Bringing Online Opportunities to Texans With Broadband—And Federal Funding

Benton Institute for Broadband & Society

Thursday, February 9, 2023

Digital Beat

Bringing Online Opportunities to Texans With Broadband—And Federal Funding

"The future of Texas is online."—Governor Greg Abbott (R-TX)

While expanding broadband access throughout Texas is a priority for Governor Greg Abbott (R-TX), part of his More Prosperous Texas initiative, the governor's record on connectivity is mixed. Texas faces two simultaneous challenges. First, there remain barriers to access which are particularly prevalent in rural areas of the state. Second, even where broadband is available, there remains a substantial portion of Texans who have not adopted or subscribed to broadband in their homes.

The largest broadband providers in Texas are generally historic corporations that continue to rely on legacy networks, limiting the quality of service offered. Among the top 10 providers in the state by household coverage, only AT&T and Frontier provide fiber to a meaningful share (approximately 50 percent of the households they cover) of their networks. Others rely on DOCSIS 3+ and legacy technology, which may meet current government speed standards but are not future-proof. Similarly, there are 4.4 million households in Texas that are served by only a single internet provider. This lack of competition contributes to poor quality internet and service affordability.

Digital Divide in Texas

As of 2022, almost 2.8 million Texas households and 7 million people lack broadband access, either because the infrastructure didn't reach their homes or because they weren't subscribed to a service. In 2021, the Governor’s Broadband Development Council estimated that approximately 96.78 percent of households in Texas have access to broadband speeds at 25/3 megabits per second (Mbps). However, at least 286,908 households remain unserved at the minimum speed considered to be broadband. Approximately 246,997 of those households are in rural Texas. This means an estimated 692,511 rural Texans cannot access broadband at home, compared to over 100,000 urban Texans who lack broadband access. Rural Texans, therefore, represent roughly 85 percent of all Texans who cannot access broadband.

Counties in north-central Texas generally have universal access to networks providing 25/3 internet service. Counties extending from that part of the state down through Central Texas to the Rio Grande Valley also have widespread broadband access. However, away from this track down the middle of the state, access is much more limited in other counties.

Four of the five least-connected cities in the country are in Texas, according to a 2019 analysis of the National Digital Inclusion Alliance. Three of those — Pharr, Brownsville and Harlingen—are in the Rio Grande Valley.

More than 20 percent of Texans live in rural areas, with some regions being more than 50 percent rural. These regions have by definition a very low population density, making broadband deployment considerably costlier on a per-household basis. Higher costs inevitably hinder broadband expansion and directly contribute to the digital divide. in Texas, where 63 percent of the population lives in suburban areas, household density is a key driver of the divide. Texas regions with lower suburban household density are more vulnerable to this divide.

The median household annual income in Texas is $69,000 a year. However, half of the state's economic regions have a median household income of less than $55,000. For those families, an internet bill of $70 a month can be unaffordable. Similarly, while the median age in Texas is relatively young at just over 34 years, a sizable subset is 65 years old or older. Regions with a larger share of older populations are more vulnerable to the digital divide.

Governor’s Broadband Development Council

The Texas Legislature established the Governor’s Broadband Development Council in 2019 in order to study and identify ways to provide internet access to underserved areas of Texas. The legislature charged the council to:

  • Research the progress of broadband development in unserved areas;
  • Identify barriers to residential and commercial broadband deployment in unserved areas;
  • Study technology-neutral solutions to overcome those barriers; and
  • Analyze how statewide access to broadband would benefit: (A) economic development; (B) the delivery of educational opportunities in higher education and public education; (C) state and local law enforcement; (D) state emergency preparedness; and (E) the delivery of health care services, including telemedicine and telehealth.

The council, appointed by the governor, is composed of representatives from internet service provider industry associations; the health information technology industry; advocates for elderly persons; nonprofit organizations working to expand broadband to rural, unserved areas and to improve broadband adoption and digital literacy; an agricultural advocacy organization; a hospital advocacy organization; a medical advocacy organization; local and county officials; public and higher education; libraries; and electric cooperatives.

