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Broadband and Recovery - the ARRA and State Policies in 2010

Broadband and Recovery - the ARRA and State Policies in 2010

Tuesday, February 9, 2010

PERMALINK: http://www.progressivestates.org/node/24536

Growing-Economy

BY FABIOLA CARRION

Broadband and Recovery - the ARRA and State Policies in 2010

The American Recovery and Reinvestment Act (ARRA) apportioned $7.2 billion to stimulate the development of broadband infrastructure and services.  As the U.S. is now ranked only 17th in global use of broadband and information technology, the ARRA is not only considered a job creator, but also key to regaining long-term economic competitiveness for the nation.  Moreover, as a recent study documents, broadband is becoming a significant determinant of economic vitality at the local level.

Although a limited number of grant applications have been awarded, the ARRA promises to still spin the wheels of innovation as the Administration starts evaluating the next wave of applications for the second round of funding.  In the meantime, states have been moving forward on laying the policy groundwork for using advanced communication technologies to strengthen both economic opportunity and local job creation.

This Dispatch will highlight the trends in the initial grants when it comes to mapping, deployment and adoption broadband, outline broadband policies that states have been pursuing (using federal and state funding), and why these broadband investments are so critical to the long-term economy of our states.

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Innovation in the States Under Initial ARRA Grants

Under ARRA, priority is given to initiatives that encourage broadband deployment adoption in low-income and rural communities, expand public community centers’ capacity, and fund the development of a national broadband map.  Almost $5 billion in grants are to be distributed by the National Telecommunication and Information Administration (NTIA) to deploy broadband infrastructure through its Broadband Technology Opportunities Program (BTOP), and $2.5 billion will be distributed by the Agriculture Department through its Rural Utilities Services' (RUS) Broadband Initiative Program.

Mapping the Digital Divide:  A key ARRA mandate is the collection of information on areas covered by broadband service.  To this end, the NTIA has set aside federal funding to create state maps in order to show the availability, speed, and location of broadband access across the country.  Mapping is critical for consumers and voters - who can learn where broadband service is available - to anchor community institutions such as schools, libraries, and hospitals, as well as for businesses that can benefit from this information and make investments accordingly.  A comprehensive map of broadband availability is therefore critical to help policymakers determine where to allocate resources.

As part of the recent funding round, the NTIA has approved several mapping initiatives, most notably in Iowa where a $2.2 million grant will be dedicated to broadband Internet mapping and planning.  Other states and territories that have benefited from the NTIA's broadband mapping and data collection grants include Florida, Kansas, Illinois, Michigan, Montana, New Hampshire, Utah, the U.S. Virgin Islands, Minnesota, Nevada, Ohio, Puerto Rico, South Carolina, and Tennessee.

Deploying Broadband in Underserved Communities:  The NTIA and RUS are concentrating most of their funds on providing broadband access to unserved and underserved areas increasingly left behind in the global information economy.  Some examples are listed below:

  • Alabama is receiving a $3.8 million grant to provide high speed DSL broadband service to its rural territory.
  • The Broadband Infrastructure Project in Bretton Woods, New Hampshire will receive $985,000 in funding to provide two-way broadband service to 400 households, anchor institutions, and businesses.  The tourism industry is strong in Bretton Woods and having access to broadband will encourage tourists to visit more often and for longer periods of time. 
  • Maine was selected to receive a grant of $498,222 to purchase video conferencing equipment to link 22 schools; Michigan State University received similar funding to create more public computer centers targeting the under-served and the unemployed. 
  • South Dakota was also selected to receive a $306,693 grant to provide video-conferencing as well as telemedicine service to connect 16 rural hospitals and clinics. 
  • Morehouse Parish, Northeast Louisiana Telephone Co. is receiving a $4.3 million grant and $8 million loan for an active ethernet system with symmetrical speeds of 20 Mbps.
  • Other states such as California, North Dakota, Oregon, Virginia, Iowa, Michigan, and Missouri are receiving grants for a fiber-based broadband infrastructure.

Computer Literacy to Promote Digital Inclusion:  Beyond physical support, funds are being aimed to encourage computer literacy and the skills needed to take advantage of communication technologies.  One of these few digital inclusion grants in the early round of ARRA funding was given to the University of Massachusetts-Lowell, which is receiving a $780,000 broadband adoption grant with an additional $196,000 in applicant-provided matching funds to promote broadband awareness and computer literacy among vulnerable populations, including the nation’s second largest Cambodian population, low-income and at-risk youth, the unemployed, residents without college degrees, and seniors in the Lowell and Merrimack Valleys.  As part of the program, University of Massachusetts—Lowell students will work in local computer centers with at-risk youth and seniors to develop appropriate training and outreach materials.

