American Rescue Plan Fuels Virginia's Universal Broadband Efforts
Tuesday, June 7, 2022
American Rescue Plan Fuels Virginia's Universal Broadband Efforts
On July 2, 2018, then-Governor Ralph Northam (D-VA) announced that the Commonwealth of Virginia should achieve functionally universal broadband coverage within 10 years. Reaching that goal would be no easy feat. At the time, Virginia was investing just $4 million a year into its broadband program and 660,000 Virginians did not have access to high-speed internet. This week, Virginia's efforts got a big boost when the U.S. Department of Treasury approved nearly $220 million to support broadband deployment projects in the Commonwealth.
Virginia’s Digital Divide
Virginia’s broadband challenges are multifaceted. In our 2020 report Broadband for America Now, we found that in rural areas of Virginia, nearly a third of households have no access to broadband. And even in urban communities where broadband was available in Virginia, it may not have been affordable. In fact, the census tracts with the lowest broadband adoption rates in the Commonwealth at the time were not in rural Virginia but in Richmond.(1)
in May 2022, Governor Glenn Youngkin (R-VA) announced the state's digital divide was even bigger than previously reported. The Virginia Department of Housing and Community Development (DHCD) analyzed data for the Virginia Broadband Availability Map that showed 234,708 locations in Virginia with internet access below 25 Mbps download 3 Mbps upload speeds (the thresholds for broadband set by the Federal Communications Commission), while more than 206,700 locations reported no service at all—for a total of 441,435 locations that are unserved.
Between 2018 and the end of 2021, Virginia's total broadband deployment investment reached over $2 billion. The 2020 Commonwealth Connect plan detailed how Virginia is working towards universal broadband through four main tracks:
1. Increased state grants to public/private partnerships to build broadband to unserved communities
2. Policy changes to accelerate universal broadband
Along with increased state funding, the Commonwealth passed legislation in 2021 aimed at bringing down the costs for building broadband, increasing competition, and helping localities raise matching funds. The 2021 laws allow Appalachian Power and Dominion Energy to provide "middle mile" fiber to unserved areas of the state with the hope of bringing down the cost of entry for broadband providers and lowering electric rates since any revenues that the utilities generate from leasing fiber to providers will go back to ratepayers. And a 2019 law allows localities to establish special service districts for the purposes of broadband expansion. Like when a neighborhood pays for its own snow removal, now a neighborhood or sub-locality can become a service district and raise its own taxes for the purposes of broadband expansion.
3. Better support and resources for local broadband planning
To help local leaders develop and execute a local plan for universal broadband, the Commonwealth Connect team developed a comprehensive toolkit for local leaders. This toolkit includes a step-by-step guide, model broadband solicitations, FAQs, and much more.
4. Convening over 100 broadband stakeholders in the Commonwealth Connect Coalition
Supporting the goal of universal broadband in Virginia is the Commonwealth Connect Coalition, a diverse coalition of more than 100 different trade associations, Fortune 500 companies, non-profits, and broadband providers. The coalition which is led by the state's chief broadband adviser, engages these diverse stakeholders to advance the state's broadband policy.
New Administration, Additional Tactics
Since taking office, Gov. Youngkin has emphasized broadband as an economic and social priority and believes every Virginian should have internet access at speeds of at least 100 Mbps download and 20 Mbps upload. In addition to more granular broadband mapping, this Spring, Virginia enacted four laws intended to address the Commonwealth's digital divide:
- Beginning in the 2022 school year and in each school year thereafter through 2025, each school board is required to submit an annual report to the Virginia Department of Education and the Virginia Department of Housing and Community Development listing each student's address that does not have broadband access.
- Virginia changed its sales and use tax exemption for amplification, transmission, and distribution equipment used to provide internet services. Starting July 1, 2022, the exemption will apply to network equipment used to provide internet service, regardless of whether the provider of such service is also a telephone common carrier or whether such network is also used to provide services other than internet services.
