Under the American Rescue Plan Act (ARPA), recipient governments may use State and Local Fiscal Relief (SLFRF) funds to make “necessary investments in broadband infrastructure.” In the Supplementary Information to the Interim Final Rule, Treasury interpreted necessary investments in infrastructure as investments “designed to provide an adequate minimum level of service and [that] are unlikely to be made using private sources of funds.” Treasury explained that, with respect to broadband specifically, such necessary investments include projects that “establish or improve broadband service to underserved populations to reach an adequate level to permit a household to work or attend school, and that are unlikely to be met with private sources of funds.”
The following are some of the key points relating to SLFRF investments by local governments in broadband addressed in the Final Rule issued by Treasury on January 6, 2022.
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Eligible projects are limited to those providing 100mbps symmetrical service.
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Where not feasible either due to geography, topography, or excessive costs associated with such a project, the final service provided must be at least 100 Mbps download speed and between 20-100 Mbps upload speed and scalable to 100 Mbps symmetrical.
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The Final Rule expands eligible areas for investment by requiring recipients to invest in projects designed to provide service to households and businesses with an identified need for additional broadband infrastructure investment
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Examples of need include lack of access to a connection that reliably meets or exceeds symmetrical 100 Mbps download and upload speeds, lack of affordable access to broadband service, or lack of reliable broadband service.
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The wording suggests that a state could allow funding to be used to overbuild existing broadband service if the existing service is deemed unaffordable or unreliable.
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- Funds may be used as match for Broadband Deployment Programs such as those outlined in the Infrastructure Investment and Jobs Act, but the projects are still subject to the eligibility requirements set above.
- Treasury encourages recipients to prioritize projects designed to provide service to locations not currently served by a wireline connection that reliably delivers at least 100 Mbps of download speed and 20 Mbps of upload speed.
- Treasury encourages recipients to prioritize support for broadband networks owned, operated by, or affiliated with local governments, nonprofits, and cooperatives.
- Treasury continues to encourage recipients to prioritize investments in fiber-optic infrastructure wherever feasible and to focus on projects that will achieve last-mile connections, whether by focusing directly on funding last-mile projects or by ensuring that funded middle-mile projects have commitments in place to support new and/or improved last-mile service.
- Recipients must require the service provider for a completed broadband infrastructure investment project that provides service to households to either participate in the Federal Communications Commission’s (FCC) Affordable Connectivity Program (ACP) or otherwise provide access to a broad-based affordability program to low income consumers in the proposed service area of the broadband infrastructure that provides benefits to households commensurate with those provided under the ACP
- Recipients are encouraged to consult with the community on the general affordability needs of the target markets in the proposed service area. Additionally, recipients are encouraged to require that services provided by a broadband infrastructure project include at least one low-cost option offered without data usage caps and at speeds that are sufficient for a household with multiple users to telework and engage in remote learning simultaneously.
- Recipients will be required to report speed, pricing, and any data allowance information as part of mandatory reporting to Treasury.
- The final rule also clarifies that subsidies to households and communities impacted by the pandemic to access the internet, broadband adoption programs, digital literacy programs, and device programs are eligible programs to respond to the public health and negative economic impacts of the pandemic.
- Recipients must ensure that SLFRF funds are designed to address an identified need for additional broadband investment that is not met by existing federal or state funding commitments.