Treasury Doles Out $740 Million In ARPA Funds To California, Pennsylvania

California State seal

The U.S. Treasury Department recently awarded more than $740 million in new American Recovery Plan Act (ARPA) funding to the states of California and Pennsylvania, providing a major boon to both states’ efforts to expand access to affordable broadband.

The Treasury awarded $540.2 million for high-speed Internet expansion projects in California under the American Rescue Plan’s Capital Projects Fund (CPF). According to the announcement, the funds will be used to connect 127,000 homes and businesses across California as part of the state’s ongoing “California Comeback Plan.

As part of that effort, California leaders say they’ll spend $7 billion on expanding broadband access over the next three years, with $4 billion of that to be used for constructing a statewide middle-mile, open access fiber network the state hopes will boost broadband competition and drive down broadband access costs statewide.

To manage federal grant funds, California created its Last Mile Broadband Expansion grant program, which was designed to provide Internet access to areas of the state currently lacking access to reliable, affordable broadband at the FCC’s increasingly dated definition of 25 megabits per second (Mbps) downstream, 3 Mbps upstream.

“The pandemic upended life as we knew it and exposed the stark inequity in access to affordable and reliable high-speed internet in communities across the country, including rural, Tribal, and other underrepresented communities,” said Deputy Secretary of the Treasury Wally Adeyemo.

“This funding is a key piece of the Biden-Harris Administration’s historic investments to increase access to high-speed internet for millions of Americans and provide more opportunities to fully participate and compete in the 21st century economy,” Adeyemo added.  

In a separate announcement, the Treasury Department stated it would also be awarding $200 million for high-speed Internet expansion projects across Pennsylvania. Those funds will be dispersed via Pennsylvania’s Broadband Infrastructure Program, with a goal of shoring up access to affordable broadband to 127,000 homes and businesses statewide.

Pennsylvania state seal

Pennsylvania is one of 17 states that has passed telecom monopoly supported state legislation restricting community broadband. State law currently prohibits municipalities from providing broadband services to the public for a fee unless such services are not provided by the regional telecom monopoly, or delivered within 14 months of a service request.

There’s an ongoing debate over whether such unpopular and anti-competitive state restrictions will delay or imperil an historic round of broadband subsidies made possible by both ARPA and the Infrastructure Investment and Jobs Act (IIJA).

All told, ARPA and the CPF are expected to dole out $10 billion in broadband grants to states, territories, and Tribal governments to help fund “critical capital projects that enable work, education, and health monitoring in response to the public health emergency.” Another $42.5 billion in additional broadband funding is currently coming down the pipeline courtesy of the IIJA.