Keller & Heckman

Broadband grants awarded under programs established by the American Rescue Plan Act (ARPA) and the Infrastructure Investment and Jobs Act (IIJA) could be subject to federal corporate income tax, effectively requiring corporate recipients of grant funds to return 21 percent of it to the federal government. While the IRS has in the past declared a “safe harbor” from taxation for certain broadband grants (specifically, BTOP and BIP grants, in 2010), doing so now could be more challenging due to statutory changes adopted as part of the 2017 Tax Cuts and Jobs Act.

States, local governments, service providers and potential partners should be aware of the Coronavirus Capital Projects Fund (CPF), another significant broadband infrastructure funding opportunity that seems to have been overshadowed by recent programs like those included in the Infrastructure Investment and Jobs Act. While States await rules and eligibility determinations for the Infrastructure Act funds, CPF funding may be available in the meantime. Moreover, CPF funding might be suitable for projects that may not otherwise be eligible for funding under the Infrastructure Act.

This is our 6th entry in Keller & Heckman's blog series on the major provisions of the Infrastructure Investment and Jobs Act. Previous blog entries examined the $42.45 billion Broadband Equity Access and Deployment (BEAD) Program, the $1 billion Middle Mile grant program, the Act’s support for broadband partnerships, the Affordable Connectivity Program, and the Act’s key cybersecurity provisions. This post reviews the Act’s provisions aimed at promoting digital equity by increasing broadband adoption and accessibility.

The Infrastructure Investment and Jobs Act allocates $65 billion to support various broadband initiatives. Keller & Heckman previously examined the $42.45 billion Broadband Equity, Access and Deployment (“BEAD”) Program and the $1 Billion Middle Mile Grant Program, each of which focuses on deploying broadband networks to unserved and underserved areas.

This Beyond Telecom Law Blog entry highlights the current rural broadband funding opportunity presented by the $1.15 billion “ReConnect” program administered by the US Department of Agriculture’s (USDA) Rural Utilities Service (RUS). Under the Funding Opportunity Announcement for its third round of Reconnect funding (ReConnect III), the RUS will be awarding loans and grants to construct, improve, or acquire facilities needed to provide broadband service to rural areas.