How a State Can Blow a Once-in-a-Generation Investment to Close the Digital Divide

Friday, March 11, 2022

Weekly Digest

Illinois Bill Flies in the Face of Federal Law and Leaves Money on the Table

 You’re reading the Benton Institute for Broadband & Society’s Weekly Digest, a recap of the biggest (or most overlooked) broadband stories of the week. The digest is delivered via e-mail each Friday.

Round-Up for the Week of March 7-11, 2022

Kevin Taglang
Taglang

The Illinois General Assembly is currently considering legislation that will constrain the state’s use of Infrastructure Investment and Jobs Act broadband funding and likely impair efforts to close the digital divide in Illinois. Earlier this year, Illinois State Senator Patrick Joyce (D-Essex) introduced the Illinois Broadband Deployment, Equity, Access, and Affordability Act of 2022 (SB 3683), a bill that is rumored to be on a fast track to approval and attempts to establish the exclusive processes the state will use to distribute grant funds Illinois receives from the National Telecommunications and Information Administration (NTIA) through the Infrastructure Investment and Jobs Act. Although SB 3683 includes some of the same findings that Congress included in the Infrastructure Investment and Jobs Act (1), State Senator Joyce proposes constraints on the use of federal funds that fly in the face of the clear language of federal law. If Illinois adopts this law, it risks losing access to over one billion dollars of federal support for broadband deployment.

Background 

The Infrastructure Investment and Jobs Act includes over $42 billion for broadband deployment grants to the states through the NTIA’s Broadband Equity, Access, and Deployment (BEAD) Program. And states, in turn, will competitively award subgrants to the parties that will actually build, operate, and maintain new broadband networks. Although many observers are waiting on grant guidelines to emerge from the NTIA and broadband maps to be finalized by the Federal Communications Commission, this is really a time for states to begin the work of identifying areas that could benefit from broadband investment and planning and on how best to ensure service reaches everyone. Of late, we’ve seen resources for states from the NTIA, from Fiber Broadband Association, NTCA –The Rural Broadband Association, and Cartesian, from the Pew Charitable Trusts’ Broadband Access Initiative, and from US Ignite. [Truth be told, we think we’ve published some great resources at Benton, too.]

In 2019, Governor JB Pritzker (D-IL) launched Connect Illinois, a $400 million broadband grant program and a $20 million capital program for the Illinois Century Network, a high-speed broadband network serving K-12 and higher education institutions, among others. The investment made Illinois a national leader in universal broadband. The twin aims of Connect Illinois are to ensure every home, business, and community anchor institution in the state has access to basic broadband service of at least 25/3 Mbps by 2024—and, by 2028, will have access to at least one provider offering 100/20 Mbps service.

The Infrastructure Investment and Jobs Act provides federal support to not just reach Illinois’ broadband goals but to accelerate them.

Illinois Broadband Deployment, Equity, Access, and Affordability Act of 2022

SB 3683 includes provisions that contradict key aspects of the Infrastructure Investment and Jobs Act. Since NTIA must approve each state’s plan to bring broadband service to every address in the state, Illinois risks losing its BEAD program funding if NTIA finds that SB 3683 is incompatible with federal law. Here are some of the major discrepancies: 

No Plans for Connecting Community Anchor Institutions

First, although the BEAD Program—as mandated by Congress—will provide federal support for projects that serve unserved areas, underserved areas, and community anchor institutions, SB 3683 would restrict Illinois’s BEAD funds exclusively to unserved areas which the bill defines as an area lacking access to 100/20 broadband service from at least one internet service provider. The bill would eliminate from eligibility Congress’ third priority: ensuring all community anchor institutions have gigabit-level broadband service.

Narrowing the Field of Potential Competitors

Although SB 3683 would require Illinois to award BEAD funds “by a competitive grant process,” the bill narrows the field of potential competitors.

