$10 Billion Treasury Program Makes Available $100 Million+ for Each State – But States Need to Apply For It
Over the past several months, broadband policymakers, advocates, and service providers have focused primarily on two main developments in the world of broadband infrastructure funding:
- American Rescue Plan Act (ARPA) funds that are already available to States and local governments through the ARPA State and Local Fiscal Recovery Fund (SLFRF) (ARPA Sections 602 and 603), which may be used for “necessary…broadband infrastructure”; and
- The massive broadband funding programs enacted as part of the Infrastructure Investment and Jobs Act (“IIJA”), including the $42.45 billion Broadband Equity and Deployment (BEAD) Program (from which funding is unlikely to be generally available until 2023).
States, local governments, service providers and potential partners should also be aware of the Coronavirus Capital Projects Fund (CPF), another significant broadband infrastructure funding opportunity that seems to have been overshadowed by the other programs above. While States await rules and eligibility determinations for the Infrastructure Act funds, CPF funding may be available in the meantime. Moreover, CPF funding might be suitable for projects that may not otherwise be eligible for funding under the Infrastructure Act: there is no formal requirement that CPF-funded broadband projects serve “unserved” or “underserved” locations, for example (as further discussed below).
Adopted as Section 604 of ARPA and administered by the Treasury Department, the CPF makes available $10 billion to States, territories, and Tribal governments – not directly to local governments – “to carry out critical capital projects directly enabling work, education, and health monitoring, including remote options, in response to the public health emergency.” Each State is allocated at least $100 million. Note that this is in addition to ARPA SLFRF funds that the State may already have received.
Unlike the ARPA provision establishing the SLFRF, which enables funds to be used for “necessary… broadband infrastructure,” the CPF statute does not even include the word “broadband.” However, Treasury has made clear that broadband infrastructure is an acceptable use of CPF funds. In fact, Treasury seems to be actively encouraging it, giving more emphasis to broadband than to any other purpose to which the funds may be put: “Treasury is launching the Capital Projects Fund to allow recipients to invest in capital assets that meet communities’ critical needs in the short- and long-term, with a key emphasis on making funding available for broadband infrastructure.”
100 Mbps symmetrical. A broadband infrastructure project supported with CPF funds must be “designed to deliver service that reliably meets or exceeds symmetrical speeds of 100 Mbps so that communities have future-proof infrastructure to meet their long-term needs.” More to the point, “[r]ecipients are encouraged to prioritize investments in fiber-optic infrastructure where feasible.” As with SLFRF funding, though, if it would be impracticable “because of geography, topography or excessive cost,” a broadband project may provide between 20 Mbps and 100 Mbps upload speeds so long as it is scalable to symmetrical 100 Mbps.
No “unserved”/“underserved” requirement. There is no firm requirement that a CPF-funded broadband project must primarily serve “unserved” or “underserved” locations, but Treasury’s CPF Guidance states that applicants are “encouraged to focus on serving locations without access to reliable wireline speeds of [100/20 Mbps].” State recipients must articulate “why the communities they have identified to be served by Broadband Infrastructure Projects have a critical need for those projects as is related to access, affordability, reliability and/or consistency.” (at p. 4)
“Any available data.” “When determining the communities to be served by Broadband Infrastructure Projects, Recipients may choose to consider any available data including but not limited to documentation of existing broadband internet service performance, federal and/or state collected broadband data, user speed test results, interviews with community members and business owners, reports from community organizations, and any other information they deem relevant.”
Local governments, non-profits, and cooperatives encouraged. As with SLFRF-funded broadband projects, Treasury “encourages Recipients [i.e., States] to prioritize Projects that involve broadband networks owned, operated by or affiliated with local governments, non-profits, and co-operatives—providers with less pressure to generate profits and with a commitment to serving entire communities.” (CPF Guidance, at p. 3)
Affordability. Treasury’s CPF Guidance encourages States to address affordability “as a barrier to full use of the internet when developing their Program Plans for Broadband Infrastructure Projects,” and States are required to consider affordability when selecting broadband infrastructure projects to fund. States “are also encouraged to consult with the community as part of the process they undertake to consider affordability and are required to publish the description of their process for considering affordability in their project selection process.”
(at p. 4)
States must submit a “Grant Plan” for CPF funds. Unlike ARPA SLFRF funds, which are automatically provided to States and local governments in accordance with a particular formula, States must submit an application to receive CPF funds. States should have already applied to receive CPF funds generally (the deadline was December 27, 2021). States must then submit a single, detailed Grant Plan proposing how the State will use the funds, along with one or more “Program Plans,” which must be received by September 24, 2022. “For example, a State might file a Grant Plan that indicates that it intends to spend funding on broadband deployment throughout the State, and a Program Plan that provides detailed information on its deployment plan for only some of the counties in the State. Later, it could file Program Plans detailing its deployment plans for other counties in the State.” (CPF Guidance, at p. 15)
State Grant Plans will be reviewed by Treasury, and funds disbursed, on a rolling basis.
Subawards by State Recipients. As noted, CPF funding will be made available only to States, territories, and Tribal governments. Those recipients are expected to award funds to subrecipients, such as other levels or units of government (e.g., municipalities or counties), non-profits, or private entities.
For additional details on the Coronavirus Capital Projects Fund, please refer to the following Treasury Department publications:
• CPF FAQ