Investing in Middle Mile Infrastructure

Saturday, November 6, 2021

Digital Beat

“Middle-mile” networks are the connections from national and major regional internet backbones to local networks. Provisions of the Infrastructure Investment and Jobs Act provide a new funding mechanism to improve middle-mile infrastructure and make it easier to deliver broadband in currently unserved and underserved areas.

Middle Mile Grants Program

The National Telecommunications and Information Administration (NTIA), an agency in the U.S. Department of Commerce, will create a program that makes grants on a technology-neutral, competitive basis to eligible entities for the construction, improvement, or acquisition of middle-mile infrastructure. The twin purposes are to 1) encourage the expansion and extension of middle-mile infrastructure to reduce the cost of connecting unserved and underserved areas to the backbone of the internet and 2) promote broadband connection resiliency through the creation of alternative network connection paths that can be designed to prevent single points of failure on a broadband network. To achieve these goals, the law creates a middle-mile grants program at the NTIA. 

Congress has allocated $1 billion for these competitive grants. No more than $20 million may be used by NTIA to administer the program. (One million dollars of that goes to the Office of the Inspector General of the Department of Commerce.) The funds are available until September 30, 2026.

NTIA is to give priority to applications that satisfy two or more of the following conditions:

  • Adopts fiscally sustainable middle mile strategies;
  • Commits to offering non-discriminatory interconnection to terrestrial and wireless last-mile broadband providers and any other party making a bona fide request;
  • Identifies specific terrestrial and wireless last-mile broadband providers that have 1) expressed written interest in interconnecting with middle-mile infrastructure planned to be deployed by the eligible entity, and 2) demonstrated sustainable business plans or adequate funding sources with respect to that interconnection;
  • Identifies supplemental investments or in-kind support (such as waived franchise or permitting fees) that will accelerate the completion of the planned project; 
  • Demonstrates that the middle mile infrastructure will benefit national security interests of the United States and the Department of Defense.

It is the sense of Congress that NTIA will also prioritize projects that:

  • Leverage existing rights-of-way, assets, and infrastructure to minimize financial, regulatory, and permitting challenges;
  • Route the middle-mile infrastructure to enable the connection of unserved anchor institutions (think schools, libraries, healthcare, and other community support institutions, including Tribal anchor institutions); 
  • Facilitate the development of carrier-neutral interconnection facilities; and
  • Improve the redundancy and resiliency of existing middle-mile infrastructure and reduce regulatory and permitting barriers to promote the construction of new middle-mile infrastructure.

Who is Eligible for Middle-Mile Grants?

States, political subdivisions of a state, Tribal governments, technology companies, electric utilities, utility cooperatives, public utility districts, telecommunications companies, telecommunications cooperatives, nonprofit foundations, nonprofit corporations, nonprofit institutions, nonprofit associations, regional planning counsels, Native entities, and economic development authorities (or partnerships of two or more these entities) are eligible for Middle Mile Grants. In its application, an entity must provide evidence that it is capable of carrying out a proposed project in a competent manner, including by demonstrating that it has the financial, technical, and operational capability to carry out the proposed project and operate the resulting middle-mile broadband network.

For the purposes of this program, an unserved area is no larger than a census block and, according to the Federal Communications Commission, does not have access to 25/3 broadband service.

The applicant must agree to prioritize:

  • Connecting middle-mile infrastructure to last-mile networks that provide or plan to provide broadband service to households in unserved areas;
  • Connecting non-contiguous trust lands; and
  • Offering wholesale broadband service at reasonable rates on a carrier-neutral basis.

Any regulated utilities that use Middle Mile Grant funds are expected to use the support as a supplement to their core utility capital investment plan in order to 1) facilitate increased broadband resiliency or redundancy of existing middle-mile infrastructure or 2) provide connectivity to unserved areas and underserved areas within the service territory of the utility and nearby communities. 

What Can Middle-Mile Grants Be Used For?

Middle-mile infrastructure is any broadband infrastructure that does not connect directly to an end-user. The infrastructure includes leased dark fiber, interoffice transport, backhaul, carrier-neutral internet exchange facilities, carrier-neutral submarine cable landing stations, undersea cables, transport connectivity to data centers, special access transport, wired or private wireless broadband infrastructure, including microwave capacity, radio tower access, and other services or infrastructure for a private wireless broadband network, such as towers, fiber, and microwave links.

NTIA will determine if a project’s middle-mile infrastructure is capable of supporting retail broadband service. In addition, the infrastructure must be capable of providing symmetrical gigabit broadband service to community anchor institutions, including direct interconnect facilities that will facilitate the provision of broadband service to anchor institutions located within 1,000 feet of the middle mile infrastructure.

In mapping out gaps in broadband service, applicants can use the most recent data from the Federal Communications Commission (FCC), their state, or speed and usage surveys.

Awardees must share the location of the middle-mile infrastructure they construct in this program with the NTIA, the FCC, the state’s broadband office, and Tribal governments (if the network serves Tribal Lands). 

Middle Mile Grants will require matching funds; a grant may not exceed 70 percent of the total project cost.

Interconnection and Nondiscrimination

Interconnection is the physical linking of two or more networks for the mutual exchange of traffic on non-discriminatory terms and conditions. And interconnection is a key element of the Middle Mile Grants. Networks built with funds from this program must offer interconnection in perpetuity (which is a long time) with reasonable rates and terms to be negotiated with requesting parties. This interconnection includes both the ability to connect to the public internet and physical interconnection for the exchange of traffic. Applicants for grants must disclose their proposed interconnection, nondiscrimination, and network management practices. 

Tribal Lands

Congress has included some special provisions targeted at facilitating middle-mile infrastructure deployment to Tribal Lands where the high cost to connect to middle-mile infrastructure is a barrier to improving access. First, NTIA will work with Tribal governments and Native entities to develop a process for designating Tribally unserved and underserved areas. To better deliver and administer Middle Mile Grants and construct middle-mile infrastructure on Native Lands, NTIA may waive certain requirements of the program prioritization, buildout deadlines, and cost sharing.

Timeline

NTIA has 6 months to issue a notice of funding opportunity about the new program. Within 9 months after that notice is issued, NTIA will make the grant awards.

Awardees must complete their middle-mile construction within five years of winning a grant. (NTIA may extend the buildout deadline by no more than a year if the project is underway or if there are extenuating circumstances.)

In December 2020, the Benton Institute for Broadband & Society published a policy brief on the importance of middle-mile networks.

See If We Build It, Will They Come? Lessons from Open-Access, Middle-Mile Networks

 

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Investing in Middle-Mile Infrastructure

How the Infrastructure Investment and Jobs Act will Make Broadband More Affordable

Addressing the Workforce Needs of the Telecommunications Industry

Enhancing the Tribal Broadband Connectivity Grant Program

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