American Rescue Plan: Broadband and the Social Safety Net
Friday, March 12, 2021
American Rescue Plan: Broadband and the Social Safety Net
You’re reading the Benton Institute for Broadband & Society’s Weekly Digest, a recap of the biggest (or most overlooked) broadband stories of the week. The digest is delivered via e-mail each Friday.
Round-Up for the Week of march 8-12, 2021
On March 11, President Joe Biden signed the American Rescue Plan, the latest effort to address the continued impact of COVID-19 on the economy, public health, state and local governments, individuals, and businesses. The new law has been touted as a vast expansion of the country’s social safety net. By some estimates, the statute will slash poverty by a third this year and potentially cut child poverty in half, with expansions of tax credits, food aid, and rental and mortgage assistance. Also in this action, Congress recognizes broadband's essential role in modern life.
Ensuring Students Have the Tools Needed to Learn Online
The new law creates the Emergency Connectivity Fund, providing $7.171 billion to reimburse schools and libraries for providing free broadband service (and connected devices) to students and patrons at their homes. The Emergency Connectivity Fund is a huge infusion into the Federal Communications Commission's E-Rate Program which, since 1996, has helped make telecommunications services more affordable for schools and libraries. The E-Rate program has traditionally funded broadband service to and within schools and libraries; the new law allows these community anchor institutions to extend service farther into the community, reaching people where they live. The law also overrides former FCC Chairman Ajit Pai's overly cramped reading of the Telecommunications Act of 1996; Congress recognizes that in the age of COVID, classrooms are virtual, online spaces, not just physical spaces.
By mid-May, the FCC must issue new E-Rate rules to implement the American Rescue Plan provisions. The FCC may set an upper limit on the amount of reimbursement for broadband service and devices, but Congress envisions both being offered to students and library patrons at no cost. Eligible devices include laptop and tablet computers. Also eligible for support are Wi-Fi hotspots, modems, and routers.
Funding for this enhanced E-Rate support will be available for at least one year after the COVID-19 emergency ends.
The FCC actually jumpstart started the process of considering how to use the E-Rate to support remote, online learning in a proceeding it launched on February 1 (WC Docket No. 21-31, if you're scoring at home). In 2020, the Schools, Health & Libraries Broadband (SHLB) Coalition (of which the Benton Institute for Broadband & Society is a member), the State of Colorado, and the State of Nevada all separately petitioned the FCC to allow E-Rate-funded services and equipment to be used off-campus to enable remote learning for the duration of the pandemic. In February, the FCC sought comment on:
- the specific equipment and services that E-Rate should support to fund off-campus access to broadband services for students, staff, and patrons who lack adequate home Internet access,
- how to ensure that applicants make cost-effective purchases, and
- how to quickly and equitably make funding available to those with the most need.
This proceeding may give the FCC sufficient public input to craft the new rules envisioned by the American Rescue Plan.
Assistance for Homeowners
Since March 2020, millions of homeowners have requested and received forbearance under the CARES Act, allowing them to temporarily pause or reduce their mortgage payments. The American Rescue Plan expands on that protection to include essential services to the home, including internet access service.
The new law includes $9.961 billion for a new Homeowner Assistance Fund at the Department of the Treasury. From the fund, Treasury will make grants to states to administer programs assisting homeowners with mortgage payments; financial assistance to reinstate a mortgage related to a period of forbearance, delinquency, or default; principal reduction; interest rate reductions; utilities and internet service; homeowners insurance, flood insurance, and mortgage insurance; and other assistance to promote housing stability for homeowners.
States must use at least 60 percent of their grants to assist homeowners earning no more than 100 percent of the greater of area median income or nationwide median income. With the remaining funds, states must prioritize socially or economically disadvantaged individuals as defined by the Small Business Act. Funding is available until September 30, 2025.
State and Local Recovery Funds
The new law provides $219.8 billion to states, territories and Tribal entities for fiscal year 2021 and will remain available until December 31, 2024. The law makes clear that funds can be used for local economic recovery purposes, including assistance to households, small businesses and nonprofits, assistance to hard-hit industries like tourism, travel, and hospitality, and water, sewer, and broadband infrastructure investment. No money is earmarked specifically for broadband. Here's how the funds are to be allocated:
- $195.3 billion for payments to the 50 states and the District of Columbia. $25.5 billion will be allocated equally among the 50 states and the District of Columbia.
- $20 billion toward payments to Tribal governments. $1 billion will be allocated equally across Tribal governments and $19 billion will be allocated in an amount determined by the Secretary of the Treasury.
- $4.5 billion for payments to Territories. Half will be dispersed equally and the other half will be allocated as an additional amount in proportion to the relative population a territory covers compared to the overall population of all territories.
