As communities across the Commonwealth of Massachusetts are at various planning stages in laying the groundwork to build their own municipal broadband networks, a rural Bay State town about 50 miles west of Boston has moved past the planning phase and is now offering municipal fiber-to-the-home (FTTH) service.

In Sterling (est. pop. 8,000) – the town that lays claim to Mary Sawyer Tyler, said to have inspired the “Mary Had a Little Lamb” poem – the town’s municipal utility is building out its aptly named Local Area Municipal Broadband (LAMB) network.

The project was initiated more than five years ago as a new division within the century-old Sterling Municipal Light Department (SMLD). As one of about 40 of the state’s 351 towns and cities with its own municipal electric utility, SMLD was awarded a $150,000 state grant to help finance the construction of a 23-mile regional I-Net ring in 2020. A year later, LAMB lit up its first residential customer in April of 2021.

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Following an incremental approach, earlier this year, the LAMB added its 50th subscriber as construction crews are on track to build out a town-wide fiber network by the end of 2024.

Connecting with Nearby Towns

Like other communities across the nation with an established municipal utility, from a design and engineering standpoint, it was a relatively easy leap into broadband for SMLD, which currently supplies electricity to more than 3,700 residential, commercial and municipal customers.

Along the shores of Lake Huron and across three rural counties in Michigan’s Thumb region, an electric cooperative is putting its thumb on the scale in favor of bringing fiber-to-the-home Internet service to its members.

Nearly 85 years after first delivering electricity to the region, Thumb Electric Cooperative (TEC) General Manager Dallas Braun announced the co-op had “started to lay the groundwork for a similar mission.”

“The mission,” he wrote in a recent edition of Michigan Country Lines, “is to provide much-needed fiber Internet service to those same sparsely populated areas by building a projected $80 million fiber network infrastructure that will be the superhighway of the Internet for future generations.”

The mandate came from members who saw ubiquitous access to high-speed Internet connectivity as a necessity of modern life much like the region’s rural farmers in the 1930s pined for electricity as they saw city residents enjoy a higher standard of electrified living.

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It led to the creation of TEC Fiber – a new subsidiary of the TEC which currently serves 12,300 residents and businesses in Huron, Sanilac, and Tuscola Counties.

Foray into Broadband with an Air Advantage

The USDA’s ReConnect program has disbursed more than $1.5 billion since its inception in December 2018. On the whole, the USDA seems to have done a better job than the FCC of leading to new broadband infrastructure which is fast, affordable, and locally controlled. Much of the money it has given out has gone to community-driven solutions, with Tribes, electric and telephone cooperatives, and local governments applying for and winning awards. The program has also seen partnerships between counties and other public as well as private entities. 

But there’s a lot to like about the newest round of funding, totaling $1.2 billion more (representing a full 80 percent of all money given out so far). The application process for Round 3 began at the end of November, with applications due by February 22, 2022.

Announced at the end of October, the new scoring metric represents a significant step in the right direction, increasing speed definitions on both sides of the application. But there are other things to like here as well. 

Snapshot

Michigan broadband package repeals law prohibiting state grants from going to government entities

Montana Legislature duplicates federal limitations against schools and library self-constructing networks

U.S. House Republicans bill would give USDA authority over rural broadband, in place of FCC 

The State Scene 

Michigan

Michigan Gov. Gretchen Whitmer issued an executive directive on Wednesday establishing the Michigan High-Speed Internet (MIHI) Office, a new state office tasked with developing a strategy to make high-speed Internet more accessible to Michiganders. 

Gov. Whitmer has argued that more than $2.5 billion in potential economic benefit is left unrealized each year due to a lack of Internet access across the state. MIHI will be housed inside the state’s Department of Labor and Economic Opportunity (LEO). Speaking of the new office, LEO Acting Director Susan Corbin said, “We need to make major investments to support digital inclusion and this office will be focused on leveraging every dollar available through the American Recovery Plan and other federal programs,” reports WILX.

