Broadband and COVID-19: Funding

by Tk Matsabu, IEDC Fellow

Broadband forms a central part of economic development as business relies on this communication infrastructure to run operations, expand, and be competitive in a 21st century economy. The COVID-19 pandemic is cementing broadband access as a fundamental precursor to local economic development, as the economic shutdown forces businesses, schools, and hospitals to move online. Remote work and learning is a hallmark of the economy during COVID-19, and the lack of access to quality broadband is exacerbating the digital divide where communities are at risk of being left behind if they cannot work, run their businesses, or continue their education.

Movement on the Federal Level 

The Federal Communications Commission estimates that 20 million Americans do not have access to quality broadband services. This becomes worse in rural areas where one in every four people does not have quality broadband access. In an age where remote work and e-commerce is central to local economic development strategies, lack of broadband access will further exacerbate the economic development divergence between rural and urban economies.

Funding for broadband predominantly comes from local government and federal funding. House Democrats passed a $1.5 trillion infrastructure bill on July 1, which includes funding for broadband development, citing that this infrastructure will be crucial for local economic recovery. If approved by the Senate, the bill would provide funding to schools, local governments, and rural economic development organizations for broadband projects. The Federal Communications Commission also has a Universal Service program, underpinned by the 1996 Telecommunications Act which stipulates that all Americans should have access to communication and advanced services.

Success Stories

The efforts made in East Kentucky are a great example of what economic developers can do to increase broadband access through public-private partnerships. The 54-county rural region is home to some of the United States’ most distressed communities, and has seen continued decline in jobs related to the coal industry. A new tactic was needed; in 2013,  Kentucky SOAR (Shaping our Appalachian Region) was formed with the goal of creating a new future for Appalachia, centered primarily on the development of the digital economy. In partnership with the State of Kentucky and private sector companies, SOAR and the state launched the KentuckyWired initiative to provide access to high speed broadband through a combination of government capital and private funding.

Many states are implementing broadband grant programs to provide access to this crucial service. For example, the Governor of Missouri announced a $3.05 million broadband grant program in April to specifically assist in COVID-19 relief efforts as remote work, learning, and telemedicine become hallmarks of the COVID-19 era. The funds will be coming from the state itself as well as the federal government.

Collaboration is Key 

In a recent report by Pew Research, it identified the similarities among 9 states that are trying to increase broadband access. It found that the key factor in increasing access is building strategic partnerships between government, private, and community organizations that contribute to the funding of broadband. States are also creating broadband task forces specifically to address underserved areas which focus on capacity building and garnering funding from local, federal and private resources. By fostering a multi-stakeholder approach where community anchor institutions such as universities, healthcare providers, and utility companies can provide services, widespread broadband access can be achieved to serve the needs of the economy during COVID-19 and beyond.