In its 2020 Texas Report, the council recommended that the Texas Legislature:

  • Create a state broadband plan;
  • Establish a state broadband office; and
  • Develop a state broadband funding program to incentivize deployment in unserved areas.

The council also warned that the Texas Universal Service Fund surcharge of 3.3 percent of intrastate taxable telecommunications receipts was no longer sufficient to fund its monthly obligations. 

The council followed up in a 2021 report, making ten recommendations:

  1. Through the state broadband plan, Texas should plan for and invest in speeds greater than the Federal Communications Commission minimum of 25/3.  Planning to attain ubiquitous broadband access at a speed largely considered inadequate is short-sighted.
  2. Define what it means to be “underserved”. While over 96 percent of Texans are considered served at 25/3 (the current FCC definition of broadband), many Texans can still be considered underserved. The state should award dollars to eligible unserved areas first. Dollars may need to be awarded to underserved areas in the future.
  3. A study of broadband demand at community, regional, and statewide levels. In order to set appropriate state goals for deployment, speed, and adoption, it is important to understand the demand for broadband at community, regional, and statewide levels.
  4. Invest strategically in middle-mile and last-mile infrastructure. Strategic infrastructure investments can help lower costs, improve round-trip time of traffic, and reduce latency for end users of last-mile infrastructure. Middle mile refers to the network connection between the last mile and the greater internet. Carrier-neutral internet exchange points are a particularly good example of a middle-mile infrastructure investment that can benefit rural areas. Last-mile infrastructure remains a challenge across the state, particularly in sparsely populated areas, highlighting the need for strategic investment.
  5. Fund digital literacy training programs. Beyond just having a broadband subscription, users need to have a range of digital skills to be active and engaged participants in digital spaces. Jobs across the United States increasingly require digital literacy skills. This is not limited to workers in the information technology field or those with college degrees; even entry-level workers in agriculture, healthcare, and hospitality are now required to effectively use technology to do their jobs.
  6. Fund cybersecurity awareness and internet safety awareness campaigns.
  7. Allocate a portion of the state’s American Rescue Plan Act allotment, Coronavirus Capital Projects Fund dollars, and upcoming federal broadband infrastructure/digital equity dollars toward meaningful broadband projects, which include public-private partnerships, middle-mile and last-mile investments, digital literacy training programs, and cybersecurity awareness.
  8. A multi-sector statewide study on the costs associated with the lack of broadband. 
  9. A study on the existence of any specific regulatory barriers general law cities may be facing when addressing the digital divide in their communities. Home rule cities and general law cities may be operating under a separate set of rules when it comes to public-private partnership opportunities and other connectivity initiatives. Identifying and addressing these barriers, if they exist, may help our smaller communities become better connected.
  10. Partner with local communities, community anchor institutions, and the private sector to promote digital inclusion initiatives that help to advance broadband access, adoption, and use in Texas.

Texas Broadband Legislation 

In June 2021, the Texas Legislature acted on the council's recommendations:

HB5 created the Texas Broadband Development Office under the control of the state comptroller. The office is to:

  1. serve as a resource for information regarding broadband service and digital connectivity in the state;
  2. engage in outreach to communities regarding the expansion, adoption, affordability, and use of broadband service and the programs administered by the office; 
  3. serve as an information clearinghouse in relation to: federal programs providing assistance to local entities with respect to broadband service; and addressing barriers to digital connectivity;
  4. participate in proceedings at the Federal Communications Commission; 
  5. create and maintain a state broadband map;
  6. establish a program to award grants, low-interest loans, and other financial incentives to applicants for the purpose of expanding access to and adoption of broadband service; and
  7. prepare and update a state broadband plan that establishes long-term goals for greater access to and adoption, affordability, and use of broadband service in Texas.

The law also created an advisory board for the Broadband Development Office to provide guidance regarding the expansion of adoption, affordability, and use of broadband service and the programs administered by the office. 

