Funding to address broadband gaps in the Eleventh District
The Infrastructure and Investment Jobs Act (IIJA) became law in November 2021, allocating billions of dollars for upgrades and expansion of the nation’s infrastructure. Funding was awarded to various sectors including $65 billion for broadband. The funding is designed to ensure wide broadband access and to promote digital inclusion so that “individuals and communities have the information technology capacity that is needed for full participation in the society and economy of the United States.”[1]
In this article, we examine IIJA program funding distribution in the states in the Federal Reserve’s Eleventh District (Texas, Louisiana and New Mexico) and shed light on the reasons behind grant variations across states.[2] We found that:
- Texas leads both the district and country in total Broadband Equity, Access and Deployment (BEAD) funding to date, with over $3.3 billion allocated to the state.[3]
- On a per capita basis, New Mexico is leading the Eleventh District states with $487 per resident, followed by Louisiana at $297 and Texas at $114.
- Differences in per capita funding can be due to various factors such as funding formulas, program requirements and the competitive grant application process.
- As of the time of this report, funding opportunities for communities include the BEAD program and digital equity subprograms.
Funding breakdown
IIJA’s broadband funding has established six main programs, each aiming to address a specific gap in digital inclusion, and each with a distinct funding formula or competitive grant application process to distribute the money.
Broadband Equity Access and Deployment
With $42.5 billion, BEAD is by far the largest broadband program in IIJA. BEAD funding is targeted for infrastructure deployment and was distributed to states based on each state’s share of unserved locations and high-cost deployment areas. This program is the largest source of federal broadband funding for all three states in the Federal Reserve’s Eleventh District. With $3.3 billion, Texas was not only the largest winner of BEAD funds in the Eleventh District (Table 1) but also in the country. Over $1.3 billion was awarded to Louisiana and over $675 million to New Mexico. Once the states receive their funding, they will open competitive application processes for subgrantees.
What it is for: Broadband infrastructure
If a state can demonstrate it has a plan to bring affordable service to all unserved and underserved locations, it may also allocate BEAD funding for non-deployment activities such as user training, remote learning, telehealth, digital literacy, multilingual outreach, digital equity activities, prisoner education and use of digital navigators.
Where to apply: State broadband offices will handle applications.
Who can apply: States have outlined the selection criteria for subgrantees in their initial proposals to the National Telecommunications and Information Administration (NTIA). Subgrantee deployment activities include construction, improvement, facility acquisition, engineering design, long-term leases, network updates, workforce development and cybersecurity.
Is a match required? Yes, a 25 percent match is required unless the location is considered a high-cost area or a request is submitted to the NTIA to waive the matching requirement.
Timeline:
- June 30, 2023: States were notified of their BEAD funding allocation.
- August 28, 2023: State five-year action plans were due to NTIA.
- December 2023: State initial proposals were due to NTIA.
- 2024: Funds will be made available to subgrantees.
- Project funds must be expended within five years.
State Broadband Offices: Texas | Louisiana | New Mexico
| Table 1: IIJA Broadband Program Funding | ||||
| Funding per state in the Eleventh District (dollars) | ||||
| Grant | Is this grant competitive? | Texas | Louisiana | New Mexico |
| Broadband Equity, Access, and Deployment Program | No at state level, yes for subgrantees | 3,312,616,455 | 1,355,554,553 | 675,372,311 |
| Middle Mile Grant Program | Yes | 58,409,093 | 0 | 0 |
| Reconnect Program | Yes | 102,117,832 | 0 | 167,261,891 |
| State Digital Equity Planning Grant | No | 3,110,148 | 941,542 | 740,535 |
| Tribal Broadband Connectivity Program | Yes | 3,123,357 | 0 | 186,287,260 |
| Total | 3,479,376,885 | 1,356,496,095 | 1,029,661,997 | |
| Funding per capita | 114 | 297 | 487 | |
| Population (thousands) | ||||
| 30,503 | 4,574 | 2,114 | ||
| NOTE: This table shows announced funding as of November 2023 from invest.gov; however, NTIA provides the most up-to-date data and includes programs and awards not included in this analysis. For the latest information, check internetforall.gov. The Digital Equity Capacity Grant and Digital Equity Competitive Grant announcements are expected later this year. Affordable Connectivity Program funds are excluded from this table. SOURCES: “Investing in America,” whitehouse.gov, November, 2023; population information: Census Bureau, Vintage 2023 population estimates. |
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Tribal Broadband Connectivity Program
The Tribal Broadband Connectivity program is a competitive grant aimed at promoting infrastructure expansion and internet adoption in tribal areas. Given the 23 tribes (19 Pueblos, three Apache tribes, and the Navajo Nation) in New Mexico, it is no surprise this program is one of the largest sources of funding for the state. So far, New Mexico tribes have been awarded over $186 million, while tribes in Texas have received over $3 million. Those figures come from invest.gov, the data used for the analysis in the table. However NTIA provides the most up-to-date data and includes programs and awards not included in this analysis. NTIA data show Louisiana tribes have received $2.8 million.[4] Round 1 of the funding is closed and funds have been distributed; the deadline for the second round of funding applications was late January 2024.
ReConnect Program and Middle Mile Program
The Reconnect Loan and Grant Program is nested under the Rural Broadband Programs at the Department of Agriculture and is aimed at infrastructure development in rural areas. The program was established in 2018, and it received a $2 billion allocation from Congress through IIJA. To be eligible for ReConnect funding, projects must bring 100/100 megabits per second (Mbps) service to rural areas where at least 50 percent of households in the proposed service area lack 100/20 Mbps service.
