With Billions on The Table, The Commonwealth has no Plan for Broadband

IMPORTANT BROADBAND FUNDING ADVISORY

TO: Office of The Governor and Lt. Governor, Massachusetts Senate Members,Massachusetts House Members, Executive Office of Housing and Economic Development, Massachusetts Broadband Institute, Department of Telecommunications and Cable, Cape & Island’s Delegation, Cape Assembly of Delegates, Barnstable County Commissioners, Cape and Island Town Administrators and Select Board Members

FR: Steven Johnston, CEO, OpenCape Corporation

DT: January 19, 2022

On Friday, January 9 the U.S. Department of Treasury released the Final Rule governing implementation of the American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Funds.

When Congress developed and passed the American Rescue Plan Act, it tasked the Treasury Department with writing the rules for key programs, including the State & Local Fiscal Recovery Funds (SLFRF). That program is distributing $350 billion to local and state governments, which can use it for a variety of purposes that include broadband infrastructure and digital inclusion efforts. Key changes included in the final rule make broadband investment much more responsive to the needs of local towns and communities based on their experience, it has eliminated much of the previous language regarding meeting the 25 mbps download/3 mbps upload minimum and instead focuses on future based objectives like reliability, access, affordability and 100/100 speeds.

ARPA funding provided approximately $8.7 billion to Massachusetts. The Commonwealth received $5.3 billion from the Coronavirus State Fiscal Recovery Fund (CSFRF) and $3.4 billion from the Coronavirus Local Fiscal Recovery Fund (CLFRF) as well as additional funding from various other programs that specifically looked to fund broadband expansion. To date, the Commonwealth has only allocated $50 Million to broadband investment. Whereas states like Virginia have allocated $2 Billion, and New York and North Carolina have allocated $1 Billion for broadband infrastructure.

Treasury’s FINAL GUIDANCE provides local governments wide latitude to use these funds for a variety of needed broadband infrastructure investments. I hope you will find the following overview useful in how the Commonwealth allocates remaining funds to best adapt these rule changes.

Key passages and takeaways worth reviewing by State, City/Town and Community Leadership based on FINAL RULE changes:

• Recipients may now fund high-speed broadband infrastructure in areas of need that the recipient identifies, such as areas without access to adequate speeds, affordable options, or where connections are inconsistent or unreliable; completed projects must participate in a low-income subsidy program.

• In general, the SLFRF has simplified the rules to give more flexibility to state and local governments (across all of the eligible uses, not just broadband infrastructure). The original rule focused mostly on areas lacking reliable 25/3 Mbps service - with a big focus on the word “reliable.” But there is no mention of 25/3 in the Final Rule. Local governments do still have to make a determination that they are building the network to solve one of the problems that SLFRF uses as a trigger to allow broadband infrastructure investments, but they do not have to get approval from Treasury or any other entity.

• Key triggers for local determination include; lack of access to a reliable 100/100 connection or lack of access to affordable broadband service.* Any network built with SLFRF must be designed to deliver 100 Mbps download and upload. *NOTE: (Both the aforementioned triggers are prevalent on The Cape, Islands and Southeastern MA. Comcast does not offer symmetrical connections to residential customers. OpenCape’s minimum residential service, $55 per month, delivers 250 mbps down/125 mbps up and easily qualifies.

• Consistent with further guidance issued by Treasury, in determining areas for investment, recipients may choose to consider any available data, including but not limited to documentation of existing broadband internet service performance, federal and/or state collected broadband data, user speed test results, interviews with community members and business owners, reports from community organizations, and any other information they deem relevant. In short, local communities now have significantly more control over how to respond to the services they are experiencing on the ground from provider/s.

• · And if that was not sufficiently clear, Treasury goes above and beyond to be very clear that cities should not be bullied by the occasional intimidating ISP or some other opponent of more broadband investment (page 303 still):

• Lastly, Treasury continues to encourage recipients to prioritize support for broadband networks owned, operated by, or affiliated with local governments, nonprofits, and cooperatives. OpenCape is a fully accredited 501c3 Not-For-Profit Organization

So how should this final ruling by Treasury impact thinking about broadband investment in the Commonwealth? The Commonwealth has long taken the stance of the incumbent providers that they are doing a good job servicing and meeting demand. As evidenced by the feedback we have enclosed and received from residents, this is simply not the case. This final ruling virtually eliminates their Commonwealth’s objection and use of the term “overbuilding”. This final ruling falls much more in line with our position that competition and offering residents and businesses a variety of options not only means better quality of service, but it will further encourage economic development and growth within the Commonwealth.

There is no one investment the Commonwealth could make that would have such far-reaching impact as robust, affordable broadband as it touches every level of communities’ demographics and directly impacts areas of key concern across the State including schools and STEAM, digital divide, remote working, telehealth, roadways and transportation, public safety, wastewater and environmental, energy services and much more.

We hope that the Administration, Senate, and House in cooperation with local towns and communities will revisit their lack of investment in broadband for the Commonwealth and make significant broadband funds directly available to the Cape, Island’s, and Southeastern MA.