Montana's Five-Year Plan for BEAD Funding

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Round-Up for the Week of July 24-28, 2023

All 50 states are currently working on Five-Year Action Plans for the Broadband Equity, Access, and Deployment (BEAD) Program. As they release draft plans, the Benton Institute for Broadband & Society is sharing summaries focused on how states define their broadband goals and priorities.

While we recently broke down Montana's Draft Digital Opportunity Plan and the state's vision of digital equity, the Montana Broadband Office (MBO) has also made public its draft Broadband, Equity, Access and Deployment (BEAD) Program Five-Year Action Plan. Ultimately, the MBO’s vision is to narrow the digital divide in support of Montana’s economic, workforce, health, and educational goals by ensuring reliable, affordable internet access for everyone in the state.

Infrastructure Deployment in Montana

According to Montana's draft plan, 82 percent of Montanans are currently served by broadband networks with speeds of at least 100/20 Mbps, while 5 percent are underserved and 13 percent are unserved. Montana’s unserved and underserved locations are spread out across several counties, but a higher percentage of rural locations are unserved and underserved. Rural Montana is 16 percent unserved and 6 percent underserved while metropolitan Montana is 9 percent unserved and 3 percent underserved. Though rural areas have the highest number of unserved and underserved locations, there are also large concentrations of unserved and underserved locations in a few of Montana’s largest counties that have a high percentage of served locations.

MBO’s vision is to narrow the digital divide in support of Montana’s economic, workforce, health, and educational goals by ensuring reliable, affordable internet access for all Montanans. Montana will increase broadband access and adoption by pairing broadband deployment with digital opportunity efforts. Given the potential high costs associated with deploying fiber infrastructure to remote areas of the state, MBO will, by necessity, explore all technology options to achieve the state's internet connectivity goals. Such technologies may include drawing on a flexible combination of fiber-optic cable, fixed wireless, and satellite deployment to reach homes, businesses, and community anchor institutions (CAIs) such as schools and hospitals. This broadband deployment plan will give all Montanans the internet access they need for full participation in our society, democracy and economy.

Montana’s core aims for broadband deployment are twofold:

1. Build out broadband to all unserved locations (recognizing the unique challenges of doing so in a topographically varied state with a significant rural population) and reach as many underserved locations as possible. Montana will strive to provide 100/20 Megabits per second (Mbps) service to as many locations as possible, with the ultimate goal of scaling to 100/100 Mbps high-speed internet service.
2. Prioritize digital opportunity in its approach, factoring in affordability, access to devices, and the digital skills required to help close the internet adoption gap across the various covered populations. 

MBO will also be building out service to unserved and underserved community anchor institutions (CAIs), including schools, libraries, and medical centers, among others. Montana may also consider a more inclusive definition of CAIs, as there are a number of other institutions in rural Montana that may serve as one of the only anchors in the community (e.g., ranger station, local bar and grill). Given the importance of CAIs in providing needed services for Montana residents, a focus on delivering high-speed internet to CAIs will have an outsized impact on achieving the state’s broader goals. Currently, many CAIs across the state have gaps in access to high-speed internet; 80 percent of CAIs are currently served, similar to the overall percentage of served locations in Montana, while the percentage of unserved locations (seven percent) is lower than the statewide rate. Public safety and entity boundary locations have the highest rate of unserved locations at nine percent and ten percent, respectively.

Barriers to Deployment

Population Density

Montana is the US’s fourth largest state by land area but 44th by population, which yields a population density of only 7.4 people per square mile. This poses additional challenges to building out broadband access for remote locations in a cost-effective fashion. Where locations cannot be served in a cost-effective fashion with fiber optic cable, MBO has proposed other alternatives. MBO considers that the impetus for federal grant funding is precisely to make broadband deployment possible in areas where the cost of construction is too high for ISPs without the help of grants. Given the importance of broadband deployment in the economic development of rural areas, Montana continues to prioritize broadband deployment even in sparsely populated parts of the state.

Topography

Montana’s geography encompasses mountains, canyons, forests, grassy plains, and badlands—all of which pose unique challenges for broadband deployment. Montana’s two distinct geographic regions, the Great Plains and the Rocky Mountains, pose distinct challenges, potentially leading to a higher cost to deploy broadband. The Great Plains, covering the eastern three-fifths of the state, are glaciated, frequently freezing in the winter, and sparsely populated. The Rockies, covering the western two-fifths of the state, feature mountains where it will be challenging and expensive, if not impossible, to lay fiber-optic cable.

Cost of Deployment

The State of Montana conducted a preliminary analysis to determine the estimated total BEAD subsidies that would be required to deploy fiber to all unserved and underserved locations in Montana. Given the large number of unserved and underserved locations spread across the state, Montana may not have sufficient funding to connect all unserved and underserved locations with fiber. Initial analysis of the estimated cost to serve at a location level shows that it will cost $690-$830 million in total government subsidies to deploy fiber to all unserved and underserved locations in Montana. The average cost to serve is $7.8-9.4 thousand per unserved and underserved location. A 100 percent fiber buildout to all unserved and underserved locations may be significantly more expensive than the estimated broadband allocations. Montana will establish an Extremely High-Cost per Location Threshold to determine the point at which other technologies will be explored. In light of the state’s topography, satellite, in particular, may be the only viable option in the most remote locations.

