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Alabama Plans for $537M to Support High-Speed Internet

Alabama has committed $537 million in federal funds for high-speed Internet under plans state lawmakers and Gov. Kay Ivey approved last year and during a special session this month.

The Alabama State Capitol Building in Montgomery.
(TNS) — Alabama has committed $537 million in federal funds for high-speed internet under plans state lawmakers and Gov. Kay Ivey approved last year and during a special session this month.

About one-fifth of addresses in Alabama lack access to high-speed internet, and about three-fourths do not have access to the speed officials consider the standard for the next decade. Alabama has chipped away at filling those gaps with a state-funded grant program for five years, but the federal money far exceeds that state funding.

The money allocated is one-fourth of the $2 billion Alabama received from the American Rescue Plan Act (ARPA), a pandemic relief bill Congress passed two years ago. The federal government allows states to use the ARPA money for internet access, water and sewer projects, and other needs the pandemic did not cause. The Alabama Legislature allotted $277 million to broadband last year and another $260 million this month.

The money will provide grants to companies that install the fiber-optic cable and other equipment needed to deliver broadband internet to areas that do not have it.

Alabama allocated last year’s $277 million into two grant categories: $82 million for middle-mile projects, those that extend or fill gaps in fiber networks; and $192 million for last-mile projects, which will connect to the homes, businesses, schools, and other places to allow people to subscribe to high-speed internet through a private provider.

The Legislature did not specify how the state will use $260 million approved this month. But officials say Alabama has a framework in place to send it where it is needed.

“I think we’ve done a lot more preparation on the front end,” said state Rep. Randall Shedd, R-Cullman, one of the Legislature’s top advocates for broadband access. “I think our state will go quicker and more smoothly than some because of the preparation that we’ve had. The planning and the mapping, knowing who has and who doesn’t.”

In 2018, Alabama set up the Alabama Broadband Accessibility Fund, a state-funded grant program. The Alabama Department of Economic and Community Affairs (ADECA) administers the program. Alabama has awarded 109 grants totaling $88.6 million.

“Through this program, over 22,000 previously unserved addresses now have access to high-speed internet, and nearly 60,000 more unserved addresses are expected to have access to high-speed internet in the next two years,” Mike Presley, chief of communications for ADECA, said in an email. “Once all Alabama Broadband Accessibility Fund projects awarded to date have been completed, access to broadband service will be available to more than 82,000 Alabama households, businesses and community institutions that currently have no option to subscribe.”

ADECA’s website carries news and information about the grant programs, including a list of the grants awarded so far. Ivey announces grants from the state program when they awarded, including nine grants totaling $25 million she announced this month.

Much work remains to make high-speed internet available throughout the state, a need that public officials say parallels the rural electrification projects of the 1930s and 1940s. Officials say broadband is a necessity because of its value for work, school, business, and health care. The pandemic put new emphasis on the need to fill the gaps.

“Connectivity is the great equalizer,” Senate Majority Leader Clay Scofield, R-Guntersville, said last year when the middle-mile project was announced. “And I truly believe it will bring our most vulnerable communities into the 21st century.”

“Broadband is the new utility,” Senate Minority Leader Bobby Singleton, D-Greensboro, said. “It is the new power. It is the new water.”

The money from ARPA can help the state reach the unserved areas, expanding on what the state grants have done. The preparation that Shedd mentioned for using the federal funds includes the Connect Alabama Act, which the Legislature passed in 2021. It created the Alabama Digital Expansion Authority, a board to oversee broadband development. Shedd and Scofield are the co-chairs.

In January 2022, the state released the Alabama Connectivity Plan and the Alabama Broadband Map to spell out the scope of the expansion effort and identify where access is lacking.

The Alabama Connectivity Plan said 19 percent of addresses in the state did not have access to what the state defines as broadband, a minimum download speed of 100 megabits per second and upload speed of 20 megabits per second, or 100/20. The plan says faster internet, 100/100, is a better standard for new projects, and Alabama requires that in its state-funded grants. Only about 25 percent of the addresses had access to 100/100, according to the Alabama Connectivity Plan.

The Connectivity Plan estimated it will cost $4 billion to $6 billion to make 100/100 internet available to all the areas that do not have 100/20 access now. The plan sets a 10-year goal of delivering access of 100/20 to 98 percent of addresses with the capability of being increased to 100/100 in a cost-effective way.

The $82 million middle-mile project state officials announced last year was a grant awarded to Fiber Utility Network, a partnership of eight rural electric cooperatives. Officials said it would connect more than 3,000 miles of new and existing fiber networks over three years.

The remainder of the $277 million from last year’s broadband allocation will go to $192 million in grants for last-mile projects. The U.S. Treasury Department approved the state’s plan for using those funds in January. According to Presley at ADECA, none of the funds have been awarded yet. He said ADECA is working diligently to set up the grant program, which he said will be a competitive program similar to the state-funded grants Alabama has issued since 2018.

The state program provides grants of up to $5 million or 80 percent of the cost of a project. Eligible projects are those that connect unserved areas, middle-mile projects, and projects to connect to a hospital, school, public safety building, or economic development site. They generally must be finished in two years.

Shedd notes an example where reliance on federal funds can add some steps to getting the money where it is needed. For example, he said the state has about $85 million in last-mile projects ready to go but does not have the funding in the state grant program. But he said those grant applications would have to be repeated to qualify for the federal funds.

“If we can’t find state funds to do it with, we may have to do that,” Shedd said. “But these projects will all have to reapply and be rescored using the federal guidelines instead of the state guidelines.”

The plan for using the ARPA funds, including the large allotments to broadband, won almost unanimous approval in the Legislature. Rep. Arnold Mooney, a Republican from Birmingham, voted against the plan. Mooney said at a budget committee meeting that he had received conflicting answers when he asked whether the $260 million would be used for middle-mile or last-mile projects.

Shedd said that has not been decided. The bill allocating the money says it will be used “consistent with the Alabama Connectivity Plan as approved by the Alabama Digital Expansion Authority.”

“That’s a decision we’re going to have to make with the ADEA board,” Shedd said. “I don’t think we know yet. The bill was just approved and we haven’t met. We will be working on it hard and quickly.”

Shedd said discussions about the need to expand broadband were in the early stages when was elected to the Legislature in 2013. Shedd said he took special interest in broadband partly because of his experiences as chairman of the Cullman County Commission from 1977 to 1985.

“When I first came to Montgomery as a legislator a little bit of talk was starting,” Shedd said. “Sen. Scofield was pretty much the leader in the broadband discussion and had an interest in it. I was chairman of our county commission in Cullman County for eight years and during that time we were developing rural water lines throughout Cullman County. I got to realizing that broadband was like rural water. And of course before that it was like rural electricity.”

Shedd said he believes collaboration between the governor, the Legislature, ADECA, and the private sector have put Alabama in good position to use the ARPA money and other funding that becomes available to promote broadband expansion. He said grant programs are essential to reach areas where it would not otherwise be feasible for private providers to spend the money to extend the fiber and other equipment needed.

“It’s money that’s being spent to get access that would not happen otherwise, in my opinion,” Shedd said. “Second of all, it’s a great investment in that once the providers build the lines and do all the infrastructure to provide internet, it’s theirs and that means the state doesn’t have to maintain it. So if it was a state agency or state operation, not only would be spending money for building it, but we’d be spending taxpayer money maintaining it. So I think that’s a strong and great asset to the state for what we’re doing.”

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