Tilson's new report, State Broadband Program Analysis, should set off alarms. According to the report, most state and territorial governments lack readiness for administering billions in broadband funds from President Biden's Infrastructure Bill and American Recovery Act. Only 25 of the 54 states and territories Tilson surveyed can administer broadband grants right now. And 30% of enacted broadband grant laws in states and territories are biased against wireless technologies that could help close the digital divide.
This lack of readiness is a problem because states can already apply for American Recovery Act funds, and the Infrastructure Bill requires the Department of Commerce to launch its grant program by mid-May of 2022. It takes time for states and territories to establish processes, assemble staff, and dedicate resources for administering broadband grants. The biggest time hurdle is often passing legislation, or at minimum, some sort of executive or agency order. There is no guarantee states and territories will be ready to go when the Infrastructure Bill's program launches, which risks delay, added cost, and reduced effectiveness for closing the digital divide.
Tilson grouped the 54 states and territories into four categories based on their readiness for administering broadband grants:
- 6 have no capabilities for administering broadband grants
- 9 have merely proposed legislation for administering broadband grants
- 18 have passed legislation but have not begun administering broadband grants.
- 25 are actively administering or have administered broadband grants of some sort.
Notably, while it appears that 43 state and territorial governments have at least passed legislation, the legislation Tilson counted includes laws for any past broadband grant program, including legacy state and federal programs and inactive programs. This means that some of the states and territories with laws on the books or even active grant programs could need to amend their laws or issue new orders to participate in Biden-era programs.
Additionally, Tilson estimates that 30% of states and territories with existing laws for broadband grants are biased against funding wireless technologies. This lack of tech-neutrality could lead to waste because low-cost solutions like fixed wireless will be excluded from competing for funds in unserved areas.
In sum, Tilson's report suggests that a lack of state capacity for administering broadband grants seriously risks needless delay and added costs to President Biden's broadband programs. Added costs and delay will reduce the effectiveness of funds Congress appropriated for closing the digital divide, possibly increasing the perceived need for future programs of similar size and scope.
And these added costs and delay
highlight the risks inherent in Congress's decision to involve multiple layers
of government in disbursing broadband funds. For example, the Infrastructure Bill
requires NTIA to evaluate applications from state and territorial governments, which
if approved, will then establish their own grant programs that review
applications from broadband providers. There is another layer of complexity
too—NTIA will administer the Infrastructure Bill funds while the Department of
Treasury will administer the American Rescue Act funds. A simpler model—like
having the FCC or NTIA administer grant programs to which broadband providers
apply directly—could have reduced the risks that Tilson's report highlights.
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