A New Source of Financing

Section 80401 of the Infrastructure Investment and Jobs Act new law allows for the use of private activity bond financing for qualified broadband projects. It’s an interesting new form of financing that has never been easily available to commercial internet service providers before. This bond funding can only be used for projects that fit the criteria for broadband projects that are covered by the other provisions of the Infrastructure Act. Specifically, the bonds can only be used to finance a project that "is designed to provide broadband service solely to 1 or more census block groups in which more than 50 percent of residential households do not have access to fixed, terrestrial broadband service which delivers at least 25 Mbps downstream and at least 3 Mbps upstream," and "results in internet access to residential locations, commercial locations, or a combination of residential ad commercial locations at speeds not less than 100 Mbps for download and 20 Mbps for uploads, but only if at least 90 percent of the locations provided such access under the project are locations where, before the project, a broadband provider did not provide service, or did not provide service meeting the minimum speed requirement." This means the projects can only be used for areas that have at least 50 percent coverage of homes with current broadband of 25/3 or less. That’s likely to mean that this bond funding is going to have a relatively short shelf life – once Broadband Equity, Access and Deployment (BEAD) program grants are done, there may not be a whole lot of the US left that will meet this test.

[Doug Dawson is President of CCG Consulting.]