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Rural areas could be more financially secure than cities if there is an Internet funding rule

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Concerns are being raised by cities and counties in the U.S. about a new rule by President Joe Biden that could prevent them from accessing $350 billion of Coronavirus relief aid to increase high-speed internet connectivity.

Biden set the goal to provide affordable, fast internet for every American household. The massive American Rescue Plan took a step toward that by including broadband infrastructure among the primary uses for pandemic aid flowing to each city, county and state.

But an interim rule published by the U.S. Treasury Department has narrowed the broadband eligibility. It is focused on areas without reliable broadband. This means that devices can be connected to the internet via a cable or dataline at upload speeds of 3 Mbps and download speeds of 25 megabits per sec.

This threshold guarantees funding for rural and remote areas without internet service or slow speeds. It also matches the definition of broadband established by the Federal Communications Commission (FCC) in 2015. Cities argue that the threshold is too low to meet the current internet requirements.

Although most cities have broadband, it might not be fast enough for multiple people trying to stream, work, and study simultaneously. This is a common situation during the coronavirus pandemic. It is also possible that the price tag will be higher than what lower-income residents are able to afford.

“They are basically prioritizing rural areas over underserved urban places where there is more people,” stated Detta Kissel, a former Treasury Department attorney who helped to write agency rules. She now advocates for better internet services in Arlington, Virginia, Washington, D.C.

Many cities including San Antonio, Los Angeles and Los Angeles have submitted public comments to Treasury Department asking it to relax the criteria for spending money on broadband pandemic relief. Some people want the Treasury Department to redefine underserved areas by limiting download and upload speeds below 100 Mbps.

According to the study by America’s Communications Association (which represents small and medium-sized internet service providers), this would increase funding eligibility from approximately 11 million to around 82 million households nationwide.

Cities suggest that the Treasury use a 100/100Mbps eligibility threshold. This is because it’s the same speed that projects should achieve if they are granted funding. A separate infrastructure bill working its way through Congress is more flexible, allowing some of its $65 billion in broadband funding to go to “underserved” areas lacking download speeds of 100 Mbps and upload speeds of 20 Mbps.

The Treasury should follow its original rule. This could allow areas with low population to leapfrog other urban areas when it comes to their internet speeds. Some mayors don’t like this.

“The inner city Memphis is in dire need of broadband connectivity as rural Tennessee,” stated Memphis Mayor Jim Strickland. He wants assurance from the Treasury Department before spending $20 million of the American Rescue Plan to fund a broadband project.

Nearly all Milwaukee residents have access to an internet provider that offers upload speeds up to 3Mbps and download speeds up to 25 Mbps. David Henke (the city’s chief info officer) said that in some areas of Milwaukee, less than half of households have internet access due to its high cost.

Henke stated that if you don’t have work and can’t afford broadband, it’s a vicious cycle. You’re effectively locked out of remote learning, remote job, and participation in modern society.

Henke stated that Milwaukee applied for $12.5 million from Wisconsin’s American Rescue Plan. The city would also chip in $2.5million of its own pandemic relief money, to help expand affordable broadband access into more areas of the city. The city is asking the Treasury Department for a broadening of its rules.

The rule’s final version will not be published by the Treasury, despite the fact that the public comment period closed in July. According to a Treasury official, the department is continuing its thorough review of comments and will likely continue it into the fall.

U.S. Senator Ron Wyden (an Oregon Democrat) is one of those who are urging Treasury Department to adopt a broader eligibility limit. He said that it would be “severely wrong” to assume that all communities are satisfied with the “woefully obsolete” broadband benchmark that the department has established.

Broadband industry associations have generally urged Treasury to keep its original plan of focusing money on areas with slow internet speeds.

Patrick Halley, general counsel of USTelecom (which includes Verizon, AT&T and other members), stated that instead of investing in broadband locations to improve it, the pandemic relief money should be directed to “places without any broadband at all”.

NCTA, a cable industry group, urged Treasury officials to tighten eligibility. It also wants to restrict the number of households with faster service that can be included within areas that are targeted for improvement. It wants to eliminate the possibility of subjective local decisions regarding areas without reliable service.

Industry groups stated that allowing improvements in areas where the minimum speed thresholds are already met could lead to the siphoning of money from the most difficult-to-reach areas, potentially leaving them without services once the federal money has been spent.

According to the study by America’s Communications Association, it could cost anywhere from $20 billion to $37 billion to bring super-fast internet service in every area that currently has less than 25/3 Mbps speeds. This cost rises to $106 billion to $179 million if you include all areas that are currently not connected at speeds of 100/100Mbps.

Ross Lieberman (the association’s senior vice-president of government affairs) stated that “as a matter prioritization we think it’s best not to start with areas that have the most,”

Although most complaints about the rule by the Treasury Department have been from large cities, there have been some concerns raised by residents living in rural areas.

Charlie Hopkins, a retired software and hardware designer, lives on an island in Maine. It is only accessible by boat. When tested recently by The Associated Press, internet speeds at Hopkins’ house were barely 5 Mbps to download and 0.4 Mbps to upload.

Hopkins is concerned that the Treasury Department rule may make it more difficult for the island get funding to improve its internet. Some homes have faster speeds than others. He stated that broadband is crucial to retain and attract residents.

Hopkins stated that “Other towns and cities in Maine, particularly the cities, are getting higher speed fiberoptic-based Internet.” Hopkins said, “It’s not something I like to be told, “Well, you’re at end of the Earth so you don’t qualify.”