This analysis will be continuously refined as Montana develops its Action Plan, Initial Proposal, and Final Proposal. This iterative process will help to ensure the most accurate and comprehensive information that will inform Montana’s BEAD execution.

Workforce Development

Over the next four years, analysis projects that over 50 percent of broadband-related roles will see shortages, especially outdoor, labor-intense roles. Manual roles are where the largest gaps are expected, including laborers, locators, foremen, restoration crews, and project managers. MBO will partner closely with the Department of Labor and Industry, as well as the Office for the Commissioner of Higher Education and the Office of Public Instruction to develop a workforce development strategy that will ensure adequate labor for the implementation of this program.

Supply Chain

The Fiber Broadband Association provides current lead times for components needed for fiber deployment. As of September 2022, the Fiber Broadband Association reported lead times of 52- 60 weeks for fiber optic cable, 10-20 weeks for fiber cabinets and splitters, 20-35 weeks for fiber multiport terminals, 15-20 weeks for conduit, and 22-26 weeks for hand holes.

The Fiber Broadband Association has recommended several strategies available to providers for supply chain management. These include establishing solid personal relationships with suppliers, designing buildout flexibly to allow for a degree of product substitution, diversifying suppliers, and building more robust forecasting processes. The State of Montana will work closely with ISPs before and during the deployment process to provide the technical assistance required to help implement these mitigating actions. Montana has engaged engineering and technical experts who will be able to help ISPs forecast their material needs and think through alternative options in the event of shortages. The State of Montana will also work with ISPs to ensure they are reaching out to suppliers early in the process.

Industry Participation

Montana’s broadband strategy requires participation from ISPs and other applicant classes such as local governments and public-private partnerships. Stakeholder engagement will be necessary to ensure applicants’ buy-in and participation. Montana has conducted a robust stakeholder engagement process that has involved extensive coordination and input from ISPs and the public, including in public forums, focus group discussions and one on one meetings.

MBO has conducted robust stakeholder engagement with ISPs and with the public during the planning phase. MBO will continue this engagement throughout the implementation of the entire Five-Year Action Plan. The engagement will help to ensure a transparent and efficient grant process, as well as work to ensure goals are being met and any risks are addressed early in the process.

Regulatory Environment

Right-of-Way Legislation

According to SB392, passed in 2021, the Montana Department of Transportation assigns public rights of way, which grants use of longitudinal right-of-way along interstate highways to eligible projects. Broadband providers will be required to pay for the fair market value of the portion of the right-of-way they are using. The Montana Association of Counties establishes the guidelines for public rights of way for streets managed by Montana’s 56 counties.

Municipal Broadband Legislation

Montana only allows municipalities to offer broadband services if no private companies offer broadband within the municipality’s jurisdiction, or if the municipality can offer “advanced services” that are not available from incumbents. For municipalities that are currently offering broadband service, local authorities must alert their subscribers if a private company decides to enter the market. HB422, aiming to repeal this restriction, failed in 2021. The State of Montana currently allows non-profit organizations to serve as broadband providers. Moving forward, the state will ensure that no classes of applicants (e.g., local governments, public-private partnerships) are excluded from applying for funding, in line with BEAD requirements.

Montana's Implementation Plan

Montana’s Implementation Plan for broadband deployment is founded on two premises: first, that the BEAD Five-Year Action Plan is the first step on a journey to deliver broadband to all Montanans, and second, that the Plan is an instrument for gathering input from stakeholders as well as from the NTIA.

Broadband Availability

Connecting the Unserved

Montana’s priority in broadband deployment is to reach the state’s numerous unserved and underserved areas. The program’s main focus is on deploying broadband service to unserved locations (those without any broadband service at all or with broadband service offering speeds below 25 Mbps downstream/3 Mbps upstream).

Key activities include:

• Determine priority unserved locations.
• Select ISP sub-grantees to build necessary infrastructure.
• Deploy priority projects.
• Deploy remaining projects.
• Monitor the number of unserved households over time to track progress against goals.

Goals and measurements:

The main goal of this effort will be to decrease the percentage of unserved locations from the initial baseline measure of thirteen percent. The short-term goal would be to reduce it to ten percent, and the long-term goal is to reach 0 percent. To help track progress, ISP subgrantees will report back as they build the supporting broadband infrastructure.

