New Guidance Clarifies Use of Coronavirus Fiscal Recovery Funds for Broadband

June 18, 2021

The guidance clarifies that use of the funds for broadband projects doesn’t have to be limited to unserved and underserved areas.

The U.S. Department of Treasury released an updated FAQ document on June 17 that clarifies how State and Local Fiscal Recovery Funds can be used for broadband infrastructure.

The update answers questions raised by local government stakeholders, including the League of Minnesota Cities and the National League of Cities, about eligible areas for broadband infrastructure investment.

Broadband deployment outside ‘underserved areas’

The update clarifies that states and localities are able to use their Fiscal Recovery Funds for broadband infrastructure deployment in areas where not all households or businesses lack wireline access with download speeds of 25 Mbps and upload speeds of 3 Mbps. This was the criteria in the Treasury’s Interim Final Rule to determine if an area was unserved or underserved in terms of broadband.

The update also clarifies that the use of “reliably served” in the broadband provision of the Interim Final Rule gives states and local units of government broad authority and discretion to determine the actual level of service to residents in their communities.

Other clarifications

Specifically, the FAQ update clarifies the following:

  • Local projects should prioritize households and businesses that are unserved or underserved, but those do not need to be the only ones in the service area funded by the project.
  • Broadband infrastructure projects could provide service to a wider area that includes both served and unserved or underserved areas and could also include making ongoing service more economical.
  • The use of the word “reliably” in the Interim Final Rule to both identify eligible project areas and to identify acceptable service levels for broadband provides state and local units of government with substantial discretion to assess the service level on the ground for homes and businesses. Local officials can decide whether that service consistently meets the specified threshold of 25Mbps/3Mbps taking into account the actual experience and service level that customers receive, regardless of whether the provider claims the provision of 25Mbps/3Mbps service and above. It also clarifies state and local government discretion for how a project is designed to provide households and businesses with service that meets or exceeds the speed thresholds for a broadband project in the rule.
  • “Middle mile” broadband projects are eligible, but states and local units of government are encouraged to focus on projects that will also achieve last-mile connections.

Comments on Interim Final Rule due July 16

The League expects additional clarifications via updates to the Treasury FAQ on a rolling basis as well as updates to the Interim Final Rule upon conclusion of the comment period, which ends mid-July. Cities that wish to provide comments on the Interim Final Rule must submit them by July 16 and may do so through the Federal Rulemaking Portal.

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