Similar to the state fund, the new law provides $120.2 billion to local governments and counties for fiscal year 2021 and will remain available until December 31, 2024. The law divides the local allocation of funds into two equal tranches of payments spaced 12 months apart. The funds can be used for local economic recovery purposes, including assistance to households, small businesses and nonprofits, assistance to hard-hit industries like tourism, travel, and hospitality, and water, sewer, and broadband infrastructure investment. Here's how the funds are to be allocated:
- $60.1 billion to counties within the 50 States, the District of Columbia (which counts as a single county), the Commonwealth of Puerto Rico, Guam, the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, and American Samoa.
- $42.07 billion for metropolitan cities
- $18.03 billion to States for distribution by the State to cities with populations of less than 50,000 and counties with populations of less than 200,000 in the State.
The American Rescue Plan also includes a $10 billion Coronavirus Capital Projects Fund to help states, territories, and Tribal governments to carry out critical capital projects directly enabling work, education, and health monitoring, including remote options, in response to the pandemic. Payments will be:
- $100 million to each state,
- $100 million to Puerto Rico,
- $100 million to the District of Columbia,
- $100 million in equal shares to the Virgin Islands, Guam, American Samoa, Northern Mariana Islands, Marshall Islands, Federated States of Micronesia, and Republic of Palau, and
- $100 million to Tribal governments and Hawaii (in addition to the previous allocation as a state) with half allocated to each.
The remaining amounts will be made by the Secretary of the Treasury to the states based on population, rural area distribution, and household income.
Within 60 days, the Department of Treasury will establish a process of applying for grants to access this funding.
A Bigger Boost for Broadband on the Way?
In addition to the American Rescue Plan, House Majority Whip James Clyburn (D-SC) and Sen. Amy Klobuchar (D-MN) led the charge on the reintroduction of the Accessible, Affordable Internet for All Act. The $94 billion proposal would bring broadband service to areas where it doesn’t exist, improve speeds in places where connectivity is sluggish, and help families who are struggling to pay their monthly bills. Specifically, the bill calls for:
- $80 billion to deploy secure and resilient broadband infrastructure for communities nationwide.
- $5 billion over five years for low-interest financing of broadband deployment.
- $6 billion in additional funds for the FCC's recently established Emergency Broadband Benefit Program, which provides a $50 monthly discount on internet plans for low-income Americans anywhere in the country ($75 for consumers on Tribal lands).
- $1 billion to establish two new grant programs which will help Americans build digital skills.
- $2 billion more for the Emergency Connectivity Fund created by the American Rescue Plan (see above).
“We’re not going to grow the economy in our communities all across the country without broadband,” said Rep. Clyburn. “The investments we’re making in this, and the build-out over three to four years, makes this one of the best infrastructure efforts we can undertake today.”
The Accessible, Affordable Internet for All Act is seen as the broadband portion of a much larger infrastructure push expected now that the American Rescue Plan has been enacted. So. Watch. This. Space.
- Are you eligible for the FCC's emergency internet discount program? Here's how to find out (CNN)
- FCC’s New Broadband Subsidy Hits Sweet Spot for Lower-Income People of Color’s Internet Bill Needs (Morning Consult)
- We have to close the digital divide. That means internet access for everyone (Derrick Johnson, FCC Commissioner Geoffrey Starks)
- Cellphone inventor Martin Cooper says 5G should be focused on providing more access (C|Net)
Weekend Reads (resist tl;dr)
- Video: Taking Back Authority featuring Gigi Sohn
- The Internet Doesn’t Have to Be Awful (Anne Applebaum, Peter Pomerantsev)
- Broadband Today: Rural America’s Critical Connection (Foundation for Rural Service)
ICYMI from Benton
- National Efforts to Close the Digital Divide Require Local Empowerment (Ariel Benjamin, Erman Eruz, Danny Fuchs, and David Gilford)
- Learning Digital Literacy Is Key (Michael Copps)
- Whatever Happened to the “Magnet Cities?” (Robert Bell)
- Emergency Broadband Benefit Program: From Here to Launch in 60 Days (Kevin Taglang)
- Introducing the Emergency Broadband Benefit Program (Kevin Taglang)
Mar 17 — Open Federal Communications Commission Meeting (FCC)
Mar 19 — The FCC in Transition: An Update on Spectrum Polices Upcoming in 2021 (Keller & Heckman)
Mar 22 — 12th Annual USF Update Webinar (Kelley Drye)
Mar 22 — Public Libraries and the Pandemic: Digital Shifts and Disparities to Overcome (New America)
Mar 22 — Reimaging Section 230 (Protocol)
Mar 25 — Misinformation and Disinformation Plaguing Online Platforms (House Commerce Committee)
Mar 25 — Increasing Digital Access (Federal Reserve Bank of Richmond)
The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.
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