The Office of Broadband Development has been distributing Border to Border (BTB) grants since they were established in 2014. This year a new grant has been introduced, the Low Density Pilot (LDP) grant. As the name implies, the Low Density Pilot, is a pilot. The idea is to try it and see if it works. It’s very early days but it seems like there are already some observations to be made. The most recent awards included BTB and LDP, The funds for LDP were fully distributed; the funds for BTB were not, which left money unspent. Also, of the $37M invested in BTB grants, $8.6M went to Twin Cities communities; no LDP money went to Twin Cities communities. It might indicate that reallocation of funds is worth considering.
Added 10 mins after original post: apparently $30M wasn’t allocated to LDP but “up to $30” so the total was $25M state funds plus $42M federal = $67M of which ~$30 went to LD pilot. Total awards $66.8M, which means most of the money was spent.
What is the difference between BTB and LDP?
For the regular Border-to-Border Grant Program the maximum individual grant amount is $5 million and the maximum grant funding award cannot exceed 50% of the eligible total project costs. For the Low-Density Pilot Grant Program, the maximum individual grant amount is $10 million and the grant funding award cannot exceed 75% of the eligible total project costs. Priority consideration is be given to projects that leverage greater amounts of funding for a project from other private and public sources.
What budget was available?
There was $42.6 million available for BTB grants and up to $30 million for the LDP program.
How much was distributed?
Almost $6.7 million was awarded, including $30M for LDP program and $37 for BTB.
Was the money spent?
BTB funds were not all distributed. There was $42.2 million available and only $37 million spent, which leaves $5.2 million on the table. Presumably, that money will get rolled into the next round of funding but for projects that are ready-to-go and in an economic climate where prices are increasing that feels like a loss. LDP funding was nearly spent; there was less than $50,000 on the table.
I don’t know why the unfunded projects didn’t receive awards, but the Office of Broadband Development has a respected history of grant management. Their work is award-wining and has been lifted up as a model to others. The easier question or lesson might be to ask if it makes sense to shift more money to the LDP applications.
Doing some quick math, the investment per passing in the BTB projects is $4033 and investment per passing for the LDP projects is $11,228. But almost 10 years into State grants, maybe it’s unfair of me to even use a business calculation on a grant-funded investment. Maybe I need to find a way to calculate the cost to the State and the community of not investing.
Border-to-Border
- Award available: $42.2M
- Grant award total: $37M
- Total requested: $104.5M
- Number of passings: 10,464
- Grant awards: 21
- Grant applications: 60
Low-Density Pilot
- Award available: $30M
- Grant award total: $30M
- Total requested: $80.7M
- Number of passings: 2,672
- Grant awards: 9
- Grant applications: 28
Where was the money spent?
Another difference is where the money was spent. I don’t know that the geographic distribution is an interesting as the potential rural-urban difference; of the $37M invested in BTB grants, $8.6M went to Twin Cities communities. There are definitely portions of the Twin Cities that are unserved but it might be worth investigating whether to BTB eligibility favors more urban areas – areas where smaller grants with a greater match mare more feasible. It makes sense to open up the doors to all communities but maybe the Office of Broadband Development should be authorized to redistribute funds prioritizing needs and applications over grant classification.
Another indicator might be successful challenges made in each grant-type. There were 14 BTB challenges that changed the outcomes of the grants and/or projects. No LDP challenges had an impact on LDP awards. That would indicate to me that providers are or will be serving the BTB areas impacted by 14 challenges. The LDP areas didn’t have viable challenges, which indicates to me that they won’t be getting service soon without grant support.
Border-to-Border
- Twin Cities recipients: 4
- Investment in Twin Cities: $8.6M
- Number of challenges resulting in partial or non-funding: 14
Low Density Pilot
- Twin Cities recipients: 0
- 7-County Metro Area recipients: 0
- Number of challenges resulting in partial or non-funding: 0
First of all Ann, thank you for correcting your numbers. It’s not like you to publish something that isn’t fully vetted and thought out. It’s unfortunate that you chose to make this a metro – rural discussion.
A lot of us spent a lot of time in 2013 to get the rules around the B2B grant program right. We obviously got there since it has been used as a model by other states and even the Federal government. Here is the criteria that OBD uses:
Awarding grants. (a) In evaluating applications and awarding grants, the commissioner shall give priority to applications that are constructed in areas identified by the director of the Office of Broadband Development as unserved.
(b) In evaluating applications and awarding grants, the commissioner may give priority to applications that:
(1) are constructed in areas identified by the director of the Office of Broadband Development as underserved;
(2) offer new or substantially upgraded broadband service to important community institutions including, but not limited to, libraries, educational institutions, public safety facilities, and healthcare facilities;
(3) facilitate the use of telehealth and electronic health records;
(4) serve economically distressed areas of the state, as measured by indices of unemployment, poverty, or population loss that are significantly greater than the statewide average;
(5) provide technical support and train residents, businesses, and institutions in the community served by the project to utilize broadband service;
(6) include a component to actively promote the adoption of the newly available broadband services in the community;
(7) provide evidence of strong support for the project from citizens, government, businesses, and institutions in the community;
(8) provide access to broadband service to a greater number of unserved or underserved households and businesses; or
(9) leverage greater amounts of funding for the project from other private and public sources.
(c) The commissioner shall endeavor to award grants under this section to qualified applicants in all regions of the state.
No where in these requirements is there a division between rural and metro, as it should be. B2B grant dollars are available to all parts of the state equally. This is to ensure that the money goes to those who have little or no broadband today.
The Low Density Pilot Program was MTA’s proposal in the 2022 Legislative session and we continue to fully support it. We all know that the 50% match isn’t going to work forever to tip the scales on a business case to deploy Broadband, we just don’t know when that will be. There are still a lot of good projects that make sense at 50%. the LDPP was designed to test the waters on how many projects are out there that need a higher match. Obviously, none of that money is going to go to the Metro, because it is a low population density program. By definition that isn’t the Metro.
Right now it is not an either or situation, both need to be funded. We must also be clear that not all applications should be funded. There are some bad applications and you correctly point out that OBD has a respected history of grant management.
You did an excellent job coming up with the parameters for the grants!
I agree that the grants should be open to all unserved and underserved communities. And I agree that there are still areas where 50 percent match will work. But the communities in areas that need 75 percent match are at a disadvantage if we are investing more in the 50 percent grants.
I think now is the time let the OBD decide which grants merit funding based on the quality of the application/applicant and remove the filter of match required – or just as important size of requested grant. The average BTB grants was $1.8M and average LDP was $3.3M.
Or at least now is the time to start discussing it.