Michigan lawmakers are moving to answer Corbin’s call and recently proposed a $400 million one-time allocation of incoming federal relief funds to the newly created MIHI to work toward expanding access to broadband. With the funds, LEO would be tasked with maintaining a statewide broadband grant program, the Connecting Michigan Communities Broadband Grant. 

In a part of the Prairie State referred to as “Little Egypt,” a small county in southeastern Illinois recently received a big infusion of federal funds to expand its broadband network into neighboring rural counties. 

In October of 2020, the USDA announced that the Hamilton County Telephone Cooperative was awarded a $20 million ReConnect grant and a $20 million ReConnect loan to bring broadband to over 19,000 residents, 462 businesses, 347 farms, 16 educational facilities, three post offices and four fire stations in Saline, Williamson, Franklin and White counties.

The $40 million in total Hamilton County received was a portion of the $600 million Congress appropriated to the USDA in 2018 to expand broadband infrastructure and services in rural America. In April of 2020, the USDA announced it had received 172 applications worth $1.57 billion in Round Two ReConnect requests. 

The funds awarded to Hamilton County in the fall came on top of the $3.4 million from the state-wide Connect Illinois program and ReConnect funds the co-op received in February of 2020 to build out its Fiber-To-The-Premises (FTTP) network to connect more than 600 homes in the rural county with a population just over 8,000 residents.

Decades of Service

Last fall, we reported on the large number of community-owned broadband networks among the applicants for the first round of the U.S. Department of Agriculture’s (USDA’s) ReConnect broadband program, which awards grants and loans to expand rural connectivity.

Since then, the USDA has distributed more than $620 million to 70 providers in 31 states as part of ReConnect round one. Just over half of the awardees are community networks, including rural cooperatives, local governments, community agencies, and a tribal provider. The other ReConnect awardees are locally owned providers. Almost all grant and loan recipients plan to build high-quality fiber networks with the funds.

While the impact will be limited by the relatively modest size of the program and restrictive eligibility requirements, the ReConnect awards will nevertheless lead to improved economic opportunity and quality of life in rural areas. These investments will enable more rural Americans to take advantage of precision agriculture, online education, and telehealth visits — services that are now more important than ever as the nation finds itself in the grips of a pandemic.

Co-ops, Munis Win Big

Approximately 30 rural telephone and electric cooperatives in 16 different states are taking home ReConnect grants and loans from the first round of funding. Co-op awards include a nearly $19 million grant for Alaska-based Cordova Telecom Cooperative, a $28 million grant and loan for Central Virginia Electric Cooperative, and a $2.73 million grant for Emery Telecom for projects in Colorado and Montana.

Like most other aspects of life, the ongoing pandemic has disrupted the federal government’s plans to disburse grants, loans, and subsidies for the construction of rural broadband networks. But unlike the sporting events and concerts that can be put on an indefinite hold, these funds are now needed more than ever by the Internet access providers trying to connect rural households during a time when everything has moved online. Federal agencies, like the Federal Communications Commission (FCC) and the US Department of Agriculture (USDA), must find ways to manage the challenges caused by the spread of the novel coronavirus and to leverage their funds to support essential networks for families stuck at home.

These agencies’ main rural broadband programs — the FCC’s Rural Digital Opportunity Fund (RDOF) and USDA’s ReConnect — are at different stages, both in their funding cycles and in their response to the Covid-19 outbreak. The pandemic has already led to changes at the USDA, which has extended the ReConnect application deadline and is set to receive additional funds from Congress. Meanwhile, the FCC has yet to alter the upcoming RDOF subsidy auction, but it could speed up the process to address the current crisis, which threatens to linger through the summer.

While more must be done to address the many digital divides exacerbated by the pandemic, federal agencies should at least use existing programs to their full advantage to connect rural Americans during this unprecedented time.

ReConnect Extends and Expands

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Earlier today, the U.S. Department of Agriculture (USDA) announced that it is extending the ReConnect broadband program round two deadline to March 31, 2020. The agency will distribute $550 million this year in grants and loans to expand connectivity in rural America. Previously, applications were due by March 16 to be considered for the funding.

