Treasury Broadband Money Could Favor Rural Areas Over Cities

Cities and urban counties across the U.S. are raising concerns that a recent rule from President Joe Biden’s administration could preclude them from tapping into $350 billion of coronavirus relief aid. More than $65 billion towards his goal of affordable broadband for every individual is included in his American Rescue Plan still winding its way through Congress. If passed, grants for broadband infrastructure deployment would flow to each city, county and state.

But an interim rule published by the U.S. Treasury Department has narrowed the broadband eligibility, reports the Associated Press. It focuses on areas that lack reliable broadband, which the FCC defines as speeds of at least 25 Mbps up/3 Mbps down. 

The threshold ensures funding for rural areas that have slow or no internet service, and matches the agency’s speed definition. But cities assert the eligibility mark  doesn’t meet today’s internet needs. Though most cities have broadband, the speed might not be fast enough to handle several people in a home trying to work, study and stream entertainment at the same time. Or the price can be too high for low-income households. 

“They’re basically prioritizing those rural areas over the underserved urban areas where there is more population,” retired Treasury Department attorney Detta Kissel told the AP. Kissel helped write the Treasury Department rules and now lobbies for better internet service in the Northern Virginia suburbs.

Several cities, like Los Angeles and Milwaukee, have filed comments with the Treasury Department, urging it to loosen the eligibility standard for broadband pandemic relief money. Some want it to define underserved areas as less than 100 Mbps up/down. That would increase the number of eligible locations for funding from about 11 million to 82 million households, according to America’s Communications Association, which represents small and medium ISPs.

Cities argue the Treasury should use a 100/100 Mbps eligibility threshold because that’s the same speed projects are supposed to achieve if they receive funding. The infrastructure bill in Congress is more flexible, allowing some of its billions in broadband funding to go to “underserved” areas lacking download speeds of 100 Mbps and upload speeds of 20 Mbps.

Broadband industry groups have urged the Treasury to keep its original plan to target funds at areas with the slowest internet speeds. “Rather than reinvesting in locations that already have broadband to make it better,” the pandemic relief money should go to “places that don’t have any broadband at all,” USTelecom General Counsel Patrick Halley told the AP.

The public comment period ended in July, however the Treasury has set no date for when it will publish the final rule. A Treasury official said the department is undertaking a thorough review of the comments that is likely “to continue into the fall,” which begins tomorrow.

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