By Johnny Kampis
A collaborative study between Cornell University and The Pew Charitable Trusts (a nonpartisan research group) examining broadband grants uncovered an interesting wrinkle in that researchers found no adverse relationship between laws limiting government-owned broadband networks (GONs) and local broadband grant funding. In fact, the study found that rural areas with restrictions tended to attract more grants than those with no restrictions.
The report, led by Cornell’s Natassia A. Bravo and Mildred E. Warner and released in November, examined broadband grants in 17 states from 2014 to 2020. Warner noted on Pew’s website that the researchers hoped to shed light on which strategies and policies have been used to expand broadband access in advance of the first rollout of the $42.5 billion in taxpayer dollars from the Broadband Equity, Access and Deployment (BEAD) program this year.
In a Q&A about the study, Bravo pointed out that one of the surprises in the research was related to municipal broadband restrictions.
“We had anticipated that restrictive local laws would hinder broadband deployment and funding, because they limit which providers can apply for grants,” she said. “But we were surprised to find no significant relationship between these restrictions and funding received by metro counties.”
Bravo indicated that the research hinted that GON-limiting laws likely create more public-private partnerships.
“Even more surprising was that the laws were positively associated with the number of grants received in rural areas,” she said. “This could be a case of smaller municipalities working with private ISPs to expand access and relying on state dollars to attract that private investment—something we shouldn’t overlook in otherwise noncompetitive rural markets.”
The study found that public-private partnerships accounted for 18 percent of grantees, noting that some states require such partnerships for certain grants, especially when laws require local governments to partner with private providers to build, operate and maintain networks rather than build their own. Virginia requires such public/private/partnerships with the local government applying for the grant and the private sector partner owning and operating the network. The Virginia Telecommunications Initiative matches up to 80 percent of project costs.
Only 4 percent of the grant funds in the study went to municipalities or municipal utilities.
The examination also found that many states attempted to avoid double-dipping, with some communities ineligible for state funding if they already used federal funding for broadband projects. For example, localities that utilized American Rescue Plan Act (ARPA) funds in North Carolina could not receive money from the state’s Growing Rural Economies with Access to Technology (GREAT) program.
Researchers noted that BEAD will prioritize fiber, and that critics have pointed out the lower rate of return on fiber networks due to their higher cost could slow down deployment. The study found that most state grants (57 percent) have gone toward fiber, with fixed wireless (13 percent) an alternative option for more rural areas.
“BEAD rules are not expected to preempt state authority over how broadband funds are allocated and spent, and our analysis provides encouraging results that states are already prioritizing fiber in their broadband programs,” the study states.
The Taxpayers Protection Alliance has noted that onerous regulations have harmed efforts to close the digital divide. Telecom industry leaders have expressed concerns that red tape will likely hinder the rollout of BEAD. In municipalities where government-owned networks are allowed, bureaucrats are incentivized to delay the efforts of private providers that would be their competition. The Pew findings could show that providers are more willing to enter a new market if they know the city will work with them rather than against them.
Johnny Kampis is director of telecom policy for the Taxpayers Protection Alliance