In a USDA press release, Deputy Under Secretary Bette Brand said:

By extending the ReConnect Program application deadline, we are helping even more qualified organizations access the essential funding to make high-speed broadband connectivity a reality for rural communities across America.

Round and Round

Congress approved the initial $600 million for the first phase of the USDA's ReConnect program back in 2018. In 2019, the agency accepted round one applications for projects in underserved rural areas that haven't received goverment broadband funding before. Eligible entities included small Internet Service Providers (ISPs), rural electric and telephone cooperatives, local governments and tribal networks.

So far, USDA has announced 70 grant and loan recipients across 31 states in ReConnect round one. We’ve written about a number of these awardees including, recently, Central Virginia Electric Cooperative, the Town of Arrowsic in Maine, and Alaska-based Cordova Telecom Cooperative.

Round two of the ReConnect program will distribute an additional $550 million, with awards to be announced later in 2020.

ReConnect’s Disconnect

In two letters sent at the end of February, Oregon Senators Jeff Merkley and Ron Wyden urged the U.S. Department of Agriculture (USDA) to reconsider certain aspects of the agency’s ReConnect broadband grant and loan program. The senators’ letters, addressed to USDA Secretary Sonny Perdue, called on the agency to address, “administrative hurdles and eligibility problems within the ReConnect Program that have put critical broadband infrastructure assistance out of reach for Oregonians and communities across America.”

The USDA, which is currently accepting applications for the second round of ReConnect funding, has awarded more than $600 million in grants and loans since launching the program in 2019.

“A High-stakes Gamble”

Merkley and Wyden’s first letter [pdf], joined by Oregon Representatives Suzanne Bonamici, Peter DeFazio, and Kurt Schrader, raised lingering problems with the USDA’s determination of eligible areas and the application process for the program.

The letter reads:

We heard several concerns from our constituents in Oregon that the initial design of the ReConnect Program limited accessibility for local Internet service providers (ISPs) due to both administrative issues and eligibility restrictions. While changes have been made to improve the program, we continue to hear from many Oregonians that several major issues unfortunately remain.

In particular, the Oregon officials identified as barriers the complicated and costly application process as well as an inaccurate and unclear designation of underserved areas. “Many local ISPs feel as if [applying] is more akin to a high-stakes gamble rather than soliciting funding for a fiber-to-the-premises project,” they explained.

Additionally, the lawmakers noted that the ReConnect program’s scoring criteria can prioritize less rural, non-tribal areas, writing, “If this grant focuses on bringing broadband to rural and unserved America, the evaluation criteria seem to contradict the program’s mission.”

Satellite Subsidies Limit Opportunity

Central Virginia Electric Cooperative (CVEC), has been working on their plan to deploy Fiber-to-the Home (FTTH) to members and surrounding premises since 2017. The rural cooperative received a financial boost when they recently received a grant and loan award from the USDA's ReConnect Program.

Welcome Funding for Fiber 

With $28 million - part loan and part grant - CVEC plans to fund the first three years of their project. The USDA funding will allow CVEC to connect more than 17,000 households, six health care centers, 15 educational facilities, and 15 other community facilities. When the entire five-year plan is complete, approximately 37,000 premises will have access to FTTH. 

In Buckingham County, CVEC officials announced the award to about 200 people, including local resident Virginia Jackson. She and her family rely on their mobile phones' hotspots for Internet access, which is unreliable and can be expensive. She and her husband were interested in the project and how it would improve connectivity for them and left "excited to see what the project brings to our community."

Early in the planning process, CVEC sought funding from local governments where they plan to deploy infrastructure. They did obtain support, but still sought grants and loans elsewhere to help pay for construction of the project, which they estimated to cost between $110 and $120 million. CVEC has received grants from the Virginia Telecommunications Initiative (VATI), FCC Connect American Fund, Tobacco Region Revitalization Commission (TRRC), and a loan from the Rural Utility Service (RUS) for smart grid upgrades.