Broadband is such a critical infrastructure for the long-term viability of communities, regardless of their size or location. But it isn’t cheap. Indeed, it’s quite expensive to build and operate. And the smaller the community, in terms of population and people per square mile, the more difficult it is to build a sustainable business case, absent some support.
Thankfully, there are available funding options that target rural broadband buildouts and ongoing operations. The U.S federal government offers a range of programs to support rural broadband. Many states do the same. The federal universal service fund (USF) program was established to bring comparable telecommunications services to rural America. Meaning rural residents should be able to get comparable service to what their urban counterparts do.
Connect America Fund
That successful program has evolved to become the Connect America Fund (CAF), which aims to do the same for broadband service. Eligible telecommunications carriers can tap the CAF program to help build and operate rural broadband networks. There are a few CAF programs. The high-cost program, which is primarily tapped by rural telcos allocated $4.7 billion for the construction of networks in 2018. That program continues today.
Additionally, the FCC recently concluded a Connect America Fund auction that awarded close to $1.5 billion to 103 broadband providers, who will connect over 700K rural locations to broadband. Winners of this funding included traditional rural telcos, electric utilities, WISPs, and even satellite broadband companies.
The FCC has already announced the next version of this auction-funding vehicle, the Rural Digital Opportunity Fund, which will award $20.4 billion in funding over a ten year period through a reverse auction. Rules for this auction are being formed now and it’s expected to take place during 2020-2021. Winning bidders will be required to offer broadband service of at least 25 Mbps downstream and 3 Mbps upstream.
Grant and Loan Programs
There are also a variety of broadband grant and loan programs, both at the federal and state level. At the federal level, the USDA’s Rural Development program offers a few programs. A long-standing loan program offers loan funding to providers for the construction of broadband networks, but USDA also offers grants and combination grant-loan programs.
The ReConnect Program has budgeted $635 million for grants and loans to support providers who aim to bring high-speed broadband to rural homes, businesses, farms, ranches and community facilities, such as first responders, health care sites and schools. The program has received 53 applications which represent markets in 33 states. This is the first round of the ReConnect Program and indications from Congress suggest there may be additional rounds of funding in the years to come.
USDA also operates the Community Connects Grant program, which helps fund rural broadband projects. In addition to service providers, state and local governments are eligible to apply for these grants.
There are a range of programs across both federal and state agencies that offer different forms of broadband funding. A great resource for this is a searchable database maintained by NTIA. Happy searching and good luck!
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