The Middle Mile Program focuses on connecting major networks to local networks with middle-mile infrastructure buildout. The goal of the program was to build a more resilient network and to lower the costs of connecting unserved and underserved areas.
Both programs award funding through competitive processes. According to NTIA data that include awards not shown in the data used for the analysis in the table above, New Mexico received nearly $50 million from the Middle Mile Program and over $167 million from the Reconnect Program.[5] Texas has received funds from both programs (combined over $160 million) while Louisiana received nearly $14 million from the Middle Mile program.[6]
Digital Equity Program
The Digital Equity program has two subprograms, the State Digital Equity Capacity Grant and the Digital Equity Competitive Grant. The objective of these grants is to grow adoption and skills. The funds for the Digital Equity Capacity Grant will be allocated in two phases. First, in 2023, planning grants were distributed to each state so they may create sustainable plans for digital skilling, device distribution and adoption in general. After the digital equity plans have been approved, states will enter phase 2 and be awarded funds based on population, share of residents in covered populations [7] and comparative lack of availability and adoption. In 2024, local governments, nonprofits and other entities will also be able to directly apply for the Digital Equity Competitive Grant.
State Digital Equity Capacity Grant
The intent of the $1.44 billion State Digital Equity Capacity Grant Program is to ensure that states, territories and tribal areas have the capacity to promote digital equity and support digital inclusion activities.
NTIA will allocate funds to states based on total population, size of the population that is covered in the program and lack of broadband in the state. Consideration of those characteristics for each state will be in proportion to the full extent of those characteristics in all eligible states.
States are required to create comprehensive digital equity plans to outline their work to provide all residents the opportunity to participate in the digital economy.
What it is for: Capacity to implement state digital equity plans.
Timeline:
- Program launches in 2024. State broadband offices will release information on subgrantee eligibility.
Digital Equity Competitive Grant
NTIA has allocated $1.25 billion for a five-year, annual $250 million grant program that will fund digital equity projects and promote greater internet adoption among covered populations.
What it is for: Develop and implement digital inclusion activities that benefit covered populations; facilitate the adoption of broadband; implement training programs or other workforce development programs; provide equipment, networking capability, hardware and software, or digital network technology for broadband services; or construct, upgrade, expand or operate new or existing public access computing centers for covered population.
Where to apply: NTIA
Who can apply: Nonprofits, local governments, local educational agency; workforce development areas, or a partnership among all these entities.
Timeline:- Program launches in 2024.
Affordable Connectivity Program
The Affordable Connectivity Program (ACP) is also a large contributor to states in the Eleventh District; however, it is fundamentally different from the other IIJA broadband programs because ACP is household based. This program provides a $30 discount on internet subscription fees for eligible households. With over $822.5 million, Texas received the largest amount of total funding, however Louisiana is one of the leading states in the country when it comes to enrollment. Over 50 percent of eligible households in Louisiana enrolled in the program. To access the broadband discount, households needed to enroll themselves in the ACP. Communities with local or state level ACP awareness campaigns had greater success at helping households enroll and benefit from the program. The program has been cited as widely successful in helping families afford high-speed internet. However, as of the publishing of this article, the $14.2 billion allocated for the program was expected to run out, and April 2024 would be the last month ACP households would receive its full benefit; additional funding had not been reallocated by Congress.
Funding per capita differences by state
There are several factors behind the large differences in per capita funding among the Eleventh District states. First, not all IIJA broadband funding has been awarded. Second, as mentioned, some of the funding is dependent on formulas. For example, BEAD funding is calculated based on share of unserved locations and share of unserved locations in high-cost areas. High-cost areas are defined by an area’s remoteness, population density, topography and poverty levels. These variables differ significantly from state to state and can account for large differences in funding awards.
Conclusion
In the next article, we will share learnings from our Advancing Digital Inclusion initiative on the most common barriers for applicants in the competitive grant process. We’ll detail challenges ranging from addressing lack of capacity to forging relationships with internet service providers. We will also share the assistance communities have found most helpful and how state and federal leaders can best support these efforts.
Notes
- “The Digital Equity Act of 2021,” Congressional Research Service, Aug, 12, 2021.
- While the Eleventh Federal Reserve District encompasses Texas, northern Louisiana and southern New Mexico, for the purposes of this article we are including data regarding all Louisiana and New Mexico.
- Referenced funding up to the end of 2023.
- This award was not included in the primary data source for our analysis, invest.gov, but was included in internetforall.gov funding by state database.
- See note 4.
- See note 4.
- The National Telecommunications and Information Administration defines unserved locations as those without any broadband service at all or with broadband service offering speeds below 25 Mbps downstream/3 Mbps upstream. Underserved locations are those without broadband service offering speeds of 100 Mbps downstream/20 Mbps upstream.
About the authors
Marycruz De Leon is a senior outreach advisor in the San Antonio Branch of the Federal Reserve Bank of Dallas.
Kassandra Huhn is an outreach advisor in the El Paso Branch of the Federal Reserve Bank of Dallas.
Prithvi Kalkunte is an economic programmer in the Research Department at the Federal Reserve Bank of Dallas.
Xiaohan Zhang is a senior research economist at the Federal Reserve Bank of Dallas.