- The Virginia Department of Housing and Community Development will convene a stakeholder advisory group for the purpose of evaluating local and state policies, procedures, or ordinances to facilitate the expansion of high-speed broadband service and associated infrastructure in new residential and commercial development. The stakeholder advisory group will be composed of representatives from the commercial and residential land development and construction industry, local government, and high-speed broadband providers (and other stakeholders as determined by the department) and will report its findings and recommendations to the Commonwealth's Broadband Advisory Council no later than September 30, 2022. The Broadband Advisory Council is a 17-member body that advises Virginia's governor on policy and funding priorities to expedite deployment and reduce the cost of broadband access in the Commonwealth. By statute, the council is comprised of 17 members: seven legislative members, six non-legislative citizen members, and four ex officio members.
- The Department of Housing and Community Development will develop—by December 1, 2022—the Commonwealth Digital Affordability and Cost Effectiveness Plan to access federal funding under the federal Infrastructure Investment and Jobs Act. The plan will include:
- an overview of options for affordable broadband connectivity in the Commonwealth;
- recommendations on how best to leverage federal grants addressing broadband affordability;
- best practices for establishing a broadband affordability program, taking into account existing federal funds and programs; and
- recommendations for public outreach.
Enter Capital Projects Funds Support
On June 7, 2022, the U.S. Department of Treasury approved $219.8 million for Virginia to expand last-mile broadband access to an estimated 76,873 locations, approximately 28% of locations the state estimates lack access to 25/3 broadband service. The funding comes from the U.S. Department of the Treasury and the American Rescue Plan’s Coronavirus Capital Projects Fund (CPF). The CPF provides $10 billion to states, territories, freely associated states, and Tribal governments to fund critical capital projects that enable work, education, and health monitoring in response to the public health emergency. A key priority of the program is to make funding available for reliable, affordable broadband infrastructure and other digital connectivity technology projects.
With CPF support, the Virginia Department of Housing and Community Development will oversee a competitive grantmaking program, the Virginia Telecommunication Initiative (VATI). Applications for VATI support must be submitted by a unit of government (towns, cities, counties, economic and industrial development authorities, broadband or wireless authorities, planning district commissions, etc) with a private-sector provider (or providers) as a co-applicant. Eligible projects must be owned and operated by the private sector co-applicant. Publicly owned networks are eligible for the program when partnered with a private sector co-applicant, so long as the private sector applicant is serving as the customer-facing internet service provider. Public broadband authorities may apply directly for VATI funds without investment from the private sector, but Virginia has capped the available funding through state grants for such projects.
Awardees will be selected through a competitive application process. Application questions will be focused on the applicant’s broadband needs as well as information related to ready-to-construct project(s) needing financial assistance to supplement construction costs. The applicant must demonstrate a readiness to proceed with an awarded project in a timely manner by the required deadline. The state grant program required applicants to provide access to broadband speeds at or above 100 Megabits per second (Mbps) download and 20 Megabits (Mbps) upload.
VATI also prepares communities to build, utilize, and capitalize on telecommunications infrastructure with the goal of creating strong, competitive communities. In unserved localities, Virginia's broadband team serves as advisors to local governments and groups of local governments to assist them in:
- Finding partner broadband providers with whom they can develop a plan;
- Determining likely costs for a universal coverage plan; and
- Establishing and including in any planning effort those assets the community or communities may have to support such a plan.
Previously, VATI was funded by the Commonwealth budget at $50 million annually and had connected over 24,000 homes, businesses, and community anchors by mid-2021.
The current VATI application window opened on June 2; applications are due by August 25, 2022. DHCD plans to announce award winners in late December of this year.
Will Virginia Participate in the BEAD Program?
On May 18, the Department of Commerce’s National Telecommunications and Information Administration announced that 34 states and territories have formally indicated that they intend to participate Internet for All initiative, which will invest $45 billion to provide affordable, reliable broadband to everyone in America, most notably through the Broadband Equity, Access, and Deployment (BEAD) Program. Virginia has not indicated its intent to do so yet. Virginia is eligible for at least $100 million in support. Just submitting a letter of intent and a planning funds budget will unlock up to $5 million in planning funds and allow Virginia to begin creating its five-year action plan.
- United States Census Bureau, “Types of Computers and Internet Subscriptions,” American Community Survey – 2018, available at https://tinyurl.com/ACSInternetSubs2018
- Capital Projects Fund Award Fact Sheet Virginia https://home.treasury.gov/system/files/136/CPF-Award-Fact-Sheet-VA-June-...
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Kevin Taglang is the executive editor at the Benton Institute for Broadband & Society.
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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