HB 1505 established a modernized pole attachment regime. The law applies to Texas' electric cooperatives and promotes consistency, transparency, and fairness in the deployment of broadband service. The goal is to ensure consistency with FCC rules and regulations for investor‑owned utilities through which a broadband provider may apply for and receive access to a pole owned and controlled by an electric cooperative. The law established the Texas Broadband Pole Replacement Program to speed the deployment of broadband services to individuals in rural areas by reimbursing a portion of eligible pole replacement costs incurred by pole owners or providers of qualifying broadband services. The bill creates the broadband pole replacement fund to be used solely to support the program and requires the comptroller of public accounts to make a one‑time transfer to the fund from money received by the state from the federal government from the Coronavirus Capital Projects Fund.

SB 507 directed the Texas Department of Transportation to adopt rules to allow broadband-only providers to use state rights-of-way in the same manner that other utilities enjoy.

2022 Gubernatorial Election and the Texas Universal Service Fund

Despite the broadband legislation enacted in 2021, Gov. Abbott faced criticism when he sought reelection in 2022.

Texas has long maintained a state Universal Service Fund to subsidize network phone service in rural areas where it is harder to provide. To do so, it charges a 3.3% assessment on landline and cell calls made within the state. Providers pass these fees on to consumers. However, mirroring trends seen at the federal level, the fund has depleted as Texans make fewer voice calls and wireless companies change their billing methods, allocating more charges toward data and away from voice service. That has led to an estimated $10 million shortfall in the fund per month starting January 2021, according to providers. While the fund does not directly subsidize broadband, internet service often runs on the same phone service networks the fund does support.

The health of the Texas fund was a campaign issue in the state's gubernatorial election in 2022. Beto O'Rourke (D-TX) accused Governor Greg Abbott (R-TX) of stifling efforts to improve broadband internet access in the state's rural areas. Gov. Abbott vetoed legislation that would have helped replenish the Universal Service Fund, which supports telecommunications and internet services for more than 1 million rural Texas households. Gov. Abbott argued the bill “would have imposed a new fee on millions of Texans.”

But the bipartisan supporters of the legislation say it was badly needed to help shore up revenue for the fund. The less revenue the fund has, the less money it has to reimburse providers, making service harder to maintain and more costly to provide in rural areas of the state.

“While [House Bill 5] was important … it is a different subject entirely from universal service,” said Mark Seale, executive director of the Texas Telephone Association. The funding from House Bill 5 can support upgrades or expansions, but the Universal Service Fund maintains the current telecommunications infrastructure, Seale said.

“I think the veto was unfortunate because it provided another opportunity for the Universal Service Fund to catch up, and certainly it’s a very important issue in rural Texas,” said State Rep. John Smithee (R-Amarillo).

Texas Broadband Plan 

In June 2022, the Texas Broadband Development Office published the Texas Broadband Plan 2022. By early 2023, the office aimed to:

  • Establish a broadband-focused, federally compliant grant program,
  • Publish a broadband availability map, and
  • Manage recurring coordination and communication opportunities across stakeholder groups.

To maximize the use of available broadband funding, the plan suggests next steps including:

  • Developing program strategies and submitting materials and plans required to access federal broadband funding as well as apply for funding.
  • Designing the structure of a broadband grant program compliant with Capital Projects Fund, Broadband Equity Access and Deployment (BEAD) Program, and Digital Equity program requirements.
  • Establishing and publishing criteria for grant awards.
  • Launching and executing the first wave of grant programs.

To increase awareness of broadband opportunities, the office will:

  • Publish a list of funding programs available to organizations and individuals.
  • Distribute a recurring newsletter to inform stakeholders.
  • Promote transparency in its plans to initiate funds and implement programs through website, newsletter and periodic Board of Advisors public meetings.
  • Continue to leverage surveys and toll-free phone lines to assess the needs of unserved and underserved communities.

The office will assess needs and develop a resource center that provides information and materials to support the development of plans and applications, reports and insights, and sharing of lessons learned and best practices. Resources to be developed include toolkits and templates to aid in the development of plans and applications.

To improve coordination and partnerships, the office will:

  • Build on existing communications and outreach strategy to collaborate with key stakeholders.
  • Create a task force or advisory board with representatives from communities in need.
  • Continue to engage with state, county and municipal associations that may have a greater reach to communities through their local elected official members.
  • Continue to engage with other state agencies that regularly serve communities and can help identify and engage with them.
  • Utilize broad outreach efforts that demonstrate a targeted focus on communities throughout the state.
  • Invest further in surveys, data collection and mapping initiatives to better understand gaps in connectivity and needs.
  • Foster coordination across community colleges, technical schools, universities and organizations to develop workforce development programs.