The University of Massachusetts grant is an example of broadband investment going beyond infrastructure, through actual implementation and continued commitment.  It is important to invest in deployment, but it is equally, and arguably, more important, to make sure that gains from broadband are distributed equally among communities and their residents. Various studies confirm that only a third of the population who has access to broadband actually uses it, so the digital divide and job creation can only occur when deployment of broadband infrastructure is accompanied by training and awareness.

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State Legislation to Promote Digital Leadership

In order to strengthen their ability to receive federal funding and to better manage their existing digital resources, state legislatures have been proposing and enacting a wide range of policies to promote their states' digital leadership.

Commissions to Oversee State Broadband Efforts:  In an effort to either receive funding or support ARRA broadband goals, states are introducing and passing bills to adopt or deploy broadband, or map its availability throughout their jurisdictions.

With Oregon's HB 2168 creating a state goal to support the rapid deployment of broadband telecommunications services in areas where the services do not exist, HB 3158 established the Oregon Broadband Advisory Council (OBAC) and the Oregon Broadband Advisory Council Fund to implement these goals and designate representatives from the education, health care, public safety, telecommunications, and government sectors to report on the affordability and accessibility of broadband and the extent of broadband technology use in energy management, education, government, and the telehealth industries.

Other similar efforts include:

  • Indiana (HB 1561), Maine (HB 700), Rhode Island (HB 5975/ SB 968), and Virginia (HB 2423 and SB 1336) all created commissions to advise Governors and other state officials on broadband opportunities, including available funding under the ARRA, and to better plan long-term technology goals for those states.
  • Hawaii has followed in their footsteps by introducing HB 2698, which also requires the Hawaii broadband commissioner to promote and maximize availability of broadband services in the State.
  • Other efforts in Iowa (SF 372) and Colorado (SB 162) are more specifically focused on mapping access in those states. 
  • New Hampshire (SB 159) established the position of Director of Broadband Technology Planning, who is now in charge of developing a comprehensive state broadband plan.
  • Virginia (SB 1456, HB 2201, and SB 236) created the Innovation and Entrepreneurship Investment Authority (IEIA) to monitor trends in the availability and deployment of and access to broadband communications services with its Chief Information Officer developing a comprehensive strategic plan to identify the unmet needs for access to technology.

For states looking to create or enhance commissions in their own states, the Progressive States Network laid out best practices for such commissions in our Guiding Principles for Broadband Strategy Councils.

Supporting Deployment in Underserved Communities:  A few states are working to move beyond planning to directly encourage broadband expansion.

With a heavily rural population, Maine has been a leader in working with private entities to maximize broadband deployment.  Maine's HP 585 gave the Public Utilities Commission the authority to require a communications service provider that is providing broadband coverage within at least 50% of a municipality's geographic area to expand its broadband coverage to all of the geographic area within that municipality.  HB 700 required the Broadband Commission to advise the University of Maine System on how to lease or sell excess broadband capacity and negotiate lease or sales agreements with service providers to ensure they benefit the educational system and meet the goal of broadband access for everyone in the State.  Recently, HP 1174 has been introduced to establish a Broadband policy: promoting sustainable private investment to increase broadband service that exceeds the minimum levels throughout the state, and developing target prices and competitively neutral discounts to customers in areas where services are more expensive than the average metropolitan rates.

Other examples of state action on deployment include:

  • Using federal funds, Massachusetts' HB 4158 authorizes the Massachusetts Technology Park Corporation to develop, lease, or otherwise acquire conduit, fiber, towers, and other personal property related to broadband infrastructure.
  • Tennessee's SB 2355 expands rural broadband connectivity in the state with rural assistance grants.
  • Washington's HB 1701 authorized the Department of Information Services to use federal grants to target and deploy broadband services. 
  • In Virginia, HB 988 allows the Governor's Development Opportunity Fund to provide grants for projects related to capacity development of broadband Internet access.
  • Minnesota's SF 2254 sets a universal and high-speed goal, for no later than 2015, that all residents and businesses acquire access to high-speed broadband that provides minimum download and upload speeds.
  • To encourage more access to utility poles in Georgia, SB 328 has been introduced to prohibit electric suppliers from discriminating cable companies who want to have access to electricity poles.

Promoting Digital Inclusion:  Online training and education is particularly needed for communities that currently have limited access to the Internet: African Americans and Latinos, the elderly and disabled, and residents of rural areas - who can explore educational and professional opportunities and find resources for entrepreneurial assistance.  In an era where entry-level jobs require a familiarity with the Internet, access to and knowledge of broadband applications is essential to economic survival.  As advocated by the Joint Center for Political and Economic Studies, state legislators must ensure that broadband is accessible to consumers, through anchors institutions, community based organizations, and within the home - in addition to being coupled with digital literacy training.