Upgrading the Underserved

The state will deploy a mix of technologies, likely including fixed wireless and fiber, to make adequate broadband available to underserved Montanans. Cost analyses will be conducted and refined to determine the optimal mix of technology to Montana’s underserved population. Preliminary analysis estimates that it would cost approximately $830 million to provide fiber internet to all underserved and unserved locations in Montana. On June 26, 2023, The Department of Commerce’s National Telecommunications and Information Administration (NTIA) announced that the state of Montana will be allocated approximately $629 million in Broadband Equity, Access, and Deployment (BEAD) Program funding.

Key activities include:

• Determine priority underserved locations.
• Select ISP sub-grantees to build necessary infrastructure.
• Deploy priority projects.
• Deploy remaining projects.
• Monitor the number of underserved households over time to track progress against goals.

Goals and measurements

The main goal of this effort will be to decrease the percentage of underserved locations from the initial baseline measure of 5 percent. The short-term goal would be to reduce it to 4 percent, and the long-term goal is to reach 0 percent.

Invest in Community Anchor Institutions

Montana may prioritize bringing infrastructure to underserved and unserved community anchor institutions (CAIs) or increasing existing service to higher speeds that support broader, community-supporting activities. However, given the federal requirement of first reaching all unserved and underserved locations, upgrading service to CAIs will be dependent on the availability of funding.

Key activities include:

• Determine priority CAIs.
• Select ISP sub-grantees to build necessary infrastructure.
• Deploy priority projects.
• Deploy remaining projects.
• Monitor the number of CAIs over time to track progress against goals.

Goals and measurements

The state may establish a goal to serve every CAI, and to measure success, ISP subgrantees can report back on their progress in building the supporting broadband infrastructure. Montana may also set goals to make higher speeds available to CAIs, which may be tracked over time. This could be done by tracking the percentage of un- and underserved CAIs, with a current baseline of 20 percent, a short-term goal of reducing to 16 percent, and a long-term goal of reaching 0 percent.

Service Affordability

After broadband availability, affordability is the second greatest barrier to internet access faced by Montanans, as 16.8 percent of Montanans without high-speed internet cited lack of affordability as the primary reason for their inadequate internet access. Low income is strongly correlated to the affordability barrier: 35 percent of Montana households with an annual income under $20,000 do not have broadband at home, versus 17 percent for households with incomes $20,000-75,000, and five percent of those earning above $75,000. To improve affordability in the state, Montana can consider two main strategies—increasing Affordable Connectivity Program (ACP) uptake and partnering with ISPs to provide additional low-cost service plans.

Increasing ACP Uptake

The state of Montana can help its residents take advantage of the ACP by increasing awareness and assisting eligible households in the enrollment process.

Key activities include:

• Select ACP-eligible target populations.
• Establish partnerships with non-governmental organizations, state agencies, CAIs, and ISPs.
• Provide individuals with relevant information about the ACP and support them through the enrollment process.
• Track the number of eligible Montanans who sign up for the ACP over time.

Goals and measurements

To measure the effectiveness of this effort, Montana can measure the percentage uptake of eligible households, which is tracked and made publicly available weekly by the Universal Service Administrative Company. This metric has a current baseline of 21 percent, a short-term goal of increasing it to 26 percent, and a long-term goal of reaching 47 percent, the current highest state uptake rate.

Offer Low-Cost Plans

BEAD-supported ISP sub-grantees will be required to offer low-cost plans, which will increase broadband affordability in the state.

Key activities include:

• Establish a definition of low-cost plans.
• Select subgrantees who meet or exceed the state’s defined threshold for low-cost plans.
• Track the number of low-cost plans made available to Montanans.

Goals and measurements:

The state may track the number of low-cost plans available to its residents. There is currently no baseline measurement, as BEAD has not yet started, but the short-term and long-term goals are the same as the ACP uptake targets.

Montana Wants to Hear From You

Public comments on Montana's draft BEAD Five-Year Action Plan can be submitted to the Montana Broadband Office at connectmt@mt.gov until July 30, 2023.

Quick Bits

• FCC Chairwoman Rosenworcel Proposes Goal of 100% Access to Affordable Broadband
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• Biden-Harris Administration Announces Nearly $4 Million in Internet for All Grants to Tribal Lands
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Weekend Reads (resist tl;dr)

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ICYMI from Benton

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• Application window for Benton's 2023-24 Opportunity Fund Fellowships is now open
• House Subcommittee to Passes Bills to Reauthorize NTIA 
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Upcoming Events

August 1––Connecting the Heart of Humanity Through Digital Inclusion: CA Case Study (mohuman)

August 3—August 2023 Open Federal Communications Commission Meeting

August 10––Broadband Technologies Overview (Illinois Broadband Lab)

August 17––Technological Advisory Council (FCC)

August 20––Fiber Connect 2023 (Fiber Broadband Association)

Sept 27-28––Oregon Infrastructure Summit (Business Oregon)

Oct 2-6––Digital Inclusion Week 2023 (NDIA)

Oct 24––41st Annual Everett C. Parker Lecture & Awards Breakfast (United Church of Christ Media Justice Ministry)

Nov 15-17––U.S. Broadband Summit (Fierce)

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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