Although Illinois does not currently place restrictions on how communities invest in their own connectivity and the Infrastructure Investment and Jobs Act explicitly prevents states from excluding local governments and public-private partnerships from eligibility for BEAD program grants, SB 3683 would ban use of BEAD money by any governmental entity “to own, purchase, construct, operate, or maintain a communications network, or to provide service to any residential or commercial premises.” This restriction means networks run by Highland, and Urbana and Champaign, for instance, could not expand to provide service in nearby unserved areas. SB 3683 would also limit grant winners to cable operators and other entities currently providing broadband in Illinois on a commercial basis to their subscribers. SB 3683, then, would restrict BEAD program grants from supporting new entrants to serve areas where no broadband providers currently offer service. 

SB 3683 also would prohibit from accepting or benefiting from any grant funds any entity or person who has partnered with the state of Illinois in relation to the state’s broadband deployment, access, and infrastructure policies. The prohibition includes companies and organizations that have made presentations to Illinois communities that have participated in:

  • Connect Illinois, the state’s historic $420 million investment in broadband infrastructure included in the Rebuild Illinois capital plan.
  • Illinois Connected Communities—a collaboration among the Illinois Office of Broadband, the Illinois-based Benton Institute for Broadband & Society, and local philanthropy— designed to engage cohorts of communities through best practice curriculum, expert consultation, and a state grant of up to $15,000.  
  • The Broadband Regional Engagement for Adoption + Digital Equity (READY) Grant Program which provides a roadmap to eliminating the digital divide through regional collaboration for equitable advances in the areas of broadband access, adoption, and utilization.
  • The Illinois Broadband Lab—a collaborative effort among the Illinois Office of Broadband, the University of Illinois, and the Benton Institute for Broadband & Society, to advance shared interests in broadband data and research, explore various aspects of the digital divide, and provide thoughtful analysis of the Connect Illinois capital investment and related programming.
  • The Computer Equity Network which collects, refurbishes, and redistributes used computers on an equitable basis in every county in Illinois.
  • Accelerate Illinois Broadband Infrastructure Planning Program—a collaborative effort among the Illinois Office of Broadband, the Benton Institute for Broadband & Society, University of Illinois Extension, and Heartland Forward’s Connecting the Heartland Initiative that helps local governments throughout Illinois receive expert support as they prepare to leverage new dollars that will be made available by the state as well as through the historic passage of the federal infrastructure program.

The prohibition seemingly would also impact members of the state’s Broadband Advisory Council, which developed the statewide broadband strategic plan. The advisory committee includes members from broadband providers Frontier, Verizon, Metro Communications, Comcast, and AT&T.

Removing Pro-Competition, Pro-Consumer Terms and Conditions

By law, BEAD-supported broadband networks will have to meet a number of requirements like speed, low latency, reliability, universal access, providing at least one low-cost broadband service option, interconnection, and conducting public awareness campaigns. But BEAD program projects in Illinois, according to SB 3683, would be exempt from any terms or conditions of service that differ from a broadband provider’s terms or conditions of service in its other service areas. As written, SB 3683 explicitly says that there can be no open network architecture requirement or rate regulation. That means BEAD-supported networks in Illinois would be local monopolies. And the legislative language could be read to negate the Infrastructure Act’s requirement that BEAD-supported networks offer low-cost broadband service options for eligible subscribers.

Excluding Enhancements of Current Projects

The Infrastructure Investment and Jobs Act allows for entities that have government support to expand broadband access to also receive BEAD funding. Congress explicitly says BEAD funding is intended to “supplement, and not supplant” other support. But, as written, SB 3683 states that providers cannot receive BEAD support through Illinois in areas where the providers have already obtained federal, state, or local funding awarded to support the expansion of broadband networks. So, even though Congress intended the BEAD program to accelerate or improve upon previous efforts to extend broadband’s reach, SB 3683 would not allow such enhancements. 

