Infrastructure Investment and Jobs Act

John Greene, former CEO of New Lisbon Holdings, said, “Who would have ever thought we’d see private equity filter into rural areas and small companies?” Rural broadband is very expensive to build. That’s why the Broadband Equity, Access and Deployment (BEAD) program is designed to subsidize the gap where it otherwise doesn’t make financial sense for private companies to build. Panelists at the Connect(X) show noted that one of the main competitors in some rural areas is the local electric co-op. Greene said rural electric co-ops “are going to be a force to be reckoned with.

The Affordable Connectivity Program (ACP) that provides a discount for millions of homes will disappear unless Congress takes action to continue it. Most big internet service providers (ISPs) have announced how they will handle broadband for low-income homes after the end of ACP. 

Rep Brandon Williams (R-NY) has introduced a bill to fund the Affordable Connectivity Program (ACP) through Fiscal Year 2024. H.R. 8466, the Affordable Connectivity Program Improvement and Extension Act of 2024, will replenish the Affordable Connectivity Fund with $6 billion by amending Section 521(4)(a) of the Consolidated Appropriations Act, 2024.

An appealing way to finance fiber builds is through asset-backed securities (ABS). However, this is only available to established companies that actually have fiber assets, which they can leverage to secure a lower cost of debt. It’s not something available to new entrants in the fiber space. Since the introduction of the Broadband Equity Access and Deployment (BEAD) program, many private equity (PE) investors have entered the fiber market.

The pace of US broadband subscriber growth slowed considerably in the first quarter of 2024 as fiber, fixed wireless access (FWA) and cable broadband service providers collectively turned in results that were worse than what they posted in the year-ago period. Total industry net additions, including or excluding FWA and geosynchronous (GEO) satellite broadband providers, decelerated noticeably in Q1 2024.

Lawmakers are butting heads over a provision within the Broadband Equity Access and Deployment (BEAD) program that allows states to require low-cost service options from participating service providers. Democrats are calling it an affordability policy. Republicans say it's heavy-handed government regulation. As part of the BEAD planning process, the National Telecommunications and Information Administration (NTIA) is considering each state’s definition of a low-cost option, provided that it meets the standards laid out in the program’s statute.

Evan Feinman, director for the Broadband Equity, Access and Deployment (BEAD) program with the National Telecommunications and Information Administration, provided an update on the program. All states have submitted their Volume 1 proposals to NTIA, and Feinman said that nearly all Volume 1 proposals are approved. A check of NTIA’s Progress Dashboard today shows that only Florida, Maryland and Minnesota have yet to have their Volume 1s approved.

I have been asked my opinion several times about Rural Digital Opportunity Fund (RDOF) amnesty—letting RDOF winners walk away from their obligations without big penalties. There is no easy answer to the question. It’s certainly a timely topic, since we are seeing internet service providers (ISPs) walk away from RDOF. There are several good arguments to be made that favor some kind of amnesty.

On May 16, 2024, Federal Communications Commission Chairwoman Jessica Rosenworcel appeared before the House of Representatives Financial Services and General Government Subcommittee to review the Federal Communications Commission’s Fiscal Year 2025 budget request. The Chairwoman highlighted some of the FCC's critical work, including the National Broadband Map and efforts to stop robocalls. She also emphasized the need for the FCC's spectrum auction authority to be reinstated, and spoke about the impending end of the Affordable Connectivity Program.

Digital equity cannot be fully realized without the participation of educational institutions, including K-12 public schools, community colleges, historically black and other minority serving colleges and universities, and extension programs. Many state digital equity plans embrace education and potential collaborations with educational institutions. All states acknowledge that digital equity is critical to education.