Casey Lide

The US Treasury Department has released the final version of important compliance guidance applicable to broadband projects funded through the State and Local Fiscal Recovery Fund (SLFRF) or Capital Project Fund (CPF) awards.

Broadband partnerships have emerged as an attractive option for deployment in many areas of the country. However, in order to be successful in developing a mutually beneficial Network Operating Agreement (NOA), the parties should keep the big-picture goals of the project in mind throughout the negotiations. A successful NOA will typically address the following ten core issues:

With tens of billions of dollars being made available for rural broadband infrastructure projects, electric utilities – including rural electric cooperatives, publicly owned power companies, and investor-owned utilities – stand ready to play a crucial role in bringing broadband to unserved and underserved areas of the US Easement issues are a significant concern for many of them. Utilities have easement agreements with private property owners that allow the utility to install poles and run wires across a strip of property.

Broadband grants awarded under programs established by the American Rescue Plan Act (ARPA) and the Infrastructure Investment and Jobs Act (IIJA) could be subject to federal corporate income tax, effectively requiring corporate recipients of grant funds to return 21 percent of it to the federal government. While the IRS has in the past declared a “safe harbor” from taxation for certain broadband grants (specifically, BTOP and BIP grants, in 2010), doing so now could be more challenging due to statutory changes adopted as part of the 2017 Tax Cuts and Jobs Act.

States, local governments, service providers and potential partners should be aware of the Coronavirus Capital Projects Fund (CPF), another significant broadband infrastructure funding opportunity that seems to have been overshadowed by recent programs like those included in the Infrastructure Investment and Jobs Act. While States await rules and eligibility determinations for the Infrastructure Act funds, CPF funding may be available in the meantime. Moreover, CPF funding might be suitable for projects that may not otherwise be eligible for funding under the Infrastructure Act.

The United States must act aggressively to meet two core broadband challenges. One is to ensure that all Americans have affordable access to the Internet at levels sufficient to enable them to participate fully in modern life. The other is to ensure that all of America’s communities obtain the advanced communications capabilities they will need to survive and thrive in the increasingly competitive global economy.