Limiting Project and Provider Awards

SB 3683 would limit any BEAD-supported projects and providers to no more than $10 million in awards. Although the legislation makes no mention of geographical size in this limitation, the bill also prioritizes projects that serve the largest unserved areas and the greatest number of locations. A provider would face the same limitation no matter if it were bidding to serve one neighborhood or multiple counties in Illinois. The Infrastructure Investment and Jobs Act sets no such limits.

Eliminating Sources of Matching Funds

The Infrastructure Investment and Jobs Act requires states or grantees to provide no less than 25 percent of project costs with the exception of high-cost areas. The Infrastructure Act allows those funds to come from the state, local governments, or others and may include funding from the Families First Coronavirus Response Act, the CARES Act, the Consolidated Appropriations Act, and the American Rescue Plan Act. If SB 3683 is adopted, Illinois would have to prioritize applications from broadband providers that commit to providing at least 20% of the project costs, excluding in-kind costs. However, since SB 3683 would also ban governmental entities from partnering in projects, Illinois communities would not be able to use any funds—including federal funds from COVID-relief legislation—to help reach the 25% match NTIA will be looking for. Where will the other 5% match come from?

Could SB 3683 Be A National Model?

These provisions in SB 3683 represent a number of threats.

First, since it seems incompatible with the Infrastructure Investment and Jobs Act, the Illinois legislation, if it becomes law, could make the state ineligible for its allocation for federal broadband funding if NTIA does not approve Illinois’ broadband plan. That’s a worst-case scenario for areas in the state without sufficient broadband service.

Second, the NTIA could allow the Infrastructure Act funds to flow to Illinois with the SB 3683 rules. In that scenario, Illinois community anchors like schools and libraries are not guaranteed to be served, the state’s bidding process would be less competitive than mandated by Congress, service will be delivered with less pro-consumer and pro-competition terms, and less funding is available to support the new networks. 

Finally, observers are concerned that SB 3683 could become a stalking horse and model for other states that could want to limit the Infrastructure Investment and Jobs Act. Such limitations could make it harder to close the digital divide.  

SB 3683 hasn’t had a hearing or a vote in the Illinois State Senate yet. But watch this space for updates. 

Notes

  1. Similar to the Infrastructure Investment and Jobs Act, SB 3683 finds that (1) access to affordable, reliable, high-speed broadband service is essential to full participation in modern life in the State and throughout the United States; (2) the persistent “digital divide” in the State and in the United States is a barrier to the economic competitiveness in the economic distribution of essential public services, including health care and education; and (3) the digital divide disproportionately affects communities of color, lower-income areas, and rural areas, and the benefits of broadband should be broadly enjoyed by all.

Quick Bits

Weekend Reads (resist tl;dr)

ICYMI from Benton

Upcoming Events

Mar 14—Black Churches Leading Digital Equity Conversations (Multicultural Media, Telecom and Internet Council)

Mar 15—Competition, Concentration and Antitrust: Squaring the Circle (Georgetown University)

Mar 16—5G and Beyond: Exploring the Next Wireless Frontier (House Commerce Committee)

Mar 16—March 2022 Open FCC Meeting

Mar 16—Building for Digital Equity—Demystifying Broadband Policy and Funding (Institute for Local Self-Reliance)

Mar 21—Task Force for Reviewing the Connectivity and Technology Needs of Precision Agriculture in the United States (FCC)

Mar 23—Infrastructure Investment and Jobs Act Broadband Programs Pre-NOFO Technical Assistance Webinar #2 (NTIA)

Mar 23—USF Reform: Learning from Prior Efforts (Georgetown University)

Mar 24—Bipartisan Infrastructure Law Guidebook: Broadband (White House)

Mar 29—Bipartisan Tech 2022 (Next Century Cities)

Mar 30—Advances in Cable Broadband: It’s Not Your Parents’ Cable Broadband Anymore (CENIC)

Mar 31—FCC Oversight Hearing (House Commerce Committee)

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