A bipartisan coalition of lawmakers continues to make slow but steady progress on legislation that would make federal broadband grants tax exempt, providing significant relief for big and small companies alike trying to bridge America’s stubborn digital divide.

U.S. Representatives Jimmy Panetta (D-CA) and Mike Kelly (R-PA) and Senators Mark Warner (D-VA) and Jerry Moran (R-KS) recently reintroduced the Broadband Grant Tax Treatment Act (BGTTA) in both the House and Senate. The bill would amend IRS code to ensure that funding for broadband deployment from the Infrastructure Investment and Jobs Act (IIJA) and the American Rescue Plan Act (ARPA) will not be considered taxable income.

“We have made significant strides to ensure that access to high-speed internet is available to more Americans than ever,” Senator Warner said in a statement. “But taxing broadband investment awards diminishes our efforts. This legislation ensures that individuals and businesses are able to reap the benefits of every dollar set aside for broadband expansion and deployment so that we can accomplish our goal of bringing reliable broadband to every corner of Virginia.”

The exemptions included in the bill would also apply retroactively to any qualified grant amounts received in 2021 and 2022.

Residents of East Carroll Parish are “cautiously celebrating” the decision by Louisiana’s Office of Broadband Development and Connectivity to uphold a $4 million GUMBO grant to bring fiber-to-the-home (FTTH) Internet service to over 2,500 households in one of the most poorly connected parts of the state.

As we reported last month, the grant had been challenged by the regional monopoly cable provider Sparklight after the state had awarded the grant to Conexon. The challenge, which claimed the cable company already serves 2,856 homes in the region, brought the project to a grinding halt on the same day residents were set to launch a sign-up-for-service event.

News that the challenge was rejected brought a sigh of relief to members of Delta Interfaith, a coalition of congregations and community-based organizations in the Louisiana Delta pushing for better broadband. Coalition members had formed an Internet task force during the Covid-19 crisis as families struggled to get access to reliable broadband.

The community and elected officials were elated when Conexon, an independent rural Internet provider, was intially awarded the grant in July – only to be frustrated when they learned of Sparklight’s challenge. Concerned that Sparklight (formerly known as Cable One) was simply gaming the state’s grant challenge process in an effort to stave off competition, community members initiated a letter-writing campaign to bring light to the challenge and pressure state officials to resolve the challenge as soon as possible.

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Sparklight 'Failed to Carry Its Burden of Proof'

Welcome to another installment of In Our View, where from time to time, we use this space to share our thoughts on recent events playing out across the digital landscape and take the opportunity to draw attention to important but neglected broadband-related issues.

As its ongoing work to revamp the agency’s notoriously inaccurate broadband coverage maps continues, the Federal Communications Commission (FCC) announced last week the opening of a window for states, local and Tribal governments, service providers, and other entities to challenge the service data submitted by providers over the summer.

At the end of June, as FCC chairwoman Jessica Ronsenworcel noted, the FCC “opened the first ever window to collect information from broadband providers in every state and territory about precisely where they provide broadband services.” 

The key word here is “precisely” because the truth is: no one really knows precisely where broadband is, or is not, available. And with tens of billions of dollars in federal funding being spent to deploy high-speed Internet infrastructure, accurate mapping data is essential for targeting where those funds would be best allocated in each state and U.S. territory.

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Historically, the FCC relied on self-reported submissions of Internet service providers (ISPs) for information on which locations they serve and what speeds are available at those addresses. However, in practice, that meant the FCC maps could declare an entire census block to be “served” by a broadband provider if that provider claimed the ability to serve just one home in the entire block; thereby overcounting how many households have access to broadband.

The National Telecommunications and Information Administration (NTIA) announced earlier this week that Louisiana will be the first state in the nation to receive federal grant planning funds to help states prepare for the deployment of high-speed Internet infrastructure and digital skills training under the Biden Administration’s “Internet for All” initiative.

Enabled by last year's passage of the Infrastructure Investment and Jobs Act (IIJA), the $2.9 million heading to the Pelican State is from the Broadband Equity Access and Deployment (BEAD) program and the Digital Equity Act (DEA) – a development Commerce Secretary Gina Raimondo said was a signal that “the Internet for All initiative is on track and on schedule.”

Over the coming weeks, every state and territory will have funding in hand as they begin to build grant-making capacity, assess their unique needs, and engage with diverse stakeholders to make sure that no one is left behind. My thanks go to Governor Edwards and his team; Louisiana was among the first to sign onto Internet for All and to apply for funding, and I know they’re ready to get to work for the people of Louisiana.  

According to NTIA’s press announcement, $2 million of the planning funds being allocated to Louisiana come from the BEAD program and will help the state:

Louisiana’s broadband deployment grant program, GUMBO (Granting Unserved Municipalities Broadband Opportunities), was announced with great fanfare by Gov. John Bel Edwards and several state lawmakers when earlier this summer they visited Lake Providence in East Carroll Parish, the first community in the state to be the beneficiaries of the $130 million grant program.

Broadband-hungry residents and businesses were licking their chops at the prospect of finally getting access to reliable high-speed Internet service in an area that had long been underserved. But what’s leaving a bad taste in the mouths of East Carroll Parish residents is an eleventh-hour challenge to the grant award by the regional cable company.

Conexon was awarded a $4 million grant to bring fiber-to-the-home (FTTH) service to over 2,500 households in the rural northeast part of the state. But the monopoly cable provider who serves the area – Sparklight (formerly known as Cable One) – filed a challenge to the grant claiming the cable company already serves 2,856 homes there, even though, as noted by The Advocate, that is nearly 1,000 more homes than what U.S. Census data reports in the project area.

The challenge has brought the project to a grinding halt on the day network construction was slated to begin. The delay has community residents and some state lawmakers frustrated as the state’s Division of Administration tries to figure out if the challenge has any real merit.

As reported by The Advocate:

Although disappointing for advocates of local Internet choice weary of monopoly providers working to stifle competition, what we are seeing coming out of Montana’s state broadband grant program, Connect MT, shouldn’t be all that surprising.

Last week we learned that the state’s Department of Administration had recommended that nearly half of the Connect MT funding – $126 million – be awarded to Charter Communications, which has been aggressively lobbying Montana legislators (and funding campaigns in opposition to community broadband proposals in other states).

It did not go unnoticed by Montana Free Press deputy editor Eric Dietrich who recently reported that the recommended award to Charter “has plowed into rocky ground as (the state) considers a list of recommended projects this month.”

‘Not Perfect by Any Means’

The story raises questions about the state’s ranking system for proposed projects and notes that the lion’s share of grant money being recommended for Charter “has drawn the ire of smaller, Montana-based companies that want more support for their own networks.”

In hearings this month, Department of Administration Director Misty Ann Giles, the committee’s vice-chair, described the $258 million program as a learning experience for the state government, which hasn’t previously managed a large broadband program. The scoring system the department used to rank applications, she said at an Aug. 2 meeting, ‘is not perfect by any means.’

‘This is a first-in-kind program for the state of Montana, so there’s definitely some lessons learned,’ Giles said.

Giles and committee chair Sen. Jason Ellsworth, R-Hamilton, have also said the state will have the chance to fine-tune its awards process and fund additional projects as it works through additional federal broadband money it expects to receive through the Infrastructure Investment and Jobs Act.

After passage of the American Rescue Plan Act, the Republican-controlled Montana Legislature established advisory committees to make recommendations to the governor about how the state’s Rescue Plan funds should be spent on infrastructure, including broadband.