The Trump administration today issued an outline of its proposed legislative initiative to fund improvements to the nation’s aging infrastructure. While the proposal does not specifically set aside funding for advanced telecommunications infrastructure, the three components below authorize its funding. President Trump talked up the funding for advanced telecommunications infrastructure in remarks today to state and local officials at the White House. Trump said “it’s been very unfair what’s happened with broadband in terms of the Midwest and in terms, really, of rural areas.” At least four officials emphasized the need to fund it including Wisconsin Gov. Scott Walker and Virginia Gov. Ralph Northam. Northam termed it “very, very important” to his state. (Link to remarks here)
A proposed Rural Infrastructure Program would provide $50 billion for capital investment in rural infrastructure projects. Policy objectives would be to:
· Expand access to markets, customers, and employment opportunities with projects that sustain and grow business revenue and personal income for rural Americans;
· Enhance regional connectivity through public and private interregional and interstate rural projects and initiatives that reduce costs for sustaining safe, quality rural communities; and
· Increase rural economic growth and competitiveness by closing local infrastructure gaps in development-ready areas to attract manufacturing and economic growth to rural America.
Eighty percent of the funds would be distributed as state block grants to be used for rural infrastructure needs with 20 percent of the funds reserved for performance grants. A portion of the funds would be set aside for tribal and territorial infrastructure, with the remainder available to states. States would be required to delineate criteria for administering the funding for specific types of projects including telecommunications infrastructure. States would be required to publish a comprehensive plan demonstrating how the projects align with the evaluation criteria in the infrastructure incentives program, including state, local and private sector investment in eligible projects.
A Transformative Projects Program would provide $20 billion in funding for “ground-breaking project ideas that have significantly more risk than standard infrastructure projects, but offer a much larger reward profile.” The primary policy goal is to advance projects that significantly improving performance from the perspective of availability, safety, reliability, frequency, and service speed; substantially reduce end user costs for services; introduce new types of services; and improve services.
To ensure greater accountability and control over this category of projects, funding would be linked to terms and conditions of the award including achieving project milestones. Most of the funding (up to 80 percent) would be set aside for capital construction costs. Half could be used to cover project planning costs and up to 30 percent for proof of concept projects. Projects that utilize capital construction funding would be required to partner with the federal government to share the value of completed projects, based on the characteristics of project and its projected revenues. Technical assistance would be available from the federal government or funded by this program.
Expanded eligibility for Private Activity Bonds to fund public purpose infrastructure projects to include telecommunications infrastructure projects provided they are owned by state or local governments. Privately owned infrastructure may be funded, but must be available for public use and would be subject to state or local governmental regulatory or contractual control or approval.
The administration’s infrastructure proposal comes on the heels of a continuing budget resolution enacted the previous week that had reportedly appropriated $20 billion for infrastructure including telecommunications infrastructure in rural areas. The appropriation was not included in the enacted measure, H.R. 1892.
Since the administration’s infrastructure spending proposal specifically references “rural broadband” to identify eligible projects, a key question is how federal and state entities that would administer the funds define those words. The Rural Infrastructure Program defines “rural” as “areas with populations of less than 50,000.” How those areas are specifically defined takes on significance since in the United States, some exurban and even suburban areas lack advanced landline telecommunications infrastructure serving end user premises, redlined by legacy telephone and cable companies.
Ditto the term “broadband.” Legacy providers have defined the term based on the throughput of the connection serving end user premises rather than by delivery infrastructure. That in turn has led to more than a decade of disagreement among providers, consumers and regulators over what premises are deemed having adequate service to support high quality voice, data and video services. To ensure the best use of taxpayer funds, the federal government should fund only fiber optic infrastructure be connected to customer premises since only it can easily accommodate ever increasing bandwidth demand and isn’t prone to near term obsolescence.
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