Doug Dawson (Pots and Pans) is a smart guy. Yesterday he wrote about the FCC’s latest brand of rural broadband grants (RDOF) and a clause that seems to disqualify recipients that receive other state or federal funding. That means (and Doug points out below) that communities that have received MN Broadband grants would not qualify…
It’s important to remember that the RDOF grants are aimed at the most remote customers in the country – customers that, by definition, will require the largest investment per customer to bring broadband. This is due almost entirely due to the lower household densities in the RDOF grant areas. Costs can be driven up also by local conditions like rocky soil or rough terrain. Federal funding that provides enough money to build broadband in the plains states is likely not going to be enough to induce somebody to build in the remote parts of Appalachia where the RDOF grants are most needed.
State grant programs often also have other agendas. For example, the Border-to-Border grants in Minnesota won’t fund broadband projects that can’t achieve at least 100 Mbps download speeds. This was a deliberate decision so that government funding wouldn’t be wasted to build broadband infrastructure that will be too slow and obsolete soon after it’s constructed. By contrast, the FCC RDOF program is allowing applicants proposing speeds as slow as 25 Mbps. It’s not hard to argue that speed is already obsolete.
I know ISPs that were already hoping for a combination of federal and state grants to build rural infrastructure. If the FCC kills matching grants, then they will be killing the plans for such ISPs that wanted to use the grants to build fiber networks – a permanent broadband solution. Even with both state and federal grants, these ISPs were planning to take on a huge debt burden to make it work.
If the matching grants are killed, I have no doubt that the RDOF money will still be awarded to somebody. However, instead of going to a rural telco or electric coop that wants to build fiber, the grants will go to the big incumbent telephone companies to waste money by pretending to goose rural DSL up to 25 Mbps. Even worse, much of the funding might go to the satellite companies that offer nothing new and a product that people hate. I hate to engage in conspiracy theories, but one of the few justifications I can see for killing matching grants is to make it easier for the big incumbent telcos to win, and waste, another round of federal grant funding.
Minnesota has had great success encouraging larger providers to use their federal funding (CAF 2) to build to higher speeds in communities such as Sunrise Township. CenturyLink is the provider there. The community, federal and state grants have built a better network with CenturyLink.
The recipe of state and federal funds worked well in Sunrise and Fish Lake Townships. While on the other hand, both CenturyLink and Frontier have reported that they “may not have met” statewide benchmarks set up for their CAF 2 funding.
Maybe the FCC should check out the Minnesota model. It seems that having the state support, which in itself requires more local support, is an asset to making it happen and happen as Doug notes above – so that government funding wouldn’t be wasted to build broadband infrastructure that will be too slow and obsolete soon after it’s constructed.