To ensure transparency and accountability, the office will:

  • Establish procedures and a data collection process in accordance with FCC rules to challenge FCC data when made available.
  • Create, update annually and publish on the Texas Comptroller’s website a broadband availability map.
  • Develop a Grant Program Roadmap that embeds accountability, compliance and monitoring into each part of the process from program development, evaluation of applications, grant awards, ongoing monitoring and closeout.
  • Execute a technical assistance contract to facilitate low-cost technical services for local community leaders to support the development and implementation of local broadband action plans.

The office plans to establish state-level goals to measure progress against the dimensions of the digital divide: coverage, quality, affordability, devices and digital literacy. And the office will embed these goals and measures into grant programs.

Federal Broadband Programs

Texas has already been the recipient of a number of federal broadband program awards.

Last month, the U.S. Treasury approved Texas' plan to use $363.8 million in Capital Projects Fund support for broadband infrastructure. Texas is creating a competitive grant program, the Bringing Online Opportunities to Texans (BOOT) Program, to fund last mile broadband infrastructure projects in areas throughout the state. The BOOT Program will prioritize projects that serve historically socio-economically disadvantaged areas and offer affordable service options and digital literacy support. Texas estimates the Capital Projects Fund support will help connect 152,000 locations still lacking high-speed internet access in the state. The program is designed to provide internet service with speeds of 100/100 Mbps symmetrical to households and businesses upon project completion. the Broadband Development Office will oversee the program.

On December 20, 2022, the U.S. Commerce’s National Telecommunications and Information Administration (NTIA) awarded Texas over $8.1 million from the Infrastructure Investment and Jobs Act to plan for the deployment and adoption of affordable, equitable, and reliable high-speed Internet service throughout the state. Texas received $5 million for:

  • Helping close the broadband availability gap and the development of a Five-Year Action Plan;
  • Research and data collection, including initial identification of unserved locations and underserved locations; and
  • Publications, outreach, and communications support.

Texas also received $3,110,148.10 to:

  • Help close the digital equity gap and the development of a Statewide Digital Equity Plan;
  • Solicit proposals through a competitive procurement process and issue contracts to support the development of the state digital equity plan;
  • Work directly with organizations and nonprofits to reach the covered populations identified;
  • Foster partnerships by holding frequent subgrantee roundtables and other engagement activities; and
  • Establish a digital equity planning coalition comprised of potential partners around the state.

Sabine County received over $12.7 million to build out last mile, fiber broadband service to 5,254 households, 158 businesses, and 2 community anchor institutes for a total of 5,414 locations in sections of the county that are unserved.

The Kickapoo Traditional Tribe of Texas received $2,623,357 from NTIA to install fiber directly connecting 354 unserved Native American households plus businesses with qualifying broadband service at speeds of 120/20 Mbps.

NTIA's Connecting Minority Communities Pilot Program has awarded Sul Ross State University a $2.7 million grant to upgrade existing equipment, which includes 16 distance learning classrooms, teaching labs, 12 smart classrooms, auditoriums, and conference rooms. Laptops will also be available to students who demonstrate need and have no access to these items off campus. 

“The NTIA grant will allow Sul Ross State University to accomplish three goals, all of which will improve the availability and integrity of the technology resources most frequently utilized by our students,” said Chief Information Officer Jacob Fuentes. “First, significant networking and technology infrastructure improvements will be performed on our main campus.  Then, distance education and learning technology across all campus locations will be upgraded.  Finally, we will begin a pilot program to distribute laptops to students who demonstrate the need and otherwise lack access to technology when off campus.  Collaboratively, members of our faculty and staff have worked together to prepare, submit, and now receive this grant.  It is an exciting opportunity that will leverage technology resources to serve our students.” 

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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Kevin Taglang

Kevin Taglang
Executive Editor, Communications-related Headlines
Benton Institute
for Broadband & Society
1041 Ridge Rd, Unit 214
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