"From the farmer and the accountant in West Tennessee whose businesses are stifled, to the East Tennessee student who can’t complete her schoolwork at home, a lack of reliable internet access is preventing too many rural Tennesseans, rural communities and our state from reaching its full potential."—Gov. Bill Haslam (R-TN)

In 2016, the Tennessee Department of Economic and Community Development published research performed by Strategic Networks Group and NEO Connect aimed at answering four basic questions: 1) What is the technical definition of broadband? 2) How many Tennesseans do not have access to broadband? 3) What is the cost of bringing broadband to Tennesseans that do not have it? 4) What are best practices and lessons learned for promulgating broadband from around the country?

More than 23,000 Tennessee households and businesses participated in the assessment. Businesses participating in the assessment said broadband enabled 43 percent of all net new jobs and 66 percent of revenues. In addition, 34 percent of businesses classified broadband as essential to selecting their location, and 56 percent noted that it was essential to remain in their location. Sixteen percent of economic development agencies reported that businesses frequently chose not to locate in an area due to insufficient broadband.

At the time, 87 percent of households had access to broadband leaving 834,545 people without access. But existing broadband infrastructure was not fully utilized because 69% of businesses had speed tests below 25 Megabits per second (Mbps) download speed and 76 percent of households had speed tests below 25 Mbps download speed. Over half (54%) of households were connected with DSL, mobile wireless, satellite, or dial-up. Areas with more service providers had higher speeds for both businesses and residents. For example, the average download speed for businesses with access to only one provider was 22.5 Mbps while businesses with access to more than three providers averaged download speeds of 43.8 Mbps. Almost 5 percent of assessment respondents reported no internet at their home. Over half cited lack of availability as the cause; the second most frequent barrier was affordability. Only 2 percent said they did not need the internet. The research found it would cost $819,450,000 to $1,258,636,800 to build out fiber broadband networks to every area without 10/1 Mbps service—and $1,117,397,500 to $1,716,322,560 to build out to all areas without 25/3 Mbps broadband. 

The research identified six best practices for state broadband initiatives:

1. Strong public leadership that champions broadband projects;
2. State broadband office or similar entity;
3. Effective partnerships;
4. Public seed funding and grant programs to encourage investment and build out;
5. Transparency; and
6. Proper planning and due diligence.

The Tennessee Broadband Accessibility Act

In response to the research, then-Governor Bill Haslam (R-TN) proposed and eventually signed the Tennessee Broadband Accessibility Act in 2017. The law authorizes:

• Electric cooperatives to provide broadband internet access or related services; 
• The Tennessee Department of Economic and Community Development to establish and administer a broadband accessibility grant program:
  • Political subdivisions, cooperatives, corporations, limited liability companies, partnerships, or other business entities that provide broadband services are eligible for grants.
  • The program prioritizes serving locations lacking 10/1 Mbps broadband service, areas that demonstrate community support, and projects that have not received funds through other state or federally-funded grant programs designed specifically to encourage broadband deployment.
• A broadband accessibility fund;
• Awards to local libraries to offer digital literacy training; and
• The designation of "broadband-ready community" for political subdivisions that streamline their policies for reviewing applications and issuing permits related to broadband services projects.

The law provides $45 million over three years in grants and tax credits for service providers to assist in making broadband internet available to “unserved” homes and businesses throughout the state.

“In Tennessee, we’re committed to this idea that growth doesn’t have to happen just in some locations,” said Gov. Haslam as he signed the bill. “We love the idea there are rural areas that are part of what makes Tennessee the Tennessee we want (it) to be. To do that, we have to have the means to communicate. We have to have people focused on rural economic growth.”

One major change from Haslam’s original proposal was how the law defined areas eligible for support. The original bill would have targeted areas that did not have access to 25 Mbps service. The final legislation targeted areas lacking 10 Mbps service.

“The reason this was hung up for so long was the telecommunications companies were saying we can’t economically serve that area of the state,” Gov. Haslam said. “On the other hand, they were saying we don’t want to compete with the government if you’re going to do it. So we tried to find middle ground, and we think this does that.”

