Traverse City Business News | Down to the Wire: Federal funding could help expand broadband in rural regions


Down to the Wire: Federal funding could help expand broadband in rural regions

Chris Varenhorst has taken some difficult phone calls from Benzie County residents who work remotely.

The Eclipse Communications, LLC owner reports workers are distressed to the point of tears, worried about losing their jobs over a lack of high-speed internet access during the COVID-19 pandemic.

The pandemic has shined a light on the dire need for broadband in rural America. More and more employees are working remotely out of necessity or because they want to work from home. But the lack of access to broadband has created disparities around health care, education and economic development in rural communities.

The $1.2 trillion Infrastructure Investment and Jobs Act and President Joe Biden’s proposed Build Back Better plan is expected to funnel money for rural broadband. The money is typically distributed via grants and other programs through the U.S. Department of Agriculture (USDA) Rural Development, National Telecommunications and Information Administration (NTIA), Federal Communications Commission and other federal agencies.

“There is a real good push forward right now to strike deeper at the root issues as to why the majority of rural America in 2022 still doesn’t have good-quality broadband service,” Varenhorst said.

USDA Rural Development is the economic development arm for rural America and offers various grant programs that make critical infrastructure investments into rural Michigan.

“Broadband funding through our ReConnect Program highlights USDA’s commitment to bridging the digital divide,” said Brandon Fewins, state director of Michigan’s USDA Rural Development. “We live in a global economy and delivering broadband to our rural communities will help give them the resources they need to drive economic development and be competitive from anywhere in the state.”

The $1.2 trillion infrastructure bill passed in November includes $65 billion to enhance broadband access in rural areas, making high-speed internet more affordable for lower-income households across the U.S. The Build Back Better Act (with its passage still uncertain at press time), allocates about $1 billion to broadband affordability and accessibility.

Fewins

Under the plan, states will receive large grants to pay for internet improvements, rural broadband expansion and devices such as laptops and tablets as part of the Connected Device Grant Program and other broadband affordability programs.

However, the USDA and NTIA aren’t the ones that actually install the fiber-optic infrastructure. A municipality, company or local public-private partnership must develop a business plan, apply for a grant and actually see the project through to completion as well as be able to maintain the network.

While Varenhorst has dedicated his business to bringing high-speed service to areas of Benzie County without broadband, he is a “pragmatic optimist” when it comes to the realities of federal funding to support broadband expansion.

Varenhorst, who serves on Benzie County Economic Development Corporation’s (EDC) broadband subcommittee, has been in the industry for 12 years and has worked on grant applications for a decade. He says that applying for grants for broadband infrastructure can be laborious and delayed by bureaucratic red tape.

Funding often goes to large for-profit companies and incumbent providers to maintain or upgrade current infrastructure, rather than truly expanding it to new areas, what he describes as “regulatory capitalism.”

How much money might be available to communities in northwest Michigan — and when it might be awarded via grants — is still up in the air. The Grand Traverse region has areas without high-speed internet, especially in parts of Benzie, Leelanau, Grand Traverse, Kalkaska and Antrim counties.

Under current federal standards, the minimum for broadband service is 25 megabits per second for download and 3 megabytes per second (Mbps) for upload. Ideally, service should support download speeds between 40–100 Mbps. Service providers can deliver this connection via wireless, satellite, fiber and more, with fiber internet offering the fastest upload and download speeds.

“There are issues throughout the area,” Fewins said. “Sometimes people don’t think about areas like Beaver Island. They have a permanent full-time community, and that’s a real issue for them whether it’s education or business opportunities because they are so isolated.”

High-speed internet service is spotty throughout Benzie County, especially in the northwest and southeast quadrants of the county. Areas in Frankfort, Elberta and around Thompsonville lack access to high-speed internet, said County Administrator Katelyn Zeits.

The pandemic really highlighted the need for internet access in Benzie. Students and residents flooded the library and other locations with WiFi, even sitting in the parking lot after hours to complete homework and other tasks.

“Obviously, broadband is the way into the future,” Zeits said. “Our kids need it, folks need it working from home, seniors who are home-bound need it to stay connected.”

Benzie County has made broadband expansion a priority, partnering with Eclipse Communications to tackle the issue. Parts of Benzie are serviced by cable, satellite and mobile service, but for many residents it’s not sufficient to stream a movie, upload large files or log onto a Zoom call, Varenhorst said.

“It really tugs at the heartstrings when someone calls in and you know their need is dire in the first few seconds of the phone call,” he said.

Eclipse Communications is working to build a wireless network that uses communications towers it constructs or leases space on to deliver broadband signals via microwave radio links, along with expanding fiber-optic lines that connect with the towers and run throughout the county.

While fiber-optic infrastructure is the technology of the future, it’s also expensive. Other issues include the region’s hilly topography and rural areas without many houses or mostly seasonal residents that make it cost-prohibitive for larger providers.

Benzie County has partnered with the Michigan Moonshot and Merit Network Inc. to conduct a broadband survey among residents. The goal is to gain a better picture of households without high-speed internet and the affordability of service for those who do have it. The results of the survey should be available in the coming months.

“We are closing in on the survey to give us a better picture of where the need is in Benzie County,” Zeits said. “By doing the survey, we do believe it does give us an additional push for if and when we do apply for funding.”

On the surface, the federal legislation holds promise to expand broadband in rural areas. But the grant process includes various eligibility requirements and scoring criteria that make many communities and small telecommunication companies ineligible.

“It’s expensive to build broadband infrastructure,” Varenhorst said. “The network still has to be operated. You have to prove that if you spend the money that it’s actually going to be there the year after and the year after and not going to fall into disrepair.”

For example, the USDA’s ReConnect program specifies a population area of 20,000 or less and 90% of the households must lack sufficient access to broadband. The new broadband service also must have 100 Mbps download speeds.

In areas like Benzie or Leelanau counties where some areas have high-speed access, the grant application would have to target specific gaps and “that can be difficult,” Fewins said.

USDA Rural Development has several different programs based on whether the applicant is a tribal entity, socially vulnerable community, municipality or private company. Some grants are 100% funded with no match, while others require a 25% match. The USDA also offers a 50-50 grant/loan combination and a 100% loan program.

“There are four different areas you can target depending on what your business plan is, what your needs are,” Fewins said. “It’s got to go through a real stringent review process. It has to be technically and financially viable.”

In Michigan, utility companies and electric cooperatives are taking advantage of USDA Rural Development programs to make smart grid improvements and build out the fiber-optics network, Fewins said. Infrastructure projects have a lot of moving parts and can take years to complete, but the goal is to make the best use of funds to benefit rural communities.

“If we’re tearing up the side of the road in a municipality, it makes sense to do as much as possible to piggyback and maximize those dollars,” he said. “The more we can do this in collaboration the more we can stretch the dollars.”

Despite the legwork required to apply for funding, Fewins still sees it as a historic opportunity for rural America to improve broadband. Expanding high-speed internet to rural regions ultimately impacts educational opportunities, health care outcomes and economic activity.

“As a small business owner, you have to have access to broadband in the global markets to be successful,” Fewins said. “It is a huge business issue. You have to have that ability to connect.”

The infrastructure bill and Build Back Better plan designate funds for different programs, so it’s important for communities to shop around and see what might work best for them, Fewins noted.

“If communities and companies are looking at moving forward, the best thing to do is to reach out and contact us and we can set them up with experts and we can go over if our program meets their needs,” he said.

For more information on the USDA Rural Development ReConnect program, visit usda.gov/reconnect or call (517) 324-5190.

 

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