The fiber broadband industry is experiencing a historic moment. According to Joseph Wender, Director of Capital Projects Fund at the US Department of the Treasury, never before (and likely never again) have multiple government agencies provided tens of billions of dollars in funding to provide affordable, reliable, high-speed internet for all Americans and close the digital divide once and for all. The Capital Project Fund (CPF) was created before BEAD; it was one of the few COVID Relief Bills that Congress passed as part of the American Rescue Plan during the height of the pandemic and the reason why Congress specifically put $10 billion in the rescue plan. “It was a down payment on making high-speed internet affordable and reliable for all Americans,” Wender noted. The $10 billion CPF program has been critical to keeping broadband deployments progressing while larger programs, like BEAD, will take longer to disperse. Wender said that his agency wants to make investments that don’t just last years, but last decades.

A look at each state’s response to the National Technology and Information Administration’s (NTIA) Broadband Equity Access and Deployment (BEAD) Program Notice of Funding Opportunity’s (NOFO) Requirement 20 on Middle-Class Affordability and Requirement 16 for a Low-Cost Broadband Service Option.  This list also provides background information on the degree of participation in BEAD by municipal, tribal, and other government-owned networks (GONs) in each state. Thirteen states have affordability strategies that meet the NOFO requirements in a manner that should enhance private-sector participation and encourage the most rapid rollout of connectivity to unserved areas.  A significant element of most of their proposals is to not require specific monthly rates for each of the speed tiers. Instead, the states propose to determine eligibility either by comparing providers’ applications to the “reasonable comparability benchmark” defined in the Federal Communications Commission's (FCC) Urban Rate Survey, or by requiring providers to charge the same rates in areas of their state that qualify to receive BEAD subsidies as they charge in unsubsidized areas. There are eight states—Kentucky, Louisiana, Minnesota, New Jersey, New Mexico, North Carolina, Texas, and Virginia—that will determine providers’ affordability by reference to the benchmark rate for any given service area determined by the FCC’s Urban Rate Survey. There are five States—Alabama, Delaware, Maryland, New Hampshire, and Oregon—that require providers to charge no more in BEAD-subsidized locations than they do in unsubsidized areas of their state or any other state. (Alabama, however, uses this geographic price-parity approach only for scoring Middle-Class Affordability, while requiring a specific rate for the Low-Cost Service Option.) There are 11 states—Connecticut, Florida, Georgia, Hawaii, Iowa, New York, Ohio, Rhode Island, South Carolina, South Dakota, and Vermont, along with American Samoa—that have adopted an affordability strategy that scores providers’ proposed pricing relative to other providers that apply for BEAD funding, rather than against any objective standard of affordability. The other 24 states* and four territories (including the District of Columbia) surveyed, all dictate specific prices providers must charge to score well in the competitive application process.

The Affordable Connectivity Program (ACP) provides eligible customers a discount of up to $30 per month for broadband services. The benefits of the ACP—especially compared to other programs—is that it is tech-neutral; it does not limit users to a specific means of connection and gives customers choices over what service they want. Absent congressional intervention, the program is due to run out of funding as early as April 2024. Federal Communications Commission Chairwoman (FCC) Jessica Rosenworcel has warned congressional leaders they will begin winding down the program and stopping new enrollment on February 7, 2024 if there is no additional funding. With the end date approaching and 23 million customers waiting with baited breath, the question remains what is the future of the ACP? The best chance of preserving the ACP as a permanent program is to roll it into a future Universal Service Fund (USF) Program. Unlike the ACP which depends on congressional appropriations, the USF Program is funded by a tax on interstate end-user revenues. Congress is in a perfect position to make reforms to the USF Program that reflects the modern connected landscape and maintains a light-touch program that gives customers flexibility to choose services that suit their needs, without additional burdens to providers.

In a time when broadband affordability still plays a major role in the digital divide, the Affordable Connectivity Program (ACP) meets an obvious need. Roughly two years into the program, around 23 million households are enrolled for discounted broadband and a one-time device subsidy. We should be able to consider this case closed: We now have a strong, effective mechanism for closing the affordability gap. Indeed, ACP enjoys bipartisan support, and its virtues are extolled by industry and consumer advocates alike. But as the program’s initial funding winds down, some congressional Republicans are demanding more data before taking any action—particularly data on how many enrollees are first-time subscribers—and in doing so obstructing legislative agreement on a source of continued funding. The crux of the skeptics’ position is that absent substantive evidence that the majority of ACP recipients are first-time subscribers, the program is somehow failing and ineffective. Of course, we should want more transparency and clearer information about ACP’s effects and enrollees. But the ACP wasn’t meant to help only first-time subscribers get online, and cannot be evaluated on this basis. If the ACP is allowed to end, it will ensure any future broadband affordability initiative fights a potentially losing battle to regain trust. Holdouts should recognize that this is all much too steep a price to pay.

Reps John Curtis (R-UT) and Annie Kuster (D-NH) introduced the Rural Broadband Protection Act to combat waste fraud and abuse in federal broadband programs. The Senate version of this bill was introduced in the Senate by Sens Shelley Capito (R-WV) and Amy Klobuchar (D-MN) in 2023. The Federal Communications Commission's high-cost programs funds telecommunications carriers who provide service in rural areas where the market alone cannot support the substantial cost of deploying network infrastructure and providing connectivity. This modernized program is called the Connect America Fund, and it consists of a series of new funds that rely on incentive-based models and competitive bidding to award carriers a set amount of support to build out broadband to a defined number of locations in unserved and underserved areas. The bill would provide essential safeguards to the FCC’s high-cost programs by ensuring that funding goes to companies with both a proven track record of success and have demonstrated sound judgment in deploying in hard-to-serve areas.

Ubiquity, which builds and operates open-access networks, recently obtained a green loan to help finance fiber network construction. It’s an interesting concept that other providers might want to consider. Green loans (and bonds) are a special form of funding that is aimed at financing environmentally friendly projects. Ubiquity was able to justify that building a fiber network is ‘green’ under the principles created by the Loan Market Association (LMA) and under Generate Capital’s Green Financing Framework. It seems like the primary benefit of a green loan for a fiber network is the ability to tout the social responsibility of the provider building and operating the network. Ubiquity can advertise in its markets that the network was funded by a lender that certified the project as green. That seems like something that would play well with the public.

Some of the top proponents of open RAN in the US warned lawmakers that the technology remains in danger of sliding into irrelevance if trends toward fragmentation and proprietary solutions continue. John Baker, senior vice president of Ecosystem Business Development at Mavenir warned that there can be different flavors of open RAN. "Just as open RAN has been embraced by nearly all within the industry, we risk repeating history by having suppliers again lock up networks with proprietary solutions that are only partially based on O-RAN Alliance specifications." Similarly, Dish Network's Jeff Blum warned of possible open RAN fragmentation. Mavenir, Dish and others at the hearing urged lawmakers to support a handful of strategic initiatives they said could propel open RAN forward.