Capital Projects Fund Helps Link Indiana to the World

Benton Institute for Broadband & Society

Wednesday, August 31, 2022

Digital Beat

Capital Projects Fund Helps Link Indiana to the World

“We are linking Hoosiers to each other and to the world.”

—Gov. Eric J. Holcomb

Indiana understands the importance of connectivity—especially in underserved and unserved rural areas—and recognizes the need for affordable and reliable broadband for all communities. Gov. Eric Holcomb and Lieutenant Governor Suzanne Crouch have led the largest investments in broadband in the state's history. Additional resources for broadband investment became available this week as the U.S. Treasury approved the state's plan for Capital Projects Fund support for infrastructure deployment.

The Digital Divide in Indiana

Using 2018 U.S. Census Bureau’s American Community Survey data, researchers at Ball State University estimated that 42,413 Indiana households with school-aged children did not have internet access at home, which is about 6.5 percent of all Indiana households with school-aged children. They estimated that about 68,649 to 80,118 Indiana school-age children did not have internet access at home. 

Among those households with school-age children and without internet access, researchers found higher shares of single-parent households (i.e., 57% of households who do not have access to internet are single-parent households), parents not in the labor force (18.9%), low-income households (35.2%), non-English speakers at home (22.4%), and households living in rental property (49.3%).

Single-parent households with school-age children were 44.4 percent more likely not to have access to the internet. Households with parents not in the labor force were 54.1 percent more likely not to have internet. Low-income households (with income <$25K/year) had lower odds of having internet access relative to other income groups. Finally, households who did not speak English at home were 66.1 percent less likely to have internet access. Importantly, the researchers also observed widespread geographical differences in access across the state. Rural locations experienced much lower rates of internet penetration. This means that students without internet access are most likely concentrated in rural Indiana. The results suggested geographic concentration in both rural and urban places in the state.

Taking Indiana to Next Level

Indiana Lieutenant Governor Suzanne Crouch created the Office of Broadband Opportunities in 2018 to identify needs and eliminate roadblocks to broadband deployment and digital literacy in the state. The office is meant to be a one-stop-shop for all things broadband in Indiana.

The state legislature created the Broadband Ready Communities Program in 2020 as a tool to encourage broadband development throughout Indiana by serving as an information resource and certifying local communities as being broadband ready. The certification is meant to signal to the telecommunication industry that a community has taken steps to reduce barriers to broadband infrastructure investment. The Indiana Broadband Office certifies communities that establish a procedure to review applications and issue permits for broadband projects. Procedures must include:

  • A single point of contact for all matters related to a project.
  • A guarantee that all applications related to a project will be reviewed and either approved or rejected within ten (10) business days after an application is submitted.
  • An assurance that all inspections, including necessary approvals, related to a project will occur in a timely and expeditious manner.
  • An authorization for all forms, applications, and documentation related to a project to be filed and signed by electronic means.

The procedure may not:

  • Require an applicant to designate a final contractor to complete a project.
  • Impose a fee to review an application or issue a permit for a project.
  • Impose a seasonal moratorium on the issuance of permits for a project.
  • Discriminate among communications service providers or utilities, including granting access to public rights-of-way, infrastructure and poles, river and bridge crossings, and any other physical assets owned or controlled by the community.

In 2020, the Office of Broadband Opportunities published Indiana Statewide Broadband Strategic Plan, showcasing a number of initiatives to promote the benefits of expanding broadband access. The plan's four strategic areas were: 1) engaging the business community, bridging the digital divide, 3) enhancing community development and quality of place, and 4) attracting broadband talent.

The statewide broadband strategy built on Governor Eric Holcomb's NextLevel Plan, which recognized broadband's role in five pillars: the economy, infrastructure, workforce and dedication, public health, and good government. Included in the infrastructure pillar was initially $100 million for the Next Level Connections program, housed in the state's Office of Community and Rural Affairs. The Next Level Connections Broadband Grant Program is designed to provide funds for the deployment of broadband infrastructure to provide eligible broadband service to unserved end users, which include households, businesses and community anchor institutions, such as schools and health clinics, across Indiana.

To be eligible to participate in Next Level Connections, Indiana broadband providers must serve at least 100 subscribers for at least three years. Next Level Connections gives funding priority to projects that provide symmetrical speeds of 100/100 or more to as many locations as possible. Also, projects that include providing 1 gig connections to schools and/or rural health facilities will receive priority of funding, if part of an eligible project. 

Eligible broadband project expenses are terrestrial capital expenses directly related to a qualified broadband project, including design, engineering, permitting, construction of “last mile” infrastructure expenses and validation of service expenses. The last mile is defined as the final leg connecting a broadband service provider’s network to the end-user customer’s on-premise telecommunication equipment. Middle mile expenses are eligible for grant funding only when they are necessary for the provision of the last mile services. Maintenance or operating expenses related to the project do not qualify as eligible activities.

Eligible project areas are specific addresses in Indiana that lack broadband coverage (less than actual speeds of 25 Mbps downstream); areas that lack quality, reliable access to fixed terrestrial broadband; and areas with compelling need.

In April 2022, Next Level Connections awarded $189 million for 154 broadband infrastructure expansion projects across the state. In addition to the $189 million, the 35 telecommunications providers and utility cooperatives involved in the projects contributed more than $239 million in matching funds, resulting in more than $429 million in total investment for broadband. When complete, the projects will provide broadband infrastructure to more than 52,900 homes and commercial locations in 80 counties. For example, 810 homes and 362 businesses or organizations in Cass and Fulton counties will gain broadband access with a $4 million grant to RTC Communications. In Franklin, Jefferson, Jennings, Ohio, Ripley, and Switzerland counties, 292 homes and 18 businesses or organizations will gain access through a $1.5 million grant to Southeastern Indiana REMC. 

In total, rounds one, two and three of the program have awarded $268 million for broadband infrastructure for more than 74,800 homes and commercial locations. When combined with private and local investment, over $580 million has been leveraged since 2018. Projects will have been completed in 83 of Indiana’s 92 counties through the three rounds of the awards.

On August 30, the U.S. Treasury approved Indiana's plans to use $187 million of Capital Projects Fund support for Next Level Connections. Indiana is using 92% of its total Capital Projects Fund allocation to bring high-speed internet to 50,349 locations—7.4% of the locations in the state still lacking broadband. Each of the internet service providers funded by the program will participate in the Federal Communications Commission’s Affordable Connectivity Program—a $30 per month subsidy for low-income families.

As a sub-program of Next Level Connections, the state also runs the Indiana Connectivity Program which aims to connect residents and businesses that lack access to broadband internet service with service providers and assist in the expense of extending broadband to those locations. Owners of residential and business locations unserved or underserved (access to actual speeds less than 25Mbps download and 3Mbps upload) can apply for consideration. Broadband providers then have the opportunity to review these locations and submit bids to the state on the cost of providing service to these locations. The state's Office of Community and Rural Affairs then evaluates these bids and makes awards to the providers whose bid presents the lowest cost per Mbps to the state for extension of the service. [Limits per line extension are set by Indiana Code: A per-line extension amount that cannot exceed $25,000. A per passing amount that cannot exceed $4,800.]

The second round of Indiana Connectivity Program awards was announced on July 14, 2022. The program awarded $259,697 to expand broadband to 58 addresses across 19 counties. Of these addresses, 56 are homes and two are businesses. Internet providers carrying out the projects matched over $265,011 for a total investment of $524,708. A third round of awards will be announced in October 2022.

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
Wilmette, IL 60091
headlines AT benton DOT org

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