As we noted last year, Washington has been a leader in digital inclusion programs with HB 1701, creating a menu of digital inclusion programs through its Community Technology Opportunity Program, which will promote Internet adoption, training, and skill-building opportunities; access to hardware and software; digital inclusion and digital media literacy; development of locally relevant content; and organizational and capacity building support to community technology programs throughout the state.

See also PSN's Guiding Principles for Digital Inclusion Policies for other best practices.

Connecting Job Creation to Broadband Efforts:  States are increasingly creating complementary job creation programs connected to their broadband efforts:

  • Iowa's SF 376 instituted the Iowa Jobs Program, authorizing the creation of jobs related to broadband.
  • Vermont's HB 711 proposes to provide economic incentives for businesses and farms to create and preserve jobs and improve the state's technological infrastructure and economic environment.  Under the provisions of this bill, Vermont will distribute $3.7 million from the $8.67 million it received under the ARRA's fiscal stabilization general services fund.  HB 711 also establishes the Broadband Adoption Program for the purposes of accelerating the subscription to and use of broadband Internet access by the public, thereby increasing the sustainability of broadband networks in Vermont, especially in rural and underserved communities.
  • Virginia's HB 1660 established the Office of Telework Promotion and Broadband Assistance, which aims to encourage telework as a public policy in order to promote workplace efficiency and reduce strains on the transportation infrastructure.
  • Recently introduced, Hawaii's SB 2543 establishes an office of telework promotion and broadband assistance.

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How Broadband Delivers Economic Growth

Before we even mark the ARRA's first anniversary, states have already found that mapping, deployment, and adoption efforts lead to economic development.  For instance, Kentucky's HB 204 concludes that its ConnectKentucky project to promote deployment and adoption of broadband services has resulted in enhanced economic development and public safety for Kentucky communities, improved health care and educational opportunities, and a better quality of life for Kentucky citizens.

A recent report from the Public Policy Institute of California found that areas with broadband saw employment growth 6.4 percent higher than areas without it in the period from 1999 to 2006, with the highest employment growth where technology services represent a larger share of local industry’s inputs.  Careful analysis in the report indicates that this relationship is not incidental but a causal relationship between deployment and subsequent economic growth.

This report confirms findings by earlier studies from such organizations as the Brookings Institution, which estimated that for every one percentage point increase in broadband penetration in a state, employment increases by 0.2 to 0.3 percent per year.  Other studies estimate that in the early stages of the Internet, information technologies were responsible for two-thirds of total growth in productivity and that for every dollar invested in broadband, the economy sees a ten-fold return on that investment.  In a report to the Federal Communications Commission, the U.S. Broadband Coalition - representing more than 160 organizations that include communication providers, labor unions, consumer groups, educational institutions, and units of state and local government - estimated that investment in broadband can create or retain 1 million to 2.5 million jobs.

Among broadband's greatest advantages is its intersection with various sectors of the economy:  with energy through smart grid technologies, health care through telehealth, agriculture through crop and irrigation management, transportation through traffic management, and homeland security through mobile detention systems.

The Need to Address Economic Inequality:  One important finding in the recent Public Policy Institute study is that while broadband leads to job growth, the benefits are not equally distributed within communities.  Wages do not always increase and the concentration of workers in a few high-tech enclaves may retain local tax revenues in municipalities that host information technology companies.

Broadband expansion needs to be encouraged, the study concludes, but to address the digital divide, funds invested in its expansion "might have a large effect on economic or social outcomes if the funds were allocated instead toward subsidizing broadband adoption or other needs of disadvantaged households."  This highlights again why digital inclusion and training programs are important as a complement to paying for the physical wiring of our nation, as very few state or federal funds have been apportioned to such broadband use and training programs.

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The Next Round of ARRA Grants

With the intention to increase efficiency in the next application review process, the NTIA and RUS announced in January the availability of $4.8 billion for the second round of ARRA funding.  As the NTIA and RUS are ready to implement their new standards, the agencies plan to accept applications from February 16, 2010, to March 15, 2010, and will announce all awards by September 30, 2010.

