ACA Summit, Washington DC – States are poised to play a critical role in the broadband funding landscape, as they will soon receive allocations from the $42.5 billion Broadband Equity, Access and Deployment (BEAD) Program. But each state has a different approach to selecting broadband projects and administering funds.
Speaking at an ACA Summit panel earlier this week, state broadband directors from Georgia, Pennsylvania and Virginia delved into how they’re tackling broadband funding opportunities, namely for the $10 billion Capital Projects Fund (CPF).
To recap, Georgia received $260 million for its CPF allotment, while Pennsylvania and Virginia were allocated $279 million and $220 million, respectively.
As for BEAD funding, ACA Connects has projected Georgia will get around $1.5 billion, Virginia $1.4 billion and Pennsylvania roughly $1.3 billion.
Virginia, which was one of the first states to get CPF funding last June, seemed to be the “guinea pig” for the program, according to Tamarah Holmes, broadband director for the Virginia Department of Housing & Community Development.
“We already had locations in the queue, we were actually finalizing our challenge process when the General Assembly allocated our CPF funds,” she said. “So we quickly had to work with the applicants.”
Holmes’ office helped applicants wade through federal and state funding for the 2022 grant cycle. In addition to the $220 million CPF funding, Virginia amassed $449 million American Rescue Plan Act (ARPA) funding and $50 million in state funds.
“So what started out as a $50 million grant cycle for 2022 turned into a $722 million grant cycle really quickly,” Holmes said.
Another thing Virginia had to do during the CPF process was avoid locations in the Chesapeake Bay area. Otherwise, the state would have had to use the funds for environmental assessments to adhere to Virginia’s Coastal Zone Management program. Most of Virginia’s CPF funds went to the Virginia Appalachian Regional Commission (ARC), said Holmes, who is also the state program manager for ARC.
She added 35 out of 36 CPF projects are currently under contract. The funds are to be distributed through the Virginia Telecommunication Initiative (VATI) grant program.
VATI applicants are required to submit a Notice of Application before they apply for funding. Interestingly, these applicants aren’t ISPs but counties. “In Virginia, our money does not go directly to the private sector. It goes to a unit of local government in partnership with a private sector partner,” Holmes said.
Georgia in January awarded more than $234 million in CPF funding to 12 service providers, including Comcast, Charter and Windstream. Josh Hildebrandt, director of broadband initiatives for the Georgia Technology Authority, characterized the state’s CPF grant process as “robust.”
What Georgia did was look at each county to check if there were at least 2,500 unserved locations or if 20% of the county’s total locations were unserved.
“Because we designed the project area and the challenge cycle on the front end, we knew exactly what would go into these projects at location, providers knew exactly what they were bidding on, they knew exactly what they were going into contract for,” Hildebrandt said.
With CPF, Georgia “went out on a limb” to make sure the most unserved locations in the state were eligible. The state awarded funds to 28 out of its 33 counties, Hildebrandt noted, and the broadband office received applications “for every single one of our project areas.”
If a provider starts building out to a new area, they are asked to routinely update Georgia with the locations they bring online. This is done to mitigate overbuilding.
“That being said, many providers just update with us once a year. We don’t want it to be too onerous,” said Hildebrandt. “Through our challenge, we actually knocked out 11 project areas and that was for good reason - because there were providers who had either already built there or that they were about to finish.”
Pennsylvania has yet to announce CPF project awards. Brandon Carson, executive director of the Pennsylvania Broadband Development Authority, said his office is currently digging into the weeds of the program’s guidelines. The state is also working on standing up three programs to allocate those funds.
“We’re very much in the development phase of our challenge processes. We’ve talked with the other states to get a sense of how their processes worked and where they’ve ran into some snags,” he said.
Before the FCC came out with its updated national map, the Pennsylvania office last year set aside the goal of creating a statewide coverage map.
“We’re working to layer in various other data sets to help with the decision-making process as we’re evaluating applications,” said Carson, emphasizing a robust state map is “absolutely critical.”
“You can accomplish a lot through a robust challenge process, but the state office can also - if it’s working with good data - can ensure that we’re not investing in overbuild situations,” Carson continued.
Relationships with ISPs
The state broadband leaders also brought up the importance of collaborating with providers during the challenge process.
To bolster interaction with ISPs, Pennsylvania’s broadband office stood up a technical subcommittee to keep industry leaders informed about the state’s funding plans. “We’re developing those relationships every day,” said Carson. “Without providers, we’re not going to be successful and we certainly recognize that.”
As for Virginia, Holmes noted she had to be “very strategic” about how the VATI program was going to disperse funds. Part of that was done by forging relationships with various industry organizations, such as the VCTA – Broadband Association of Virginia, as well as with county leaders.
“We had really frank conversations about what they wanted to see this program be,” she said. “When [the General Assembly] passed VATI they said, supplement the construction costs for the private sector…and they said, ‘DHCD, you figure out how you’re going to do that.’”
But it’s critical for ISPs to voice what exactly they need from broadband offices, Hildebrandt pointed out.
“Be somewhat vulnerable with your broadband office to say, ‘these areas are unserved because of this. For us to serve here we need this,’” he said. “It’s not my job to tell you how to run your companies…how to build your networks or anything like that. We are in these roles in a support structure to you all.”