How States Support Broadband Projects

As high-speed, reliable internet access becomes increasingly important in modern life, state leaders are seeking ways to fund projects to expand this vital service. Although the mechanisms that states use are fairly consistent—grants and loans, among others—they have different approaches for distributing funds and encouraging investment. This brief explores the ways in which states support broadband deployment projects and what they aim to accomplish.

States often support broadband deployment through grants and loans to internet service providers, nonprofit utility cooperatives, and local governments. The money for these grants and loans comes from sources that fall into three categories: special and general funds, state universal service funds, and other revenue streams. Pew has identified three trends among state goals for broadband expansion projects: 1) Funding is directed to unserved and underserved areas; 2) “Last mile” projects get the most funding; 3) Projects are required to obtain matching funding. Just as there is no one-size-fits-all solution for expanding broadband access, funding and financing broadband deployment is a state-specific enterprise. Many states take multiple approaches to funding their broadband projects, using a combination of grants, loans, tax incentives, bonds, and support from other state agencies. Given such diverse strategies, states should look to one another to find creative ways to expand broadband to those who need it.