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Repeater towers, like this one in West Virginia, help to extend broadband service to rural residents.

Treasury Releases Guidance on State Broadband Spending

June 17, 2021 | State Legislatures News | Print

States are investing in broadband at an unprecedented rate, and many see the need for further efforts to increase deployment and adoption. Following its release of the interim final rule governing the Coronavirus State and Local Fiscal Recovery Fund, the Department of the Treasury provided FAQ to guide states on spending for broadband.

The update clarifies that states and localities may invest in areas where not all households or businesses are unserved or underserved as long as an objective of the project is to provide service to unserved or underserved households or businesses. It also clarifies that the use of “reliably” in the broadband provision of the interim final rule provides states and localities with significant discretion to assess the experience of users on the ground. States may also use the funds for “middle-mile” projects but encourages partnership with “last-mile” networks to encourage adoption.

The public may submit comments for the record during the 60-day comment period on the interim final rule, which will be considered as part of the process for revising the rule.

FAQ on the Broadband Provision of the Interim Final Rule

For broadband infrastructure investments, what does the requirement that infrastructure “be designed to” provide service to unserved or underserved households and businesses mean?

Designing infrastructure investments to provide service to unserved or underserved households or businesses means prioritizing deployment of infrastructure that will bring service to households or businesses that are not currently serviced by a wireline connection that reliably delivers at least 25 Mbps download speed and 3 Mbps of upload speed. To meet this requirement, states and localities should use funds to deploy broadband infrastructure projects whose objective is to provide service to unserved or underserved households or businesses. These households or businesses do not need to be the only ones in the service area funded by the project.

For broadband infrastructure to provide service to “unserved or underserved households or businesses,” must every house or business in the service area be unserved or underserved?

No. It suffices that an objective of the project is to provide service to unserved or underserved households or businesses. Doing so may involve a holistic approach that provides service to a wider area in order, for example, to make the ongoing service of unserved or underserved households or businesses within the service area economical. Unserved or underserved households or businesses need not be the only households or businesses in the service area receiving funds.

For broadband infrastructure investments, what does the requirement to “reliably” meet or exceed a broadband speed threshold mean?

In the interim final rule, the term “reliably” is used in two places: to identify areas that are eligible to be the subject of broadband infrastructure investments, and to identify expectations for acceptable service levels for broadband investments funded by the Coronavirus State and Local Fiscal Recovery Funds. In particular:

  • The rule defines “unserved or underserved households or businesses” to mean one or more households or businesses that are not currently served by a wireline connection that reliably delivers at least 25 Mbps download speeds and 3 Mbps of upload speeds.
  • The rule provides that a recipient may use Coronavirus State and Local Fiscal Recovery Funds to make investments in broadband infrastructure that are designed to provide service to unserved or underserved households or businesses and that are designed to, upon completion: (i) reliably meet or exceed symmetrical 100 Mbps download speed and upload speeds; or (ii), in limited cases, reliably meet or exceed 100 Mbps download speed and between 20 Mbps and 100 Mbps upload speed and be scalable to a minimum of 100 Mbps download and upload speeds.

The use of “reliably” in the gives recipients significant discretion to assess whether the households and businesses in the area to be served by a project have access to wireline broadband service that can actually and consistently meet the specified thresholds of at least 25Mbps/3Mbps—that is, to consider the actual experience of current wireline broadband customers who subscribe to services at or above the 25 Mbps/3 Mbps threshold. Whether there is a provider serving the area that advertises or otherwise claims to offer speeds that meet the 25 Mbps/3 Mbps speed thresholds is not dispositive.

When making these assessments, recipients may choose to consider any available data, including but not limited to documentation of existing service performance, federal and/or state-collected broadband data, user speed test results, interviews with residents and business owners, and any other information they deem relevant. In evaluating such data, recipients may take into account a variety of factors, including whether users actually receive service at or above the speed thresholds at all hours of the day; whether factors other than speed such as latency or jitter, or deterioration of the existing connections, make the user experience unreliable; and whether the existing service is being delivered by legacy technologies, such as copper telephone lines (typically using Digital Subscriber Line technology) or early versions of cable system technology (DOCSIS 2.0 or earlier).

The interim final rule also gives recipients significant discretion as to how they will assess whether the project itself has been designed to provide households and businesses with broadband services that meet, or exceed, the speed thresholds provided in the rule.

May recipients use payments from the funds for “middle-mile” broadband projects?

Yes. Under the rule, recipients may use payments from the funds for middle-mile projects, but Treasury encourages recipients to focus on projects that will achieve last-mile connections—whether by focusing on funding last-mile projects or by ensuring that funded middle-mile projects have potential or partnered last-mile networks that could or would leverage the middle-mile network.

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