Lessons Learned:  Among its most fundamental changes is the NTIA’s plan to award at least $150 million for Public Computer Center projects that expand access to broadband service and enhance broadband capacity in public libraries, community colleges, and other institutions that service the general public.  Additionally, the NTIA is prepared to award at least $100 million for Sustainable Broadband Adoption, which includes projects to provide broadband education, training, and equipment, particularly to vulnerable population groups where broadband technology has traditionally been underutilized.  In an effort to expand more funding to unserved and under-served communities, the NTIA is adopting a “comprehensive community approach” as the way that it will evaluate applications, focusing in middle mile broadband projects that connect key community anchor institutions.  These are great steps toward digital inclusion.

A series of workshops on grant and loan writing for ARRA applications are being held in various states by Broadband USA.  

The Role of States:  States are the advisors to the federal agencies that approve broadband program applications.  As mandated by the ARRA, the NTIA and USDA must consult with state governments in order to determine which programs would best serve underprivileged areas, knowledge that state officials uniquely posses.  The advisory role of states begins with their knowledge of communities that are un-served and underserved.  This understanding continues with their assessment of which communities would benefit the most from the stimulus and would receive the actual funding.

Not only do states understand the immediate benefits that loans and grants would provide, but also they can assess the long-term effects in their communities and how these can be disseminated throughout their states.  With every incentive to make the money work, states know which ARRA funded programs would best compliment already existing programs, and how the benefits can be shared by nearby communities that are not receiving direct ARRA funding.

As we wrote in our Dispatch Making Broadband a Key Part of States' Economic Recovery, the Progressive States Network encourages grassroots organizations and other groups to seek the advice of their state legislators before submitting any application for ARRA funding.  State legislators can provide knowledge of the results in the approval of an ARRA grant or loan.  An example of direct state participation took place in Massachusetts where Governor Deval Patrick played a crucial role in the approval of $2 million in funding for the development of broadband data requisition and mapping across the 351 communities of the state.  Specifically, the funding will be directed towards building new broadband infrastructure that will bring high-speed Internet access to tens of thousands of households, businesses, and community anchor institutions, including the un-served and under-served communities of western Massachusetts and Cape Cod.

State legislators can provide vital information and recommendations for ARRA applications and they will also act as inevitable monitors of the implementation of the funded programs.  We anticipate that state legislators will continue to act as watchdogs of ARRA program implementation.  Furthermore, their participation is imperative as many of these federal grants will simultaneously go towards private companies, non-government entities, and ad hoc projects.  It is important that state officials ensure that selected projects reach the intended populations and are implemented in the public interest.

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Resources

Broadband and Recovery - the ARRA and State Policies in 2010

CBC News - Canada drops in UN communications technology ranking
Public Policy Institute of California - Does Broadband Boost Local Economic Development?
Department of Commerce’s National Telecommunications and Information Administration - Commerce Awards Recovery Act Broadband Expansion Grants Totaling $63 Million  

Innovation in the States Under Initial ARRA Grants

The National Telecommunications and Information Administration
The Department of Agriculture's Rural Utilities Services
Business Record - Iowa Gets Broadband Boost with Aid of Grant
Connected Nation
United States Department of Agriculture - Secretary Vilsack Announces Almost $35 million in Funding for Distance Learning and Telemedicine Projects
BroadbandBreakfast.com - Rural Utilities Service Unveils $310 Million in Stimulus Funds for 14 Projects

State Legislation to Promote Digital Leadership

Progressive States Network - Guiding Principles for Broadband Strategy Councils
Progressive States Network - Guiding Principles for Digital Inclusion Policies
Progressive States Network - Washington State Legislature Passes Legislation Aimed at Increasing both Access and Adoption of Broadband
Joint Center for Political and Economic Studies - Broadband Imperatives for African Americans: Policy Recommendations to Increase Digital Adoption for Minorities and Their Communities

How Broadband Delivers Economic Growth

U.S. Broadband Coalition - Report of the U.S. Broadband Coalition on a National Broadband Strategy
The Brookings Institution - The Effects of Broadband Deployment on Output and Employment: A Cross-sectional Analysis of U.S. Data
Public Policy Institute of California - Does Broadband Boost Local Economic Development?

The Next Round of ARRA Grants

United States Department of Agriculture - Commerce Department's NTIA and USDA's RUS Announce Availability of $4.8 Billion in Recovery Act Funding to Bring Broadband to More Americans
Broadband USA
Progressive States Network - Making Broadband a Key Part of States' Economic Recovery

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The Stateside Dispatch is written and edited by:

Nathan Newman, Executive Director
Nora Ranney, Legislative Director
Marisol Thomer, Outreach Director
Fabiola Carrion, Broadband and Green Jobs Specialist
Enzo Pastore, Health Care Policy Specialist
Altaf Rahamatulla, Tax & Budget Policy Specialist
Julie Bero, Executive Administrator and Outreach Associate
Mike Maiorini, Online Technology Manager

 

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