated historic amounts of new funding for broadband infrastructure. Based on what we know now, we offer the following preliminary guidance to communities about preparing for new federal funding opportunities.

The moving pieces

Two unknowns will determine how RDOF awards will affect communities’ eligibility for other federal funding programs:

• Whether the FCC will ultimately certify RDOF awardees. While the FCC technically has awarded geographic areas to auction bidders, it is still going through the process of reviewing bidders’ detailed technical and financial information. The possibility remains that the FCC could retract awards if it is not confident that a bidder will meet its commitments. In particular, fixed wireless and satellite providers’ (e.g., SpaceX’s Starlink) network designs are likely to face scrutiny.
• What the new funding programs’ rules will look like. Several new broadband funding streams have been created in the past few months, including multiple programs enacted by the Consolidated Appropriations Act of 2021 and robust funding allocations included in the American Rescue Plan Act of 2021 (ARPA).

These programs are so new that their rules are still being developed by the agencies that will administer them—so we do not yet know how they will consider areas that have already received federal funds (such as RDOF awards). Some existing broadband funding programs have chosen to disregard RDOF in their latest funding rounds. For example, the Appalachian Regional Commission is not considering RDOF awards at all in the current application cycle for its Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) program.

Funding streams to consider

The legislation that enabled NTIA’s new broadband funding programs explicitly stated that NTIA should coordinate with other federal agencies to ensure that the same project area is not funded by more than one agency. While there is precedent for satellite-awarded RDOF areas to be exempt from such a rule, most areas that were awarded to RDOF winners likely will be excluded from receiving funds from NTIA’s new programs.

The various broadband-relevant allocations of ARPA stimulus funding could be more attractive opportunities. The legislation itself places few restrictions on the use of the funds, simply mentioning broadband infrastructure as an eligible expense.

The $220 billion State Fiscal Recovery Fund and the $130 billion Local Fiscal Recovery Fund leave spending guidelines entirely up to state and local authorities, respectively. For the $10 billion Capital Projects Fund, guidance from the Department of the Treasury is anticipated in the near future, and will provide further information regarding restrictions and parameters.

States and localities can certainly develop their own criteria for evaluating projects and distributing ARPA funding, though, and broadband projects will have to compete against other capital infrastructure proposals and priorities. Additionally, it is highly likely that the telecom industry will lobby to prevent funding of broadband projects that would compete in their existing service areas.

Despite these hurdles, the ARPA funding presents a chance to build fiber optic infrastructure that will last for decades in areas where RDOF commitments have a high risk of not materializing, or where existing coverage is spotty or barely meets broadband speeds. In other words, areas that face challenges in qualifying for eligibility within traditional broadband funding frameworks could be viable candidates for ARPA funding.

ARPA funding could also resolve a blind spot in FCC auctions and traditional grant frameworks such as ReConnect: These types of programs typically exclude backhaul and middle-mile infrastructure that could lower barriers of entry for ISPs—which in turn could facilitate not only the extension of service to unserved areas, but also competition in already-served areas. ARPA funding could also potentially be used to pay for broadband strategic planning, including granular mapping and the development of programmatic solutions to facilitate broadband adoption.

Finally, we can consider the second round of RDOF. The FCC may fix and retain the reverse auction format, particularly if there are sufficient non-awarded areas after the first round—areas that either were ultimately rejected in the first round of RDOF or those that the FCC newly deems eligible. The auction format may yet be salvageable—if designed and executed correctly, with full and robust enforcement of bidder obligations. (That said, we hope that reverse auctions will be supplemented by more robust merit-based grantmaking at both federal and state levels, to address the inherent limitations of the reverse auction mechanism.)

The second round of RDOF, in whatever form it may take, will have a longer timeline than other federal funding sources since it will rely on the implementation of the FCC’s new address fabric and mapping data.

Even prior to the auction itself, former FCC Chairman Ajit Pai was criticized for rushing to design and execute the process, and for relying on poor and misleading mapping data to determine eligible areas. Former Chairman Pai argued that it was preferable to work quickly to solve the problem for most areas in need, and tackle the remaining areas later when better mapping data became available. This decision to conduct the auction before more accurate maps were ready has created a patchwork of isolated unserved areas, which are no longer fit for an auction format because only nearby incumbents would have a viable business case to serve them.

What should communities do?

In light of these moving pieces—and the potential funding streams—we recommend communities take the following steps to develop a funding strategy and position themselves competitively for federal dollars:

An RFP or RFI can also be an excellent vehicle for addressing community priorities. For example, it could address affordability concerns by capturing ISPs’ proposed fees and willingness to participate in subsidy programs. These elements could be considered as a scoring element for potential partners.

• Explore potential partnerships. If you already know the areas of your community that are served and unserved by broadband, reach out to potential partners directly or write a request for proposals (RFP) or a request for information (RFI) to get a better understanding of potential partnerships. It can be a good strategy to target larger geographic areas at the outset and refine the service area later to reflect factors such as partner priorities, community need, and funding eligibility.
  
  Additionally, any critical anchor institutions such as public housing, community centers, or first responder units that lack adequate connectivity can be included as priorities in the RFP or RFI. Lastly, the RFP/RFI document or the contract agreement with a partner can include performance and auditing requirements as a partnership condition.
  
  Additionally, any critical anchor institutions such as public housing, community centers, or first responder units that lack adequate connectivity can be included as priorities in the RFP or RFI. Lastly, the RFP/RFI document or the contract agreement with a partner can include performance and auditing requirements as a partnership condition.
  
  Throughout this process, do not limit yourself to working with incumbent service providers. If there are RDOF areas in or near your community, you can use the FCC auction results portal to see which ISPs bid in various auction rounds. Even if they did not win the auction, these providers may be willing to build in your community if sufficient support is available.

• Develop a community mapping initiative. If a broadband mapping effort is not already underway in your community, it would be a valuable project to pursue. In some cases, especially if there is a potential partnership on the table, incumbent ISPs will share their actual network maps. The local school district may also have data about which neighborhoods have broadband gaps.
  
  Creating a robust mapping effort to identify served and unserved areas is not just critical for identifying areas eligible for federal funding, but also for having the capability to challenge provider claims when the new FCC mapping program—which will rely on providers’ data—comes online. The FCC’s draft rules for the process explicitly give local governments the ability to challenge providers’ service claims.

• Watch for updates from the FCC. It is prudent to keep a close eye on FCC announcements of RDOF bidder certifications or denials, to understand whether any areas will open up for second-round bidding (or other funding) in your community.
• Build support for a broadband project. Finally, make sure your executive stakeholders are in the loop and supportive of project priorities. At minimum, you may need their approval, and you may need a pool of matching funds available, too, depending on the funding program. It is never too early to start having internal conversations about how to gather community resources behind a potential broadband initiative.

CTC’s Grant and Funding Strategies team continues to analyze the latest funding developments. Please contact us if you have questions or would like to discuss how CTC can assist you.