Tennessee Broadband Accessibility Grant

In the wake of the Tennessee Broadband Accessibility Act, the Department of Economic and Community Development created the Tennessee Broadband Accessibility Grant program, designed to offset the capital expenses in the deployment of broadband in unserved areas. The goal of the program is to facilitate broadband access to all Tennesseans while promoting practices that increase deployment and encourage adoption. Funds will be targeted to areas that are unlikely to receive broadband service without grant funding.  

Program guidelines stipulate that the maximum grant request is $2 million and grants will cover up to 50% of eligible project expenses. Costs associated with the installation and/or acquisition of middle-mile and last-mile broadband infrastructure that support broadband service at the locations and speeds are eligible for grant support. So project planning, construction permits, construction of facilities, equipment, installation, and testing of service are all eligible for support.

Between 2018 and 2022, the Department of Economic and Community Development awarded four rounds of awards. In January 2018,  52 digital literacy and broadband adoption grants were awarded for:

• Training classes to improve digital literacy including basic computer skills, how to apply for jobs, small business applications, and online learning;
• Devices and hardware to increase capacity at local libraries as key access points for community members; and 
• STEM programing for youth that supports broadband adoption by teaching 21st century skills and exposing participants to science and technology.  

Tennessee's New Broadband Programs

Tennessee elected Bill Lee (R-TN) to be its 50th governor in 2018. His goals included greater prosperity, freedom, and opportunity for Tennesseans. Increasing broadband accessibility remained a priority in the state.

In April 2020, Gov. Lee created the Stimulus Financial Accountability Group to ensure proper fiscal management of stimulus funds received by the state through the Coronavirus Relief Fund created by the CARES Act and the subsequent American Rescue Plan Act. 

In December 2021, Gov. Lee highlighted his accomplishments including allocating $500 million in federal funds to provide high-speed broadband to every Tennessean. 

In 2022, Tennessee's Department of Economic and Community Development estimated nearly 450,000 people in the state lacked access to 100/20 broadband service. The governor and the department announced an investment of $446.7 million in last mile broadband infrastructure projects through the Tennessee Emergency Broadband Fund – American Rescue Plan. The 75 projects cover nearly 150,000 unserved homes and businesses in 58 counties. Grantees will provide approximately $331 million in matching funds to complete these projects for a combined total investment of $778 million in new broadband infrastructure across the state. The projects must be completed within three years. 

On February 21, 2023, the U.S. Department of the Treasury approved Tennessee's plan to use $185 million in Capital Projects Fund support for broadband infrastructure. Tennessee will implement two broadband infrastructure programs that aim to provide reliable internet access in areas of the state lacking adequate service: 

1. Tennessee’s Last Mile Connection program is a competitive grant program designed to provide service to remote areas of the state where broadband infrastructure projects would not be feasible without assistance.
2. Tennessee’s Middle Mile Buildout Program is a competitive grant program designed to deploy middle-mile infrastructure in rural areas of the state to improve and expand last-mile connections.

Each of the internet service providers funded by these programs will participate in the Federal Communications Commission’s Affordable Connectivity Program and provide internet service with speeds of 100/100 Mbps symmetrical to households and businesses upon project completion.

Tennessee estimates that the Capital Projects Fund support will help connect approximately 500,000 locations—about 11% of the locations in the state lacking broadband service. 

The $185 million is 86% of Tennessee's Capital Projects Fund allocation from the American Rescue Plan Act. Tennessee submitted plans for the remainder of its Capital Project Funds and these applications are currently under review by Treasury. 

Support from the Infrastructure Investment and Jobs Act

In December 2022, the U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA) awarded Tennessee support to plan for the deployment and adoption of affordable, equitable, and reliable high-speed internet service throughout the state. Through the Infrastructure Investment and Jobs Act, the state received over $4.9 million for:

• Development of a comprehensive Five-Year Action Plan identifying Tennessee's broadband access, affordability, equity, and adoption needs; 
• Research and data collection, including initial identification of unserved locations and underserved locations; 
• Publications, outreach, and communications support;  
• Providing technical assistance to potential subgrantees, including through workshops and events.

As part of the Infrastructure Investment and Jobs Act's digital equity funding, Tennessee received $1.083 million for:

• Closing the digital equity gap and the development of a Statewide Digital Equity Plan; 
• Digital literacy, equity, and adoption consulting; 
• Community and stakeholder engagement, data collection and analysis, and report development and distribution. 

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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Broadband Delivers Opportunities and Strengthens Communities